Ashurst Xxxxxx Xxxxx
CONFORMED COPY
Project Apollo
$135,000,000 Senior Credit Agreement
Barclays Leveraged Finance
The Royal Bank of Scotland plc
as Joint Mandated Lead Arrangers
Barclays Bank PLC
as Facility Agent
Barclays Bank PLC
as Security Agent
relating to the acquisition of RIVERDEEP GROUP PLC
18 January 2003
CONTENTS
CLAUSE PAGE
1. INTERPRETATION.........................................................................................1
2. THE FACILITIES........................................................................................23
3. PARTICIPATION OF LENDERS..............................................................................25
4. CONDITIONS PRECEDENT..................................................................................26
5. DRAWDOWN PROCEDURES...................................................................................28
6. ANCILLARY FACILITIES..................................................................................31
7. DEMANDS UNDER BANK GUARANTEES.........................................................................33
8. INTEREST..............................................................................................35
9. SELECTION OF INTEREST PERIODS.........................................................................38
10. MARKET DISRUPTION.....................................................................................39
11. REPAYMENT OF DRAWINGS.................................................................................40
12. PREPAYMENT AND CANCELLATION...........................................................................41
13. PAYMENTS..............................................................................................47
14. TAXES.................................................................................................50
15. CHANGE IN CIRCUMSTANCES...............................................................................52
16. FEES, EXPENSES AND STAMP DUTIES.......................................................................54
17. GUARANTEE AND INDEMNITY...............................................................................56
18. CHANGES TO OBLIGORS AND SECURITY......................................................................59
19. REPRESENTATIONS AND WARRANTIES........................................................................61
20. UNDERTAKINGS..........................................................................................69
21. EVENTS OF DEFAULT.....................................................................................94
22. THE AGENTS AND THE OTHER FINANCE PARTIES.............................................................101
23. PRO RATA PAYMENTS....................................................................................107
24. SET-OFF..............................................................................................108
25. NOTICES..............................................................................................109
26. CONFIDENTIALITY......................................................................................110
27. CHANGES TO PARTIES...................................................................................110
28. LENDERS' DECISIONS...................................................................................114
29. INDEMNITIES..........................................................................................115
30. MISCELLANEOUS........................................................................................117
31. GOVERNING LAW AND SUBMISSION TO JURISDICTION.........................................................118
SCHEDULE 1..................................................................................................119
Lenders.....................................................................................................119
SCHEDULE 2..................................................................................................120
Borrower....................................................................................................120
SCHEDULE 3..................................................................................................121
Guarantors..................................................................................................121
SCHEDULE 4..................................................................................................122
Part 1 - Conditions Precedent to signing this agreement.....................................................122
Part 2 - Conditions Precedent - First Drawdown..............................................................125
Part 3 - Conditions subsequent relating to the granting of security.........................................127
Part 4 - Corporate Documents in respect of each Obligor.....................................................128
SCHEDULE 5..................................................................................................129
Part 1 - Drawdown Request - Advances........................................................................129
Part 2 - Drawdown Request - Bank Guarantees.................................................................130
SCHEDULE 6..................................................................................................131
Transfer Certificate........................................................................................131
SCHEDULE 7..................................................................................................136
Part 1 - Accession Document.................................................................................136
Part 2 - Guarantee Increase Deed............................................................................140
SCHEDULE 8..................................................................................................142
Mandatory Cost formulae.....................................................................................142
SCHEDULE 9..................................................................................................145
Part 1 - Initial Obligors...................................................................................145
Part 2 - Target Companies...................................................................................146
Part 3 - Target Companies Post Whitewash Security...........................................................148
SCHEDULE 10.................................................................................................149
Dormant Companies...........................................................................................149
THIS CREDIT AGREEMENT is made on 18 January 2003
BETWEEN:
(1) HERTAL ACQUISITIONS PLC (a company incorporated in the Republic of Ireland
with registered number 317234) (the "Parent") as a Borrower;
(2) THE COMPANIES LISTED IN SCHEDULE 3 each as Guarantors;
(3) BARCLAYS LEVERAGED FINANCE and THE ROYAL BANK OF SCOTLAND PLC (in this
capacity, together the "Joint Mandated Lead Arrangers");
(4) THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 as Lenders;
(5) BARCLAYS BANK PLC, in its capacity as facility agent for the Lenders under
the Senior Finance Documents (the "Facility Agent"); and
(6) BARCLAYS BANK PLC, in its capacity as agent and trustee for the Finance
Parties under the Security Documents (the "Security Agent").
THE PARTIES TO THIS AGREEMENT AGREE as follows:
1. INTERPRETATION
1.1 Definitions
In this agreement:
"Accession Document" means an agreement substantially in the form set out
in schedule 7 part 1 under which a Group Company becomes a Guarantor and/or
a Borrower and becomes a party to the Intercreditor Deed;
"Accountants' Report" means the accountants' reports in the approved form
prepared by KPMG in relation to the Target Group and covering accounting,
tax and commercial due diligence and a review of the feasibility of the
Irish financial assistance whitewash procedure together with the KPMG Tax
Structure Paper;
"Accounting Quarter" means each period of approximately 13 weeks ending on
the last day of March, June, September and December in a Financial Year;
"Additional Cost Rate" has the meaning given to it in schedule 8 (Mandatory
Cost Formulae).
"Advances" means the Term A Advances, the Term B Advances and the Revolving
Advances;
"Affiliate" means a Subsidiary or a Holding Company of another person or
any other Subsidiary of a Holding Company of that other person;
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"Agency Fees Letter" means the letter from the Facility Agent to the Parent
dated on or about the date of this agreement setting out details of certain
fees payable by the Parent in connection with the Facilities;
"Agent" means each of the Facility Agent and the Security Agent;
"Alchemy Bridge Documents" means the Alchemy Bridge Facility Agreement and
the Alchemy Undertaking;
"Alchemy Bridge Facility Agreement" means the bridge facility agreement in
the agreed form entered into on or prior to the date of this agreement
between Loan Noteco and Barclays Bank PLC;
"Alchemy Undertaking" means the undertaking in the agreed form dated on or
about the date of this agreement whereby Alchemy Partners (Guernsey)
Limited undertakes to Barclays Bank PLC to make funds available to the
Parent in the circumstances set out therein;
"Ancillary Document" means each Ancillary Facility Letter and each other
document and agreement made by an Ancillary Lender and any Group Company in
connection with the Ancillary Facilities;
"Ancillary Facilities" means working capital facilities made available by
an Ancillary Lender under an Ancillary Facility Letter;
"Ancillary Facility Letter" means a facility letter entered into by an
Ancillary Lender and one or more Borrowers in accordance with clause 6
(Ancillary Facilities);
"Ancillary Lender" means a Lender which has agreed to make available
Ancillary Facilities under an Ancillary Facility Letter (until all amounts
outstanding under those Ancillary Facilities have been discharged and it no
longer makes those Ancillary Facilities available);
"Ancillary Limit" means the maximum amount (excluding accrued uncapitalised
interest, fees and similar charges) which an Ancillary Lender has agreed to
make available by way of Ancillary Facilities in accordance with clause 6
(Ancillary Facilities), less any part of that amount which has been
cancelled, reduced or terminated in accordance with this agreement or the
relevant Ancillary Facility Letter;
"Ancillary Outstandings" means the aggregate outstanding amount of the
Ancillary Facilities due to an Ancillary Lender at any time, calculated on
the following basis:
(a) all amounts of principal then outstanding under any overdraft or other
current account facilities, calculated on a net basis in accordance
with the usual practice of that Ancillary Lender;
(b) the maximum liability under all guarantees, bonds and letters of
credit then outstanding and issued under any guarantee, bonding or
letter of credit facilities made available by that Ancillary Lender;
and
(c) the amount which that Ancillary Lender (acting reasonably) may
determine represents its aggregate exposure in relation to any other
facility or financial accommodation in accordance with its usual
practice for calculating its exposure;
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"Annual Accounts" means the audited annual accounts of the Group delivered
or to be delivered to the Facility Agent under clause 20.10(c)(i)
(Financial statements);
"Approved Accounting Principles" means Irish gaap and, subject to those
principles, the accounting principles, standards and practices on the basis
of which the Original Audited Accounts were prepared;
"Arrangers' Fees Letter" means the letter from the Joint Mandated Lead
Arrangers to the Parent dated on or about the date of this agreement
setting out details of certain fees payable by the Parent in connection
with the Facilities;
"Auditors" means KPMG or any other firm of accountants which the Parent
appoints in accordance with clause 20.10(b) (Books of account and
auditors);
"Availability Period" means the period starting on the date of this
agreement and ending:
(a) on the expiry of the Certain Funds Period, in the case of the Term A
Facility and the Term B Facility; and
(b) one month before the Revolving Facility Repayment Date, in the case of
the Revolving Facility;
"Available Commitment" means, save as otherwise provided in this agreement,
the Revolving Commitment of a Revolving Lender less:
(a) the Original Dollar Amount of the aggregate participation of that
Revolving Lender in all outstanding Drawings under the Revolving
Facility; and
(b) the amount of the Ancillary Limit applicable to any Ancillary
Facilities made available by that Revolving Lender,
and taking into account any scheduled Drawing, repayment or prepayment in
respect of the Revolving Facility (other than a repayment or prepayment of
a Bank Guarantee by way of cash collateralisation) by assuming that it will
occur on its scheduled date;
"Bank Guarantee" means a guarantee or letter of credit issued by an Issuing
Lender under the Revolving Facility in the form agreed by the Parent, the
Facility Agent and the relevant Issuing Lender;
"Beneficiary" means the person approved by the relevant Issuing Lender
(such approval not to be unreasonably withheld) in whose favour a Bank
Guarantee has been or is to be issued;
"Borrower" means the Parent and each other Group Company which becomes a
borrower under this agreement in accordance with clause 18.1 (Additional
Borrowers) by executing an Accession Document;
"Business Day" means a day (other than a Saturday or a Sunday) on which
banks and financial markets are open in London and Dublin for the
transaction of business of the nature required by this agreement and:
(a) in relation to a transaction involving Euros, which is also a TARGET
Day; and
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(b) in relation to a transaction involving any other Optional Currency, on
which banks and foreign exchange markets are also open in the
principal financial centre of the country of that Optional Currency;
"Capital Expenditure" means expenditure which should be treated as capital
expenditure in accordance with the Approved Accounting Principles;
"Cash Collateral Account" means an account with the Security Agent (or any
other Lender) opened in the name of an Obligor which is designated by the
Parent and the Facility Agent for the purpose of receiving payments of cash
collateral under clause 1.4 (Cash cover) and/or clause 12 (Prepayment and
cancellation) and over which the Security Agent has a first priority
security interest under the Security Documents;
"Cashflow" has the meaning given to it in clause 20.14 (Financial
definitions);
"Certain Funds Period" means the period commencing on the date hereof and
ending on the earliest of:
(a) the date which falls four months after the posting of the Offer
Document;
(b) the date on which the Offer lapses or is withdrawn;
(c) the date which falls 15 days after the Offer has closed,
or if the Parent issues notices under Section 204 of the Irish Companies
Act, 1963 before the earliest of such dates, such longer period as is
necessary to acquire the remaining shares in the Target pursuant to Section
204 provided in any event the Certain Funds Period shall end on the date
falling six months from the date of the posting of the Offer Document;
"Clean Up Period" means the period commencing on the Unconditional Date and
ending 60 days later;
"Code" means the Irish Takeover Panel Act, 1997, Takeover Rules 2001 and
the Irish Takeover Panel Act, 1997, Substantial Acquisition Rules, 2001 in
each case made by the Irish Takeover Panel pursuant to the Irish Takeover
Panel Act, 1997 (as such rules may be revised, amended or replaced from
time to time);
"Commitment" means, in relation to a Lender, its Term A Commitment, its
Term B Commitment or its Revolving Commitment;
"Completion Date" means the first Drawdown Date;
"Compliance Certificate" means any compliance certificate provided in
accordance with clause 20.10(d) (Compliance certificates);
"Constitutional Documents" means the constitutional documents of the Parent
in the agreed form;
"Contingent Liability" means:
(a) the maximum actual and/or contingent liability of an Issuing Lender
under a Bank Guarantee at any time; or
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(b) the maximum actual and/or contingent liability of a Lender in relation
to a Bank Guarantee at any time under clause 7.4(b) (Indemnities);
"Creditor Accession Deed" has the meaning given to it in the Intercreditor
Deed;
"Default" means an Event of Default or a Potential Event of Default;
"Dollar Equivalent" means, in relation to an amount denominated in a
currency other than Dollars, the amount of that currency converted into
Dollars at the Spot Rate;
"Dollars" and "$" means the lawful currency of the United States of
America;
"Dormant Company" means each Group Company listed in Schedule 10 (Dormant
Companies) and any other Group Company which has not traded or has ceased
trading and which the Parent demonstrates to the Facility Agent's
satisfaction does not own assets or have liabilities (excluding liabilities
owed to another Group Company) in either case with an aggregate value
greater than $100,000 (or its Dollar Equivalent) or which are otherwise
material to the running of the Group's business;
"Drawdown Date" means the date for the making of a Drawing, as specified by
the relevant Borrower in the relevant Drawdown Request;
"Drawdown Request" means a notice requesting an Advance or the issue of a
Bank Guarantee in the form set out in part 1 or 2 (as appropriate) of
schedule 5;
"Drawing" means a utilisation by a Borrower of a Facility (other than an
Ancillary Facility) by way of the making of an Advance or the issue of a
Bank Guarantee;
"Drawstop Default" means any Event of Default arising under any of the
following provisions (but only so far as they affect or relate to Parent,
Loan Noteco or (in the case of clauses 21.1(e), (f), (g), (h) and (j) only
and to the extent only that such Event of Default would constitute an event
which would enable the Parent to invoke conditions 2 (i) (xiii) or (xiv) of
Appendix 2 of the Press Release as such conditions are reflected in the
Offer Document (regardless of whether the Parent has so invoked such
condition of the Offer)) the Target:
(a) clause 21.1(b) (Breach of other obligations) by virtue of a breach of
any of the undertakings in clause 20.3(c) (Negative pledge), clause
20.5 (Financing Arrangements and Undertakings) or paragraphs (b)(ii),
(e) or (f) of clause 20.11 (Offer undertakings);
(b) clause 21.1(c) (Misrepresentation) by virtue of a breach of any of the
representations in clauses 19.2 (Incorporation) to 19.5 (No
contravention) (inclusive), 19.19(a) (Newly incorporated companies) or
19.20 (Offer Document);
(c) clause 21.1(d) (Invalidity and Unlawfulness);
(d) clause 21.1(e) (Insolvency);
(e) clause 21.1(f) (Receivership and administration);
(f) clause 21.1(g) (Compositions and arrangements);
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(g) clause 21.1(h) (Winding up); and
(h) clause 21.1(j) (Suspension of Payments).
"EBITA" has the meaning given to it in clause 20.14 (Financial
definitions);
"EBITDA" has the meaning given to it in clause 20.14 (Financial
definitions);
"Employee Benefit Arrangements" means the benefit schemes or arrangements
in respect of any employees or past employees operated by any Group Company
or in which any Group Company participates and which provides benefits on
retirement, ill-health or injury, death or voluntary withdrawal from or
involuntary termination of employment, including termination indemnity
payments, life assurance arrangements and post retirement medical benefit;
"English Debenture" means a debenture governed by the laws of England and
Wales in the agreed form granting fixed and floating charges over the
assets and undertaking of the relevant company or companies in favour of
the Security Agent;
"Environment" means all gases, air, vapours, liquids, water, land, surface
and sub-surface soils, rock, flora, fauna, wetlands and all other natural
resources or part of such resources, including artificial or man-made
buildings, structures or enclosures;
"Environmental Approval" means any consent required under or in relation to
Environmental Laws;
"Environmental Laws" means all international, European Union, national,
federal, state or local statutes, orders, regulations or other law or
subordinate legislation or common law or guidance notes or regulatory codes
of practice, circulars and equivalent controls including judicial
interpretation of any of the foregoing concerning the Environment or health
and safety which are in existence now or in the future and are binding at
any time on each Group Company in the relevant jurisdiction in which that
Group Company has been or is operating (including by the export of its
products or its waste to that jurisdiction);
"Equity Documents" means the Constitutional Documents, the Investment
Agreement, the Investor Loan Note Instruments, the Investor Loan Notes, the
Alchemy Bridge Documents and all other documents and agreements entered
into in connection with any of those documents;
"Equity Investors" means the Original Equity Investors and, to the extent
any Investor Loan Notes are issued to Barclays Bank PLC in accordance with
the Alchemy Bridge Documents, Barclays Bank PLC in such capacity, and any
assignee or transferee of any interest in the Group under the Investment
Agreement or of any other rights under any Equity Document;
"ERISA" means Employee Retirement Income Security Act of 1974 (as amended)
and any rule or regulation issued thereunder;
"ERISA Affiliate" shall mean each business or entity which is a member of a
"controlled group of corporations," under "common control" or an
"affiliated service group" with a Group Company within the meaning of
Sections 414(b), (c) or (m) of the IR Code, or required to be aggregated
with a Group Company under Section 414(o) of the IR Code, or is under
"common control" with a Group Company, within the meaning of section
4001(a)(14) of ERISA;
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"EURIBOR" means, in relation to any Advance or overdue amount:
(a) the rate per annum equal to the offered quotation which appears on
Telerate Screen page 248 (or any replacement page on that service) at
or about 11.00 am (Central European Time) on the applicable Rate
Fixing Day for the currency of that Advance or overdue amount for a
period comparable to its Interest Period or, if no Telerate service is
available, on any other service which displays an average European
Banking Federation Interest Settlement Rate for the relevant currency
which the Facility Agent, after consultation with the Lenders and the
Parent selects;
(b) if no such offered quotation appears at or about 11.00 a.m. on the
relevant Rate Fixing Day:
(i) the arithmetic mean (rounded up, if necessary, to the nearest
four decimal places) of the rates (as quoted to the Facility
Agent at its request) offered by the Reference Banks to leading
banks in the London interbank market at or about 11.00 a.m. on
the applicable Rate Fixing Day for the currency of the relevant
Advance or overdue amount in an amount equal or comparable to an
Advance or overdue amount for the duration of the relevant
Interest Period; or
(ii) subject to clause 10.1 (Market Disruption Notice), if any
Reference Bank does not provide a quotation as contemplated by
sub-paragraph (i) above, the relevant arithmetic mean determined
on the basis of the quotations supplied by the remaining
Reference Banks;
"Euro" and "e" means the single currency of Participating Member States of
the European Union;
"Event of Default" means any event specified in clause 21.1 (List of
events);
"Excess Cashflow" means Cashflow for a Financial Year less the aggregate of
Total Debt Service for that Financial Year;
"Excluded Facilities" means that amount of any working capital facilities
in relation to which a Bank Guarantee has been issued;
"Existing Lender" has the meaning given to it in clause 27.2 (Transfers by
Lender);
"Facilities" means the Term Facilities, the Revolving Facility and the
Ancillary Facilities;
"Fees Letters" means the Agency Fees Letter and the Arranger's Fees Letter;
"Finance Documents" means the Senior Finance Documents and the Mezzanine
Finance Documents;
"Finance Parties" means the Joint Mandated Lead Arrangers, each Agent, each
Lender, each Ancillary Lender, each Issuing Lender and each Hedging Lender;
"Financial Assistance Documents" means the documents in the agreed terms
relating to the financial assistance procedures to be undertaken by members
of the Target Group in accordance with this agreement subject to such
amendments thereto as the Facility Agent may reasonably require in order
that such documents may conform with best practice having regard to the
circumstances prevailing at the time such documents are entered into;
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"Financial Indebtedness" means (without double counting) any indebtedness
in relation to or arising under or in connection with:
(a) any money borrowed (including any overdraft);
(b) any debenture, bond (other than a performance bond issued in the
ordinary course of trading by one Group Company in relation to the
obligations of another Group Company), note or loan stock or other
similar instrument;
(c) any acceptance or documentary credit;
(d) any receivable sold or discounted (otherwise than on a non-recourse
basis);
(e) the purchase price of any asset or service to the extent payable by a
Group Company after the time of sale or delivery to a Group Company,
where the deferred payment is:
(i) arranged as a method of raising finance; or
(ii) paid more than six months after the sale or delivery date;
(f) the sale price of any asset or service to the extent paid before the
time of sale or delivery by the Group Company liable to effect that
sale or delivery, where the advance payment is arranged as a method of
raising finance;
(g) any finance lease, hire purchase, credit sale or conditional sale
agreement;
(h) for the purpose of clause 21.1(o) (Cross default) only, Hedging
Instruments;
(i) any amount payable by any Obligor in relation to the redemption of any
share capital or other securities issued by it or any other Obligor,
other than amounts payable to another Obligor;
(j) any amount raised under any other transaction having the commercial
effect of a borrowing or treated as borrowings under the Approved
Accounting Principles; or
(k) any guarantee of indebtedness of any person of a type referred to in
paragraphs (a) to (j) (inclusive) above;
"Financial Year" means the period of 12 months ending on 30 June in each
year (or, after the Group adopts 31 December as its accounting reference
date, 31 December);
"Foothill Borrowers" means Riverdeep Interactive Learning Limited and
Riverdeep, Inc.;
"Foothill Facilities" means the facilities made available to the Foothill
Borrowers pursuant to the Foothill Facility Agreement;
"Foothill Facility Agreement" means the loan and security agreement dated
23 August 2002 entered into between Target, Riverdeep Interactive Learning
Limited, Riverdeep, Inc. and Foothill Capital Corporation;
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"Formalities Certificate" means a certificate in the agreed form or with
such amendments thereto as the Facility Agent may reasonably require having
regard to the circumstances affecting any particular Group Company;
"Group" means the Parent and its Subsidiaries from time to time;
"Group Company" means a member of the Group;
"Guarantee Increase Deed" means a deed substantially in the form set out in
Schedule 7 part 2 extending the guarantees given pursuant to clause 20.5(g)
(Guarantees and security from Target and its Subsidiaries) to guarantee the
Term A Advances and the Term B Advances and any other obligations under the
Senior Finance Documents which have been whitewashed through execution of
the Financial Assistance Documents pursuant to clause 20.11(h)(ii) (Take
private procedure and the provision of Target Security);
"Guarantors" means the Group Companies listed in schedule 3 and each other
Group Company which becomes a guarantor under this agreement in accordance
with clause 18.3 (Additional Guarantors), clause 20.5(g) (Guarantees and
Security from Target and its Subsidiaries) or clause 20.11(h) (Take private
procedure and provision of Target security);
"Hedging Agreements" means any instrument and/or agreement entered into by
a Group Company in accordance with clause 20.5(d) (Hedging) for the purpose
of managing or hedging currency and/or interest rate risk in relation to
the Facilities and any Hedging Debenture;
"Hedging Debenture" means a guarantee and debenture governed by the laws of
the Republic of Ireland in the agreed form granting fixed and floating
charges over the assets and undertaking of the relevant company or
companies in favour of the Security Agent to secure all obligations
outstanding under the Hedging Agreements;
"Hedging Instrument" means any forward rate agreement, option, swap, cap,
floor, any combination or hybrid of the foregoing and any other financial
derivative agreement;
"Hedging Lender" means a Lender (or an Affiliate of a Lender) in its
capacity as provider of currency and/or interest rate hedging under any
Hedging Agreement;
"Holding Company" means a holding company as defined in section 736 of the
Companies Xxx 0000 but excluding any of the Original Equity Investors;
"Individual Shareholders" means Xxxxx X'Xxxxxxxxx and Xxxxxxx XxXxxxxx and
which shall, in the case of Xxxxxxx XxXxxxxx include Lifetime Learning
Limited;
"Insurance Report" means the insurance report in the agreed form prepared
by AON, together with the employee benefits due diligence report in the
agreed form also prepared by AON;
"Intellectual Property" means the Intellectual Property Rights owned or
used by Group Companies throughout the world or the interests of any Group
Company in any of those Intellectual Property Rights, together with the
benefit of all agreements entered into or the benefit of which is enjoyed
by any Group Company relating to the use or exploitation of any of those
Intellectual Property Rights;
"Intellectual Property Rights" means all patents and patent applications,
trade and service marks and trade and/or service xxxx applications (and all
goodwill associated with any such registrations or
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applications), all brand and trade names, all copyrights and rights in the
nature of copyright, all design rights, all registered designs and
applications for registered designs, all trade secrets, know-how and all
other intellectual property rights throughout the world;
"Intercreditor Deed" means the intercreditor deed dated on or about the
date of this agreement and entered into between, amongst others, each of
the parties to the Senior Finance Documents, the Mezzanine Finance
Documents and each of the Original Equity Investors;
"Interest Period" means a period by reference to which interest is
calculated and payable on an Advance or overdue amount;
"Investment Agreement" means the shareholders' agreement in the agreed form
dated on or before the date of this agreement between, amongst others, the
Original Equity Investors providing, amongst other things, for the
subscription of shares in the Parent;
"Investor Loan Note Instrument" means the loan note instrument in the
agreed form dated on or before the date of this agreement providing for the
issue of the Investor Loan Notes;
"Investor Loan Notes" means the subordinated unsecured guaranteed loan
notes 2009 of Loan Noteco in the agreed form;
"IR Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, including the regulations promulgated
thereunder;
"Irish Debenture" means a debenture governed by the laws of the Republic of
Ireland in the agreed form granting fixed and floating charges over the
assets and undertaking of the relevant company or companies in favour of
the Security Agent;
"Irish gaap" means generally accepted accounting principles from time to
time in the Republic of Ireland and approved by the Accounting Standards
Board;
"Issuing Lender" means any Lender in its capacity as issuer of a Bank
Guarantee;
"Key Executive" means each of Xxxxx X'Xxxxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx
Xxxxxxx;
"Key Executive Policies" means the insurance policies effected or to be
effected by the Parent in relation to the lives of each Key Executive, in
each case for cover (for $1,500,000) for death and critical illness for a
term of 3 years, in accordance with clause 20.6(a)(ii) (Insurance);
"KPMG Tax Structure Paper" means the structure paper prepared by KPMG in a
form agreed with the Facility Agent dated on or about the date of this
agreement;
"Lead Equity Investors" means limited partnerships managed by Alchemy
Partners (Guernsey) Limited (and the nominee company of those limited
partnerships, being currently Alchemy Partners Nominees Limited);
"Legal Report" means the legal report in the approved form prepared by
Xxxxxxxx Xxxxxx Xxxxxxxx and White & Case LLP in relation to the Target
Group;
"Lenders" means the Term A Lenders, the Term B Lenders and the Revolving
Lenders;
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"Lending Office" means the office through which a Lender is acting for the
purposes of this agreement, which, subject to clause 3.2 (Lending Office),
will be the office set opposite the name of that Lender in schedule 1 (or
in any relevant Transfer Certificate);
"LIBOR" means, in relation to any Advance or overdue amount:
(a) the rate per annum equal to the offered quotation which appears on
Telerate Screen page 3750 or (as appropriate) 3740 (or any replacement
pages on that service) at or about 11.00 am on the applicable Rate
Fixing Day for the currency of the relevant Advance or overdue amount
for a period comparable to its Interest Period or, if no Telerate
service is available, on any other service which displays an average
British Bankers Association Interest Settlement Rate for the relevant
currency which the Facility Agent, after consultation with the Lenders
and the Parent, selects; and
(b) if no such offered quotation appears on Telerate Page 3750 or 3740 (as
the case may be) at or about 11.00 am on the relevant Rate Fixing Day:
(i) the arithmetic mean (rounded up, if necessary, to the nearest
four decimal places) of the rates (as quoted to the Facility
Agent at its request) offered by the Reference Banks to leading
banks in the London interbank market at or about 11.00 am on the
applicable Rate Fixing Day for the currency of the relevant
Advance or overdue amount in an amount equal or comparable to an
Advance or overdue amount for the duration of the relevant
Interest Period; or
(ii) subject to clause 10.1 (Market Disruption Notice), if any
Reference Bank does not provide a quotation as contemplated by
sub-paragraph (i) above, the relevant arithmetic mean determined
on the basis of the quotations supplied by the remaining
Reference Banks;
"Loan Noteco" means Hertal (Investments) Limited;
"Majority Lenders" means, at any time:
(a) Lenders whose aggregate Commitments at that time aggregate more than
662/3 per cent. of the Total Commitments at that time; or
(b) if the Total Commitments have at that time been reduced to zero,
Lenders whose Commitments aggregated more than 662/3 per cent. of the
Total Commitments immediately before the relevant reduction;
"Management Accounting Period" means each calendar month period adopted by
the Parent for the purpose of its management accounts;
"Management Financial Model" means the financial model in the agreed form
for the Group (and incorporating financial projections and forecasts for
the business of the Target Group in the agreed form) dated on or around the
date of this agreement;
"Mandatory Cost" means the percentage rate per annum calculated by the
Facility Agent in accordance with schedule 8 (Mandatory Cost Formulae) and
any costs as a result of a Lender complying with Regulation D of the US
Board of Governors to the Federal Reserve System;
-11-
"Margin" means:
(a) in relation to the Term A Facility, 2.50 per cent. per annum, subject
to clause 8.6 (Margin adjustment);
(b) in relation to the Term B Facility, 3.00 per cent. per annum; and
(c) in relation to the Revolving Facility, 2.50 per cent. per annum,
subject to clause 8.6 (Margin adjustment);
"Margin Addition" means 1.00 per cent. per annum;
"Market Report" means the market report in the approved form prepared by
McKinsey & Company in relation to the Target Group;
"Material Adverse Effect" means any effect, event or matter:
(a) which is materially adverse to:
(i) the assets or financial condition of the Group (taken as a
whole);
(ii) the ability of the Obligors to perform their payment obligations
under any Senior Finance Document or their obligations under
clause 20.13 (Financial covenants) of this agreement; or
(b) which results in any Security Document not providing to the Security
Agent security over the assets expressed to be secured under that
Security Document;
"Material Intellectual Property" means any Intellectual Property which is
material to the business of any Group Company or to the business of the
Group as a whole from time to time;
"Material Subsidiary" means:
(a) any Obligor; or
(b) a Subsidiary of the Parent the gross assets, gross revenues or EBITA
of which (consolidated where that Subsidiary itself has Subsidiaries)
as at the date at which its latest audited consolidated financial
statements were prepared or, as the case may be, for the financial
period to which those financial statements relate account for 5 per
cent or more of the consolidated gross assets, gross revenues or EBITA
of the Group (all as calculated by reference to the latest audited
consolidated financial statements of the Group); or
(c) a Subsidiary of the Parent to which has been transferred (whether in a
single transaction or a series of transactions (whether related or
not)) the whole or substantially the whole of the assets of a
Subsidiary which immediately prior to such transactions was a Material
Subsidiary.
For the purposes of this definition:
(i) if a Subsidiary of the Parent becomes a Material Subsidiary under
paragraph (c) above, then the Material Subsidiary by which the
relevant transfer was made shall, subject to paragraph (a) and
(b) above, cease to be a Material Subsidiary; and
-12-
(ii) if a Subsidiary is acquired by the Parent after the end of the
financial period to which the latest audited consolidated
financial statements of the Group relate, those financial
statements shall be adjusted as if that Subsidiary had been shown
in them by reference to its then latest audited financial
statements (consolidated if appropriate) until audited
consolidated financial statements of the Group for the financial
period in which the acquisition is made have been prepared;
"Maturity Date" means the last day of the Interest Period for a Revolving
Advance;
"Mezzanine Facility" has the meaning given to "Facility" in the Mezzanine
Loan Agreement;
"Mezzanine Finance Documents" has the meaning given to it in the Mezzanine
Loan Agreement;
"Mezzanine Lenders" has the meaning given to it in the Mezzanine Loan
Agreement;
"Mezzanine Loan Agreement" means the mezzanine loan agreement in the agreed
form dated on or about the date of this agreement between the Parent as
borrower, the Parent and Loan Noteco as guarantors, Barclays Leveraged
Finance and RBS Mezzanine Limited as Joint Mandated Lead arrangers, the
lenders named in that agreement, RBS Mezzanine Limited as facility agent
and Barclays Bank PLC as security agent;
"Monthly Accounts" means the monthly consolidated management accounts of
the Group delivered or to be delivered to the Facility Agent under clause
20.10(c)(ii) (Financial statements);
"Multiemployer Plan" means a Plan that is a "multiemployer plan" within the
meaning of 4001(a)(3) of ERISA;
"National Currency Unit" has the meaning given to it in council Regulation
EC No. 1103/97 of 17 June, 1997 made under Article 235 of the Treaty on
European Union;
"Net Interest" has the meaning given to it in clause 20.14 (Financial
definitions);
"Net Proceeds" means the aggregate consideration received by any Group
Company in relation to the disposal of all or any part of the assets of any
Group Company (including the amount of any inter-company debt of any Group
Company disposed of which is repaid in connection with that disposal and
any disposal (by way of grant of licence or otherwise) of any Intellectual
Property), but after deducting all Taxes and other reasonable costs and
expenses incurred by continuing Group Companies in connection with that
disposal;
"Obligors" means the Parent, Loan Noteco, each Borrower and each Guarantor;
"Offer" means the recommended pre-conditional cash offer with a partial
share alternative proposed to be made by the Parent and (outside the United
States) Goodbody Corporate Finance and XX Xxxxxx PLC on behalf of the
Parent on the terms set out in the Press Release to acquire the whole of
the ordinary share capital of Target not already owned by the Parent as
such offer may from time to time be amended, increased, revised or waived,
as permitted in accordance with the terms of this agreement;
"Offer Costs" means all costs, fees and expenses (and Taxes thereon) and
all stamp, documentary, registration or similar taxes and duties payable by
or incurred by or on behalf of the Parent and the Target Group in
connection with the Offer including, without limitation, the preparation,
negotiation
-13-
and entry into of the necessary financing documents and all other
documentation in relation to the Offer;
"Offer Document" means the document (substantially in the agreed terms
subject to such amendments as the Facility Agent shall approve in writing
(such approval not to be unreasonably withheld or delayed)) to be sent to
shareholders of the Target containing the formal Offer;
"Operating Budget" means a budget, in such form and content as the Facility
Agent shall reasonably require, comprising projected balance sheet,
projected profit and loss account and projected cashflow statement
(including details of projected Capital Expenditure) for the Group for a
Financial Year, delivered under clause 20.10 (Information and accounting
undertakings);
"Optional Currencies" means Euros, Dollars and any other currency which the
Facility Agent has confirmed to the Parent is freely available in the
London foreign exchange market and which all relevant Lenders have
confirmed they are willing to advance;
"Original Audited Accounts" means the audited consolidated annual accounts
of the Target Group for the Financial Year ending 30 June 2002;
"Original Equity Investors" means the Lead Equity Investors, MSD Capital
and the Individual Shareholders;
"Original Dollar Amount" means:
(a) in the case of a Drawing in Dollars, the amount of that Drawing; or
(b) in the case of a Drawing in an Optional Currency, the Dollar
Equivalent of that Drawing calculated two Business Days before its
Drawdown Date;
"Original Management Accounts" means the unaudited consolidated management
accounts of the Target Group for the month ending 30 November 2002;
"Panel" means the Irish Takeover Panel;
"Participating Member States" has the meaning given to it in council
Regulation EC No. 1103/97 of 17 June, 1997 made under Article 235 of the
Treaty on European Union;
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto;
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of
the IR Code maintained by or contributed to by any Group Company or
Guarantor or any ERISA Affiliate;
"Potential Event of Default" means an event which, with the giving of
notice, the lapse of time, the making of any determination or the
fulfilment of any other condition (in each case as specified in clause 21.1
(List of events)) will, or could reasonably be expected to, constitute an
Event of Default;
"Press Release" means the press announcement in the agreed form to be
released by the Parent to announce the terms of the Offer;
"Qualifying Lender" means, in relation to a Borrower, a Lender which is:
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(a) under the domestic law of the jurisdiction in which that Borrower is
resident, entitled to receive payments of interest (or any other
payments under any Senior Finance Document) arising in that
jurisdiction free of any deduction or withholding for or on account of
any Tax; or
(b) under a double tax treaty in force between the jurisdiction in which
that Borrower is resident and the jurisdiction in which that Lender is
resident (as the term is defined in the relevant double tax treaty),
entitled to receive payments of interest (or any other payments under
any Senior Finance Document) arising in the Borrower's jurisdiction
free of any deduction or withholding for or on account of any Tax;
"Quarterly Accounts" means the relevant Monthly Accounts for each
Accounting Quarter;
"Rate Fixing Day" means the day which market practice in the applicable
interbank market treats as the rate fixing day for obtaining deposits in
the currency in question;
"Receiving Agent" means Computershare Investor Services (Ireland) Limited
of Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx 00,
Republic of Ireland;
"Receiving Agent Account" means the account opened by the Parent with the
Receiving Agent for the purpose of receiving monies up-streamed to the
Parent by the Loan Noteco from the proceeds of subscriptions for loan stock
in Loan Noteco and the proceeds of subscriptions for shares in the Parent
pursuant to the Investment Agreement;
"Reference Banks" means the principal London offices of Barclays Bank PLC
and of The Royal Bank of Scotland plc and such other banks as may be
appointed by the Facility Agent in consultation with the Parent.
"Repayment Dates" means each date on which an instalment is due for
repayment under clause 11.1 (Term Advances), the Term A Final Repayment
Date, the Term B Final Repayment Date and the Revolving Facility Repayment
Date;
"Reportable Event" means:
(a) a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event, provided, however,
that a failure to meet the minimum funding standard of Section 412 of
the IR Code and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the IR Code; or
(b) the withdrawal of an Obligor or any ERISA Affiliate from a Plan during
a plan year in which it was a "substantial employer" as defined in
section 4001(a)(2) of ERISA;
(c) (the filing (or reasonable expectation of a filing) of a notice of
intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA;
(d) the institution of proceedings to terminate a Plan by the PBGC;
-15-
(e) any other event or condition which constitutes grounds under section
4042 of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan; or
(f) a Group Company establishes or amends any Welfare Plan that provides
post-employment welfare benefits in a manner that would increase the
liability of a Group Company;
"Reports" means the Accountants' Report, the Legal Report, Insurance Report
and the Market Report, in each case read in conjunction with the relevant
disclosures in the disclosure letter from management delivered pursuant to
the Investment Agreement;
"Reservations" means the principle that equitable remedies are remedies
which may be granted or refused at the discretion of the court and damages
may be regarded as an adequate remedy, the limitation of enforcement by
laws relating to bankruptcy, insolvency, court protection, liquidation,
reorganisation, court schemes, moratoria, administration and other laws
generally affecting the rights of creditors, the time-barring of claims
under the Limitation Acts (and similar legislation), the possibility that
an undertaking to assume liability for or to indemnify a person against
non-payment of stamp duty may be void, the fact that a court may refuse to
give effect to a purported contractual obligation to pay costs imposed upon
another party in respect of the costs of any unsuccessful litigation
brought against that party or may not award by way of costs all of the
expenditure incurred by a successful litigant in proceedings brought before
that court, or that a court may stay proceedings if concurrent proceedings
based on the same grounds and between the same parties have previously been
brought before another court, that a court may not give effect to the
provisions of clause 30.3 (Invalidity of any Provision) (or any similar
provision in another Senior Finance Document) and that interest at a
default rate on overdue amounts may be a penalty and not recoverable;
"Revolving Advance" means the principal amount of each advance made or to
be made under the Revolving Facility, as reduced from time to time by
repayment or prepayment;
"Revolving Commitment" means:
(a) in relation to a Lender identified in schedule 1, the amount set
opposite its name under the heading "Revolving Commitment" in schedule
1 and the amount of any other Revolving Commitment transferred to it
under this agreement; or
(b) in relation to any other Lender, the amount of any Revolving
Commitment transferred to it under this agreement,
to the extent not cancelled, reduced or transferred by it under this
agreement;
"Revolving Facility" means the revolving credit facility made available by
the Revolving Lenders under clause 2.1(c) (Facilities);
"Revolving Facility Repayment Date" means the earlier of:
(a) 15 April 2007; and
(b) the repayment, prepayment and/or cancellation in full of the Term A
Facility;
"Revolving Lenders" means:
(a) the persons identified in schedule 1 as participating in the Revolving
Facility; and
-16-
(b) each Transferee which has become a party to this agreement in relation
to the Revolving Facility in accordance with clause 27 (Changes to
parties),
in each case until its entire participation in the Revolving Facility has
been assigned or transferred to a Transferee in accordance with clause 27
(Changes to parties) and all amounts owing to it under the Senior Finance
Documents in relation to the Revolving Facility have been paid in full;
"Second Press Release" means the press release in agreed form confirming
the satisfaction of the pre-conditions in the Press Release;
"Security Documents" means each of the security documents specified in
schedule 9 and all other documents creating, evidencing or granting a
Security Interest in favour of any Finance Party in relation to the
obligations of any Obligor under any Senior Finance Document;
"Security Interest" means any mortgage, charge (fixed or floating), pledge,
lien, hypothecation, right of set-off, security trust, assignment by way of
security, reservation of title, any other security interest or any other
agreement or arrangement (including a sale and repurchase arrangement)
having the commercial effect of conferring security;
"Senior Debt" means, at any time, the aggregate outstanding principal of
all Financial Indebtedness of the Group (excluding the Contingent Liability
in respect of any Bank Guarantees) under the Facilities calculated on a
consolidated basis;
"Senior Finance Documents" means this agreement, each Security Document,
the Intercreditor Deed, each Hedging Agreement, each Ancillary Document,
each Accession Document, each Transfer Certificate, the Fees Letter and any
other document designated as a Senior Finance Document by the Parent and
the Facility Agent;
"Service Contracts" means:
(a) the contracts of employment made between Riverdeep Inc. and each of
Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxx each as amended by a Deed of
Variation of Employment Terms entered into by Riverdeep Inc. and each
of them on or before the Unconditional Date;
(b) the contract of employment dated 6 October 1999 made between
Silverbank Limited and Xxxxx X'Xxxxxxxxx as amended by a Deed of
Variation of Employment Terms dated on or before the Unconditional
Date;
(c) agreement for the provision of services of a chief executive officer
dated 22 September 1999 made between Riverdeep Interactive Learning
Limited and Silverbank Limited as amended by a Deed of Variation of an
Agreement dated on or before the Unconditional Date; and
(d) the restrictive covenant agreement to be entered into between
Riverdeep Interactive Learning Limited and Xxxxx X'Xxxxxxxxx to be
dated on or before the Unconditional Date;
"Share Option Scheme" means the share option scheme in the agreed form to
be implemented by the Parent after the Unconditional Date;
"Share Pledge" means a pledge of shares governed by English law;
-17-
"Sonopress Contract" means the services agreement by and between Sonopress
LLC and Broderbund LLC dated 1 July 2002 and any replacement thereof;
"Spot Rate" means the spot rate of exchange of the Facility Agent (as
determined by the Facility Agent) for the purchase of Dollars with the
appropriate amount of a currency in the London foreign exchange market in
the ordinary course of business at or about 10.00 am on the day in question
for delivery two Business Days later;
"Sterling" or "(pound)" means the lawful currency of the United Kingdom;
"Structure Document" means the document prepared by the Parent comprising:
(a) diagrams of the Group and the Target Group as at the date of this
agreement and as they are anticipated to be immediately after the
Unconditional Date;
(b) brief corporate details as at the date of the Structure Document
indicating which members of the Target Group are Dormant Companies and
which had positive net assets at the date of their most recent audited
account;
(c) details of the anticipated movements of funds in repayment of existing
facilities of the Target Group which will take place on, or within 30
days after, the Unconditional Date; and
(d) details of the anticipated sources of funds for the purposes of the
Offer;
"Subsidiary" means a subsidiary and (for the purposes of the financial
information to be delivered, and the financial covenants to be complied
with, under this agreement) a subsidiary undertaking as defined in sections
736 and 258 of the Companies Xxx 0000 respectively;
"Syndication Date" means the earlier of:
(a) the date the Facility Agent notifies the Parent and the other Finance
Parties that primary syndication has been completed; and
(b) the date falling four months after the first Drawdown Date;
"Syndication Letter" means the letter from the Joint Mandated Lead
Arrangers to the Parent setting out the changes which it may have to make
to the Facilities in order to achieve a successful syndication;
"Syndication Memorandum" shall have the meaning set out in clause 3.4
(Syndication);
"Target" means Riverdeep Group Plc (registered no 317234);
"TARGET Day" means a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer system is operating;
"Target Group" means Target and all its Subsidiaries;
"Target Shares" means shares in the Target;
-18-
"Tax" means all present and future income and other taxes, levies,
assessments, imposts, deductions, charges, duties, compulsory loans and
withholdings (wherever imposed) and any charges in the nature of taxation
together with interest thereon and penalties and fines in relation thereto,
if any, and any payments made on or in relation thereof and "Taxation"
shall be construed accordingly;
"Term Advance" means a Term A Advance and/or a Term B Advance;
"Term A Advances" means the principal amount of the advances made or to be
made under the Term A Facility, as reduced from time to time by repayment
or prepayment;
"Term A Commitment" means:
(a) in relation to a Lender identified in schedule 1, the amount set
opposite its name under the heading "Term A Commitment" in schedule 1
and the amount of any other Term A Commitment transferred to it under
this agreement; or
(b) in relation to any other Lender, the amount of any Term A Commitment
transferred to it under this agreement,
to the extent not cancelled, reduced or transferred by it under this
agreement;
"Term A Facility" means the term loan facility made available by the Term A
Lenders under clause 2.1(a) (Facilities);
"Term A Final Repayment Date" means the last date on which an instalment is
due for repayment under clause 11.1(a) (Term Advances);
"Term A Lenders" means:
(a) the parties identified in schedule 1 as participating in the Term A
Facility; and
(b) each Transferee which has become a party to this agreement in relation
to the Term A Facility in accordance with clause 27 (Changes to
parties),
in each case until its entire participation in the Term A Facility has been
assigned or transferred to a Transferee in accordance with clause 27
(Changes to parties) and all amounts owing to it under the Senior Finance
Documents in relation to the Term A Facility have been paid in full;
"Term B Advances" means the principal amount of the advances made or to be
made under the Term B Facility, as reduced from time to time by repayment
or prepayment;
"Term B Commitment" means:
(a) in relation to a Lender identified in schedule 1, the amount set
opposite its name under the heading "Term B Commitment" in schedule 1
and the amount of any other Term B Commitment transferred to it under
this agreement; or
(b) in relation to any other Lender, the amount of any Term B Commitment
transferred to it under this agreement,
to the extent not cancelled, reduced or transferred by it under this
agreement;
-19-
"Term B Facility" means the term loan facility made available by the Term B
Lenders under clause 2.1(b) (Facilities);
"Term B Final Repayment Date" means the last date on which an instalment is
due for repayment under clause 11.1(b) (Term Advances); and
"Term B Lenders" means:
(a) the parties identified in schedule 1 as participating in the Term B
Facility; and
(b) each Transferee which has become a party to this agreement in relation
to the Term B Facility in accordance with clause 27 (Changes to
parties),
in each case until its entire participation in the Term B Facility has been
assigned or transferred to a Transferee in accordance with clause 27
(Changes to parties) and all amounts owing to it under the Senior Finance
Documents in relation to the Term B Facility have been paid in full.
"Term Commitments" means the Term A Commitments and the Term B Commitments;
"Term Facilities" means the Term A Facility and the Term B Facility;
"Total Available Commitments" means the aggregate of all the Available
Commitments at any time;
"Total Commitments" means the aggregate of all the Commitments at any time;
"Total Debt Service" has the meaning given to it in clause 20.14 (Financial
definitions);
"Transaction Documents" means the Finance Documents, the Equity Documents,
the Service Contracts, the Press Release and the Offer Document;
"Transfer Certificate" means a certificate substantially in the form set
out in part 1 of schedule 5;
"Transferee" has the meaning given to it in clause 27.2(a) (Assignments and
transfers by Lenders);
"Treaty on European Union" means the Treaty of Rome signed on 25 March 1957
as amended by the Single Xxxxxxxx Xxx 0000 and the Maastricht Treaty signed
on 7 February 1992;
"TU Agreement" means the asset purchase agreement dated 29 May 2002 between
Target, TU SUB LLC and Teacher Universe Inc.;
"Unconditional Date" means the date on which the Offer is declared
unconditional in all respects;
"Underwriting Agreement" means the agreement to be entered into between
Hertal Acquisitions plc and Xxx XxXxxxxx, in the agreed form;
"Unfunded Liabilities" means the amount (if any) by which the present value
of all nonforfeitable benefits under each of the Plans exceeds the current
value of such Plan assets allocable to such benefits, all determined in
accordance with the respective most recent valuations for such Plan using
applicable PBGC plan termination actuarial assumptions (the terms "present
value" and "current value" shall have the same meanings specified in
section 3 of ERISA);
-20-
"USA" means the United States of America;
"US Bankruptcy Code" means title 11 of the United States Code;
"US Obligor" means any Obligor that is incorporated under the laws of any
state or territory of the USA or the District of Columbia;
"Warrant Instrument" means the warrant instrument, in the agreed terms,
constituting the warrants issued in accordance with the Mezzanine Loan
Agreement; and
"Welfare Plan" means a "welfare plan" as such term is defined in section
3(1) of ERISA.
1.2 Construction
In this agreement, unless a contrary intention appears, a reference to:
(a) a document being "in the agreed form" means in a form agreed between
the Parent and the Facility Agent;
(b) an "agreement" includes any legally binding arrangement, concession,
contract, deed or franchise (in each case whether oral or written);
(c) an "amendment" includes any amendment, supplement, variation,
novation, modification, replacement or restatement and "amend",
"amending" and "amended" shall be construed accordingly;
(d) a Report being in the "approved form" means a Report the scope and
content of which has been approved by the Joint Mandated Lead
Arrangers, which is addressed to (and can be relied on by) the Finance
Parties from time to time and which has been duly signed by its
author;
(e) "assets" includes property, business, undertaking and rights of every
kind, present, future and contingent (including uncalled share
capital) and every kind of interest in an asset;
(f) a "consent" includes an authorisation, approval, exemption, licence,
order, permission or waiver;
(g) a "filing" includes any filing, registration, recording or notice;
(h) a "guarantee" includes any indemnity or other obligation (whatever
called) of any person:
(i) to pay, purchase, provide funds (whether by the advance of money,
the purchase of or subscription for shares or other investments,
the purchase of assets or services, the making of payments under
an agreement or otherwise) for the payment of, indemnify against
the consequences of default in the payment of, or otherwise be
responsible for, any indebtedness of any other person; or
(ii) to be responsible for the performance of any obligations by or
the solvency of any other person,
-21-
and "guaranteed" and "guarantor" shall be construed accordingly;
(i) "including" means including without limitation and "includes" and
"included" shall be construed accordingly;
(j) "indebtedness" includes any obligation (whether incurred as principal,
guarantor or as surety) for the payment or repayment of money, whether
present or future, actual or contingent;
(k) "losses" includes losses, actions, damages, claims, proceedings,
costs, demands, expenses (including fees) and liabilities and "loss"
shall be construed accordingly;
(l) a "month" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar
month, except that:
(i) if any such period would otherwise end on a day which is not a
Business Day, it shall end on the next Business Day in the same
calendar month or, if none, on the preceding Business Day; and
(ii) if a period starts on the last Business Day in a calendar month,
or if there is no numerically corresponding day in the month in
which that period ends, that period shall end on the last
Business Day in that later month,
and references to "months" shall be construed accordingly;
(m) a "person" includes any person, individual, firm, company,
corporation, government, state or agency of a state or any undertaking
(within the meaning of section 259(1) of the Companies Act 1985) or
other association (whether or not having separate legal personality)
or any two or more of the foregoing;
(n) a "regulation" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental body, agency, department or regulatory, self-regulatory
or other authority or organisation;
(o) the "winding-up" of any person includes its dissolution and/or
termination and/or any equivalent or analogous proceedings under the
law of any jurisdiction in which that person is incorporated,
registered, established or carries on business or to which that person
is subject; and
(p) an obligation to pay interest under any of the Senior Finance
Documents includes, for the avoidance of doubt an obligation to pay
post-petition interest in any proceeding under the US Bankruptcy Code
or other applicable bankruptcy laws.
1.3 Other references
In this agreement, unless a contrary intention appears:
(a) a reference to any person is, where relevant, deemed to be a reference
to or to include, as appropriate, that person's successors and
permitted assignees or transferees;
(b) references to clauses and schedules are references to, respectively,
clauses of and schedules to this agreement and references to this
agreement include its schedules;
-22-
(c) a reference to (or to any specified provision of) any agreement or
document (including the Senior Finance Documents) is to be construed
as a reference to that agreement or document (or that provision) as it
may be amended from time to time, but excluding for this purpose any
amendment which is contrary to any provision of any Senior Finance
Document;
(d) a reference to a statute, statutory instrument or accounting standard
or any provision thereof is to be construed as a reference to that
statute, statutory instrument or accounting standard or such provision
thereof, as it may be amended or re-enacted from time to time;
(e) a time of day is a reference to London time;
(f) the index to and the headings in this agreement are inserted for
convenience only and are to be ignored in construing this agreement;
and
(g) words importing the plural shall include the singular and vice versa.
1.4 Cash cover
(a) If a Borrower is obliged under this agreement or any Ancillary
Facility Letter to repay or prepay or provide cash cover in relation
to any contingent liability under a Bank Guarantee or an Ancillary
Facility, that Borrower shall, on the date for that repayment,
prepayment or provision of cash cover:
(i) by agreement with the relevant Beneficiary, reduce that
contingent liability by the relevant amount; or
(ii) pay the relevant amount to the credit of a Cash Collateral
Account.
(b) Any amounts standing to the credit of any Cash Collateral Account
shall bear interest at the rate normally offered to corporate
depositors on similar deposits by the Finance Party with which that
account is held.
1.5 Currency conversion
For the purposes of the Senior Finance Documents (other than clauses 20.13
(Financial covenants) to 20.15 (Calculation) (inclusive)), if a Dollar
amount needs to be determined, any amount which is denominated in a
currency other than Dollars will be converted into Dollars using the Spot
Rate on that date.
2. THE FACILITIES
2.1 Facilities
Subject to the other provisions of this agreement:
(a) the Term A Lenders agree to make available to the Parent a term loan
facility in a maximum aggregate principal amount not exceeding
$80,000,000 (or its equivalent in Euro) which shall be available by
way of Term A Advances;
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(b) the Term B Lenders agree to make available to the Parent a term loan
facility in a maximum aggregate principal amount not exceeding
$35,000,000 (or its equivalent in Euro) which shall be available by
way of Term B Advances;
(c) the Revolving Lenders agree to make available to the Borrowers a
revolving credit facility in a maximum aggregate principal amount not
exceeding $20,000,000 (or its equivalent in Optional Currencies)
which:
(i) shall be available by way of Revolving Advances and Bank
Guarantees; and
(ii) may include Ancillary Facilities up to the Ancillary Limit.
2.2 Purpose
(a) The proceeds of the Term A Advances and the Term B Advances shall be
applied in or towards:
(i) payment of the cash price payable by the Parent for the Target
Shares pursuant to the Offer and pursuant to exercise of its
rights under section 204 of the Irish Companies Act, 1963; and/or
(ii) (only after the Unconditional Date) financing or refinancing the
Offer Costs up to $36,000,000.
(b) The proceeds of the Revolving Advances and each Bank Guarantee shall
be used for the working capital requirements of Group Companies
arising after the Unconditional Date provided that such purposes do
not include making any repayment or prepayment of principal amounts of
the Term Advances.
(c) The Ancillary Facilities shall be used for the working capital
requirements of Group Companies arising after the Unconditional Date
(excluding any payment of the purchase price for the Target Shares).
(d) No Finance Party shall be obliged to enquire about, or be responsible
for, the use or application of amounts borrowed under this agreement.
2.3 Parent as Obligors' agent
Each Obligor irrevocably appoints the Parent as its agent for the purpose
of:
(a) executing and delivering on its behalf any Accession Document and any
other agreement or document capable of being entered into by that
Obligor under or in connection with the Senior Finance Documents;
(b) giving and receiving any notice or instruction under or in connection
with any Senior Finance Document (including any Drawdown Request); and
(c) agreeing and executing all consents, agreements and amendments
(however fundamental and notwithstanding any increase in obligations
of or other effect on an Obligor) entered into in connection with the
Senior Finance Documents (including confirmation of continuation of
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guarantee obligations in connection with any amendment or consent in
relation to the Facilities).
3. PARTICIPATION OF LENDERS
3.1 Basis of participation
Subject to the other provisions of this agreement:
(a) each relevant Term Lender will participate in each Drawing of the Term
Facilities in the proportion which its Commitment in relation to the
relevant Term Facility bears to the total Commitments in relation to
the relevant Term Facility as at the relevant Drawdown Date;
(b) each Revolving Lender will participate in each Drawing of the
Revolving Facility (in the case of a Bank Guarantee by way of
indemnity in favour of the relevant Issuing Lender under clause 7.4(b)
(Indemnities)) in the proportion which its Available Commitment bears
to the Total Available Commitments as at the relevant Drawdown Date.
3.2 Lending Office
(a) Each Lender will participate in each Drawing through its Lending
Office.
(b) If any Lender changes its Lending Office for the purpose of the
Facilities, that Lender will, as soon as reasonably practicable after
that change, notify it to the Facility Agent and the Parent and, until
it does so, the Agents and the Parent will be entitled to assume that
no such change has taken place.
3.3 Rights and obligations of Finance Parties
(a) The rights and obligations of each of the Finance Parties under the
Senior Finance Documents are several. The failure by a Finance Party
to comply with its obligations under any Senior Finance Document shall
not:
(i) result in any other Finance Party incurring any liability; or
(ii) relieve any Obligor or any other Finance Party from its
obligations under the Senior Finance Documents.
(b) Subject to the other provisions of the Senior Finance Documents, each
Finance Party has the right to protect and enforce its rights arising
out of the Senior Finance Documents and it will not be necessary for
any other Finance Party to be joined as an additional party in any
proceedings brought for the purpose of protecting or enforcing those
rights.
3.4 Syndication
(a) The Facilities are being made available by the Lenders with the
intention (but not the obligation) that the Joint Mandated Lead
Arrangers should co-ordinate primary syndication. Each Obligor
undertakes to assist and co-operate with the Joint Mandated Lead
Arrangers in syndication in such a manner and to such an extent as the
Joint Mandated Lead Arrangers may reasonably request, including by:
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(i) the preparation, review and approval of a syndication information
memorandum (the "Syndication Memorandum") in relation to the
Group and the business, trading, prospects, financial condition,
assets and liabilities of the Group as a whole and of each Group
Company;
(ii) participating in presentations to potential Lenders concerning
the activities of the Group as a whole and of each Group Company;
and
(iii)selecting Interest Periods in relation to Advances no longer than
one month in relation to all Advances made on or before the date
falling four months after the first Drawdown Date.
(b) Before the Syndication Date, no Lender may assign, transfer,
sub-participate, sub-contract or deliver a Transfer Certificate in
relation to all or any part of its rights or obligations under any
Senior Finance Document without the prior consent of the Facility
Agent.
4. CONDITIONS PRECEDENT
4.1 Initial conditions precedent
The Lenders shall not be under any obligation to make any Drawing available
to any Borrower unless:
(a) on or before the date of this agreement, the Facility Agent has
received each of the documents, information and/or other items
specified in part 1 of schedule 4 in form and substance satisfactory
to the Facility Agent (acting reasonably); and
(b) on or before the first Drawdown Date, the Facility Agent has received
each of the documents, information and/or other items specified in
part 2 of schedule 4 (or the Facility Agent is satisfied that, subject
only to the making of the first Advances under this agreement it will
receive such documents, information and/or other items) in form and
substance satisfactory to the Facility Agent (acting reasonably); and
(c) subject to clause 4.5 (Certain Funds Period), the conditions set out
in clause 4.3 (Additional conditions precedent) have been fulfilled.
The Facility Agent will promptly notify the Parent and the Lenders when the
conditions in clause 4.1(a) or clause 4.1(b), as the case may be, are
satisfied.
4.2 Failure to satisfy conditions precedent
Except as the Facility Agent (acting on the instructions of all the
Lenders) agrees otherwise, if the conditions referred to in clause 4.1
(Initial conditions precedent) have not been fulfilled or waived in writing
on or before the last day of the Availability Period for the Term
Facilities:
(a) all the Commitments will automatically be cancelled; and
(b) the Lenders will cease to have any obligation to make any Drawing
available.
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4.3 Additional conditions precedent
Subject to clause 4.4 (Rollover Advances) and clause 4.5 (Certain Funds
Period), the obligations of the Lenders to make any Drawing available are
subject to the further conditions precedent that, on both the date of the
relevant Drawdown Request and the relevant Drawdown Date:
(a) no Default has occurred and is continuing or will occur as a result of
making that Drawing; and
(b) the representations and warranties set out in clause 19
(Representations and warranties) which are made or repeated on those
dates are true and accurate by reference to the facts and
circumstances then subsisting and will remain true and accurate
immediately after that Drawing is made.
4.4 Rollover Advances
If in relation to a Revolving Advance (the "new Revolving Advance"):
(a) any of the conditions specified in clause 4.3 (Additional conditions
precedent) is not satisfied on the Drawdown Date for the new Revolving
Advance;
(b) the amount of the new Revolving Advance does not exceed the amount of
an existing Revolving Advance (the "existing Revolving Advance") which
is due to be repaid on the Drawdown Date of the new Revolving Advance;
and
(c) the proceeds of the new Revolving Advance are applied in repaying the
existing Revolving Advance,
then, unless any notice is then outstanding under clause 21.2 (Cancellation
and repayment) or any Event of Default has occurred pursuant to clauses
21.1(e) (Insolvency) to 21.1(j) (Suspension of Payments) (inclusive) has
occurred and is continuing, the Lenders may not refuse to advance the new
Revolving Advance by reason of the conditions specified in clause 4.3
(Additional conditions precedent) not being satisfied.
4.5 Certain Funds Period
During the Certain Funds Period neither the Facility Agent nor any of the
Lenders will:
(a) invoke any conditions set out in clause 4.3 (Additional conditions
precedent) or otherwise as a ground for refusing to make any Advance
during the Certain Funds Period to the extent it is to be applied
solely for the purpose specified in clause 2.2(a)(i) or (ii) (an
"Offer Utilisation");
(b) exercise any right, power or discretion to terminate or cancel the
obligation to make any Offer Utilisation (other than under clause 15.2
(Illegality));
(c) exercise any right of rescission which it or they may have in respect
of this agreement or in respect of any Offer Utilisation; or
(d) exercise any rights conferred on them by any Senior Finance Document
to take any action to recover monies advanced to the Parent solely for
the purpose specified in clause 2.2(a)(i) or (ii) and not yet applied
for such purpose,
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unless a Drawstop Default has occurred.
4.6 Revolving Advances
It is a further condition precedent to any Drawing of the Revolving
Facility that the aggregate amount outstanding under the Revolving Facility
and the amount of Financial Indebtedness outstanding under all other
working capital facilities of the Group (excluding the Excluded Facilities)
overall shall not exceed $25,000,000.
5. DRAWDOWN PROCEDURES
5.1 Delivery of Drawdown Requests
In order to utilise a Facility, the relevant Borrower must deliver to the
Facility Agent a duly completed Drawdown Request not later than 10.00 am
three Business Days before the proposed Drawdown Date.
5.2 Content of Drawdown Requests
Each Drawdown Request delivered to the Facility Agent must be in the
applicable form set out in schedule 5 and must specify (or attach, as
appropriate) the following:
(a) which Facility is to be utilised;
(b) the identity of the Borrower;
(c) the proposed Drawdown Date, which must be a Business Day during the
relevant Availability Period;
(d) if the Drawing is by way of Advance, the amount and currency of that
Advance, which must:
(i) in the case of a Term A Advance in Dollars, be equal to or less
than the undrawn Commitments for the Term A Facility or in the
case of a Drawing in an Euros under the Term A Facility the
Dollar Equivalent of the Drawing must be equal to or less than
the undrawn Commitments for the Term A Facility and in each case
if less, a minimum of $750,000 and an integral multiple of
$250,000;
(ii) in the case of a Term B Advance in Dollars, be equal to or less
than the undrawn Commitments for the Term B Facility or in the
case of a Drawing in an Euros under the Term B Facility the
$250,000 Equivalent of the Drawing must be equal to or less than
the undrawn Commitments for the Term B Facility and in each case
if less, a minimum of $750,000 and an integral multiple of
$250,000;
(e) if the Drawing is by way of an Advance, the duration of the Interest
Period applicable to the Revolving Advance or the first Interest
Period applicable to the relevant Term Advance (as the case may be),
which must comply with clause 9 (Selection of Interest Periods);
(f) if the Drawing is by way of an Advance, details of the payee and the
account to which the proceeds of the Drawing are to be paid;
(g) if the Drawing is by way of a Bank Guarantee:
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(i) the amount and currency of that Bank Guarantee, which must be in
an Original Dollar Amount equal to or less than the Total
Available Commitments and if less a minimum of $100,000 (or its
equivalent in an Optional Currency);
(ii) the Beneficiary of that Bank Guarantee;
(iii)the expiry date of that Bank Guarantee, which must be a date on
or before the Revolving Facility Repayment Date;
(iv) the obligation to which the issue of that Bank Guarantee relates;
(v) the execution copy of the Bank Guarantee to be issued; and
(vi) the Drawdown Date, which must be a Business Day at least 3
Business Days after the date of the Drawdown Request.
5.3 Requests irrevocable
A Drawdown Request once given may not be withdrawn or revoked.
5.4 Number and frequency of requests
(a) No more than five Term Advances may be outstanding at any one time.
(b) If two or more Term Advances at any time have Interest Periods ending
on the same date and are in the same currency, they shall be deemed
amalgamated into one Term Advance on the last day of that Interest
Period.
(c) No more than one Drawing of the Revolving Facility may be requested in
any period of three consecutive Business Days and no more than five
Drawings of the Revolving Facility (or any higher number of Drawings
agreed by the Facility Agent) may be outstanding at any one time.
However, if five Revolving Advances have been borrowed but amounts
remain undrawn under the Revolving Facility, a further Revolving
Advance may be drawn provided it is drawn down on the first day of a
Interest Period applicable to an existing Revolving Advance or on the
Repayment Date for an existing Revolving Advance which is being
rolled-over. Forthwith on drawdown the new Revolving Advance will be
consolidated with the existing Revolving Advance and they will for all
purposes then be treated as a single Revolving Advance.
(d) No Revolving Advance may be borrowed unless all the Term Advances
specified in clauses 2.1(a) and (b) (Facilities) have been, or are
being, advanced in full on or before the proposed Drawdown Date of the
relevant Revolving Advance.
5.5 Notice to the Lenders of a proposed Drawing
The Facility Agent will promptly give each Lender details of each Drawdown
Request received and of the amount of that Lender's participation in the
Drawing referred to in that Drawdown Request.
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5.6 Making of Advances
Subject to the provisions of this agreement, each Lender will make
available to the Facility Agent its participation in the relevant Advance
on the relevant Drawdown Date.
5.7 Issue of Bank Guarantees
Subject to the provisions of this agreement (including satisfaction of all
applicable conditions precedent), the relevant Issuing Lender will issue
the relevant Bank Guarantee requested by the relevant Borrower by delivery
of that Bank Guarantee to the relevant Beneficiary on the relevant Drawdown
Date. A Bank Guarantee may be requested by a Borrower for the use by or
benefit of a Group Company which is not a Borrower provided that such Group
Company which is a Borrower shall be liable in accordance with this
agreement in respect of that Bank Guarantee as if it had been issued for
its own use and benefit.
5.8 Expiry
No Drawing of the Revolving Facility will be permitted which gives rise to
an actual or contingent liability of the relevant Borrower to any Lender
which may mature after or otherwise extend beyond the Revolving Facility
Repayment Date.
5.9 Automatic cancellation
Any part of the Commitments undrawn by 2.30pm on the last day of the
relevant Availability Period will be automatically cancelled.
5.10 Optional Currency availability
If a Borrower requests a Drawing denominated in an Optional Currency and,
before 10.00 am on the Rate Fixing Day for that Drawing, the Facility Agent
receives notice from a Lender (an "Affected Lender") that:
(a) the Optional Currency requested is not readily available to it in the
amount required; or
(b) compliance with its obligation to participate in a Drawing in the
Optional Currency requested would contravene a law or regulation
applicable to that Affected Lender, then:
(i) the Facility Agent will notify the relevant Borrower to that
effect by 12.00 am (noon) on that Rate Fixing Day;
(ii) following any such notification the relevant Borrower may notify
the Facility Agent by 2.00pm on that Rate Fixing Day that it no
longer requires that Drawing to be made;
(iii)if the Facility Agent does not receive notification under clause
5.10(b)(ii), the relevant Borrower and the Facility Agent shall
agree to adjust the amount of the Drawing to exclude the
participation of the Affected Lender; and
(iv) in the case of a Drawing by way of Advance, the Affected Lender
shall make a separate Revolving Advance in Dollars in an amount
equal to the Dollar Equivalent of the Affected Lender's proposed
participation in the Advance requested.
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5.11 Optional Currency fluctuations
(a) The Facility Agent shall, if so requested by the Majority Lenders:
(i) calculate the aggregate Dollar Equivalent of all outstanding
Drawings under the Term Facilities and Revolving Facility as at
the end of the Accounting Quarter in which that request was made
(or on any other date reasonably requested by the Majority
Lenders); and
(ii) if the amount calculated under clause 5.11(a)(i) exceeds the
aggregate Term A Commitments, Term B Commitments or Revolving
Commitments (as reduced in the case of the Revolving Commitments
by the aggregate Ancillary Limits of all the Revolving Lenders)
by more than five per cent., notify the Parent to that effect.
(b) Within five Business Days of any notification under clause
5.11(a)(ii), the Parent shall prepay (or procure the prepayment of)
Drawings under the relevant Facility so as to reduce the aggregate
Dollar Equivalent of all outstandings under each such Facility to an
amount not exceeding the aggregate Term A Commitments, Term B
Commitments or Revolving Commitments (as reduced by the aggregate
Ancillary Limits of all the Revolving Lenders) (as the case may be).
6. ANCILLARY FACILITIES
6.1 Provision of Ancillary Facilities
(a) The Parent may, at any time during the Availability Period for the
Revolving Facility, notify the Facility Agent that a Borrower proposes
to establish Ancillary Facilities with an Ancillary Lender. The notice
must specify:
(i) the Revolving Lender which has agreed to make those Ancillary
Facilities available;
(ii) the date from which those Ancillary Facilities will be available
(which must be at least ten Business Days after the date on which
the Facility Agent receives that notice) (the "Effective Date");
(iii)the expiry date of those Ancillary Facilities (which must be a
Business Day on or before the Revolving Facility Repayment Date);
(iv) the type of those Ancillary Facilities;
(v) the Ancillary Limit for those Ancillary Facilities; and
(vi) any other details relating to those Ancillary Facilities which
the Facility Agent reasonably requires.
(b) The Facility Agent shall notify each Lender as soon as reasonably
practicable after it receives any such notice.
(c) Any Revolving Lender which has agreed to make Ancillary Facilities
available shall, with effect from the Effective Date, become an
Ancillary Lender and, subject to the terms of this
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clause 6, be authorised to make available the Ancillary Facilities
specified in the relevant notice referred to in clause 6.1(a).
6.2 Limitations on Ancillary Facilities
(a) The aggregate of the Revolving Advances, the total Contingent
Liabilities in relation to Bank Guarantees and the total Ancillary
Outstandings at any time may not exceed the aggregate Revolving
Commitments.
(b) The Ancillary Outstandings owing to an Ancillary Lender may not at any
time exceed the Ancillary Limit of that Ancillary Lender.
(c) If the Ancillary Limit of an Ancillary Lender would exceed its
Revolving Commitment, it may reduce that Ancillary Limit by an amount
equal to the excess and require the Borrowers to prepay the Ancillary
Outstandings in the amount necessary to procure that the Ancillary
Outstandings do not exceed that Ancillary Limit.
6.3 Terms of Ancillary Facilities
The terms on which Ancillary Facilities are made available shall be as set
out in the relevant Ancillary Facility Letter. Each Ancillary Facility
Letter shall be in a form approved by the Facility Agent (that approval not
to be unreasonably withheld or delayed if that Ancillary Facility Letter
complies with the requirements of the Senior Finance Documents).
6.4 Fees
No Ancillary Lender shall charge fees in relation to Ancillary Facilities
any greater than:
(a) a margin over cost of funds or base rate on any funded drawings under
the Ancillary Facilities equal to the Margin applicable to the
Revolving Facility;
(b) a fee on the contingent liability of the Ancillary Lender in relation
to any instrument giving rise to a contingent liability of the
Ancillary Lender to any person other than the Borrower for whose
account it was issued equal to the commission payable under clause
16.4 (Bank Guarantee commission); and
(c) usual bank charges and expenses payable in connection with the
provision of the Ancillary Facilities, as agreed between the Parent
and the relevant Ancillary Lender.
6.5 Default
If an Event of Default is outstanding, an Ancillary Lender may (but, before
notice is served under clause 21.2 (Cancellation and repayment), only if so
instructed by the Facility Agent) and will, if so instructed by the
Majority Lenders:
(a) terminate the availability of the Ancillary Facilities made available
by it; and/or
(b) declare all amounts outstanding under the Ancillary Facilities made
available by it to be immediately due and payable; and/or
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(c) require the provision of cash cover in an amount equal to the
aggregate contingent liability of that Ancillary Lender under all
instruments issued under the relevant Ancillary Facility Letter which
give rise to a contingent liability of that Ancillary Lender to any
person other than the Borrower for whose account the relevant
instrument was issued; and/or
(d) terminate any hedging agreement entered into by that Ancillary Lender
under the terms of the Ancillary Facilities made available by it.
7. DEMANDS UNDER BANK GUARANTEES
7.1 Demands
Each Issuing Lender shall, as soon as reasonably practicable after receipt
by it of any demand under any Bank Guarantee, notify the Facility Agent of
the amount of that demand and the Facility Agent, as soon as reasonably
practicable after receipt of any such notice, shall notify the Parent, the
Borrower at whose request that Bank Guarantee was issued (the "Account
Party") and the Revolving Lenders.
7.2 Payments
(a) The Account Party shall, immediately after receipt of any notice from
the Facility Agent under clause 7.1 (Demands), pay to the Facility
Agent (for the account of the relevant Issuing Lender) the amount
demanded from that Issuing Lender (as notified to the Facility Agent
under clause 7.1 (Demands)), less any amount standing to the credit of
any Cash Collateral Account which has been paid to the credit of that
Cash Collateral account to provide cash cover in relation to the Bank
Guarantee under which the relevant Issuing Lender has received demand
(a "Relevant Credit").
(b) The Facility Agent shall pay to the relevant Issuing Lender any amount
received by it from the Account Party under clause 7.2(a), together
with any Relevant Credit.
(c) The Facility Agent is irrevocably authorised by the Account Party,
following a demand under any Bank Guarantee, to apply any Relevant
Credit in satisfaction of the Account Party's obligations in relation
to that Bank Guarantee.
7.3 Authority to pay
The Account Party irrevocably authorises each Issuing Lender to pay
(without investigation or confirmation by it) any demand which appears on
its face to be validly made under any Bank Guarantee issued by that Issuing
Lender and agrees that, as between itself, the relevant Issuing Lender and
the Lenders, that demand (in the absence of manifest error by the
Beneficiary) shall be conclusive evidence that the demand has been properly
made.
7.4 Indemnities
(a) The Account Party irrevocably and unconditionally agrees to indemnify
each Issuing Lender on demand against all losses which may be suffered
or incurred by that Issuing Lender under or in connection with any
Bank Guarantee.
(b) Without prejudice to the Account Party's obligations under clause
7.4(a), each Revolving Lender irrevocably, unconditionally and
severally agrees to pay to each Issuing Lender on demand an amount
equal to its proportion of the amount which that Issuing Lender has
paid
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under the relevant Bank Guarantee less the amount recovered from the
Account Party under clause 7.4(a). No Revolving Lender is liable under
this clause 7.4(b) for a Bank Guarantee (unless the relevant Revolving
Lender fails to pay the relevant Issuing Lender on demand, in which
event it will compensate that Issuing Lender for all losses it suffers
as a result of that failure).
(c) The Account Party irrevocably and unconditionally agrees to pay to
each Revolving Lender on demand an amount equal to all payments by
that Revolving Lender under clause 7.4(b) and to indemnify that
Revolving Lender against all other losses which may be suffered or
incurred by that Revolving Lender under or in connection with its
obligations under clause 7.4(b).
7.5 Interest
The Account Party shall pay interest on all amounts paid by an Issuing
Lender under or in connection with any Bank Guarantee or by any Lender
under clause 7.4(b) (Indemnities) from (and including) the date of payment
by that Issuing Lender or that Lender up to (and including) the date of
payment, calculated and payable in accordance with clause 8.4 (Default
interest).
7.6 Continuing indemnity
(a) The indemnities contained in clause 7.4 (Indemnities) (the
"Indemnities"):
(i) are a continuing security and will remain in full force and
effect until all the amounts to which the Indemnities are
expressed to relate have been paid in full; and
(ii) are in addition to and are not in any way prejudiced by any other
security now or subsequently held by any person.
(b) Any settlement or discharge of any claim under any of the Indemnities
shall be conditional on no payment made under the Indemnities being
avoided or set aside or ordered to be refunded by virtue of any
provision of any enactment relating to bankruptcy, insolvency or
liquidation.
7.7 No discharge
The Indemnities shall not be discharged, diminished or in any way adversely
affected as a result of any of the following (whether or not known to any
Obligor or Finance Party):
(a) any time or waiver given to, or composition made with, any Obligor or
any other person;
(b) any amendment to, or replacement of, any Senior Finance Document
(however fundamental), or any other agreement or security;
(c) the taking, variation, compromise, renewal, release or refusal or
neglect to perfect or enforce any right, remedies or security against
any Obligor or any other person;
(d) any purported obligation of any Obligor or any other person to any
Finance Party (or any security for that obligation) becoming wholly or
partly void, invalid, illegal or unenforceable for any reason;
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(e) any incapacity, lack of power, authority or legal personality or any
change in the constitution of, or any amalgamation, consolidation or
reconstruction of, any Obligor, Finance Party or other person;
(f) any Obligor or other person becoming insolvent, going into
receivership or liquidation, having an administrator appointed or
becoming subject to any other procedure for the suspension of payments
to or protection of creditors; or
(g) any other act, omission, circumstance, matter or thing which, but for
this provision, might operate to impair the Indemnities.
7.8 No subrogation
No Obligor shall, by virtue of any payment made under the Indemnities,
claim any right of subrogation, contribution or indemnity against any
person for so long as any amount remains payable or capable of becoming
payable under any Senior Finance Document.
8. INTEREST
8.1 Rate
The rate of interest on each Advance for each of its Interest Periods is
the rate per annum determined by the Facility Agent to be the aggregate of:
(a) the Margin for that Advance;
(b) EURIBOR (in the case of an Advance denominated in Euro or National
Currency Units) or LIBOR (in the case of any other Advance) for that
Advance during that Interest Period;
(c) the Mandatory Cost (if any) for that Advance during that Interest
Period; and
(d) to the extent clause 8.7 (Margin increase) is applicable, the Margin
Addition.
8.2 Calculation
Interest will accrue daily from and including the first day of an Interest
Period and be calculated on the basis of a 365 day year in relation to any
Advance in Sterling (or any other currency where market practice so
requires) and a 360 day year in any other case.
8.3 Payment
Each Borrower will pay interest accrued on each Advance made to it to the
Facility Agent (for the account of the Lenders) in arrear on the last day
of each Interest Period for that Advance and also, where that Interest
Period is longer than six months, on the last day of each consecutive
period of six months from (and including) the first day of that Interest
Period.
8.4 Default interest
If an Obligor fails to pay any amount under any Senior Finance Document on
its due date (including any amount payable under this clause 8.4) (an
"overdue amount"), that Obligor will pay default interest on that overdue
amount from its due date to the date of actual payment (both before and
after
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judgment) at a rate (the "Default Rate") determined by the Facility Agent
to be one per cent. per annum above:
(a) where the overdue amount is principal which has become due and payable
before the expiry of the relevant Interest Period, the rate applicable
to that principal immediately before the date it fell due (but only
for the period from that due date to the end of the relevant Interest
Period); or
(b) in any other case (including principal falling within clause 8.4(a)
once the relevant Interest Period has expired), the rate which would
be payable if the overdue amount was an Advance made for a period
equal to the period of non-payment divided into successive Interest
Periods of a duration selected by the Facility Agent (each a "Default
Interest Period").
For the purposes of determining the rate of interest on an overdue amount
under this clause 8.4, the Margin will be:
(i) if that amount comprises principal or interest or any other amount due
in relation to a Facility, the Margin relating to that Facility; or
(ii) if that amount is not properly attributable to a Facility, the Margin
under the Term B Facility.
8.5 Compounding
Default interest will be payable on demand by the Facility Agent and will
be compounded at the end of each Default Interest Period.
8.6 Margin adjustment:
(a) Subject to clause 8.2 and clauses 8.6(b) to (d) (inclusive), if at any
time on or after the first anniversary of the Completion Date the
Quarterly Accounts for the four most recently preceding Accounting
Quarters show that, for the period comprising those four Accounting
Quarters, the ratio of Senior Debt on each date specified in Column 1
below to EBITA for the four Accounting Quarters ending on that date is
less than the ratio shown in the table below against the last date of
that period, then the Margin applicable to the Term A Facility and the
Revolving Facility shall be reduced by 0.25% per annum.
(1) (2)
Quarter end date Ratio
31 March 2004 1.99:1
30 June 2004 1.66:1
30 September 2004 1.69:1
31 December 2004 1.58:1
31 March 2005 1.54:1
30 June 2005 1.38:1
30 September 2005 1.33:1
31 December 2005 1.12:1
31 March 2006 1.12:1
30 June 2006 1.12:1
30 September 2006 1.12:1
31 December 2006 1.12:1
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(1) (2)
Quarter end date Ratio
31 March, 30 June, 30 1.12:1
September and 31 December
in each year thereafter
(b) Any reduction in the Margin under clause 8.6(a) shall take effect on
the first day of the first Interest Period occurring after the date on
which the Facility Agent has received the Quarterly Accounts for the
Accounting Quarter ending on the last day of the 12 month period
referred to in clause 8.6(a) (together with the corresponding
Compliance Certificates) until (but excluding) the date (a
"Readjustment Date") which is the earlier of:
(i) the date on which the Facility Agent receives the Quarterly
Accounts for the immediately following Accounting Quarter
(together with the corresponding Compliance Certificate); and
(ii) the latest date by which the Facility Agent should have received
the Quarterly Accounts referred to in clause 8.6(e)(i) under
clause 20.10(c)(ii)(A) (financial statements),
and, on each Readjustment Date, the Margin applicable to the Term A
Facility and the Revolving Facility shall return to 2.50 per cent. per
annum, unless either (A) it is reduced under the terms of clause
8.6(a), or (B) it would have been reduced under clause 8.6(a) but for
the operation of clause 8.6(c).
(c) No reduction to the Margin applicable to each Facility may be made
under this clause 8.6 if such reduction would result in the Margin
being less than 2.00 per cent. per annum.
(d) No decrease in the Margin shall take effect if an Event of Default is
outstanding. If an Event of Default occurs, the Margin applicable to
the Term A Facility and the Revolving Facility shall immediately
return to (if it is not already) 2.50 per cent. per annum, until the
time when no Default is outstanding, (when the Margin will again be
determined in accordance with this clause 8.6).
(e) If:
(i) the Margin is:
(A) decreased or increased in accordance with this clause 8.6 by
reference to Quarterly Accounts; or
(B) Quarterly Accounts indicate that no change in the Margin is
required; and
(ii) subsequent Annual Accounts shown that the Margin should have been
higher or lower than the level shown by those Quarterly Account,
then:
(A) where the subsequent Annual Accounts show that the Margin
should have been higher than the level shown by those
Quarterly Accounts, the Parent shall, promptly following
demand by the Facility Agent, pay (or procure that the
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Borrowers pay) to the Facility Agent for the account of the
Lenders the additional amount which would have been payable
by the Borrowers if the Margin had been increased to the
correct level during the relevant periods as shown by the
relevant Annual Accounts; and
(B) where the subsequent Annual Accounts show that the Margin
should have been lower than the level shown by those
Quarterly Accounts, then the Margin shall reduce with
immediate effect in respect of interest accrued but unpaid
in the first Interest Period occurring after receipt of such
Quarterly Accounts up to a maximum accrual period of 3
months.
The Facility Agent's determination of any adjustments payable
under this clause 8.6(e) shall, except in the case of the
manifest error, be conclusive.
8.7 Margin Increase
If, on the date falling 180 days after the Unconditional Date any member of
the Target Group incorporated in the Republic of Ireland and named in
Schedule 9 has failed to execute a Guarantee Increase Deed or any Security
Document set out in schedule 9 to be executed by such member of the Target
Group or has failed to enter into the Financial Assistance Documents or
otherwise comply with the provisions of section 60 of the Irish Companies
Act, 1963 in all respects in relation to such Security Documents, the rate
of interest applicable to each Facility shall increase by the rate equal to
the Margin Addition as set out in clause 8.1(d)(Rate).
8.8 Notification
The Facility Agent will notify the Parent and the Lenders of each
determination of an interest rate (including a default rate) and each
selection of a Default Interest Period under this clause 8 as soon as
reasonably practicable after any such determination or selection is made.
9. SELECTION OF INTEREST PERIODS
9.1 Term Facilities
(a) Subject to the provisions of this agreement, each Interest Period for
a Term Advance shall be one, three or six months as notified by the
relevant Borrower to the Facility Agent no later than 10.00 am three
Business Days before the start of that Interest Period (or any other
period which the Facility Agent may agree).
(b) The first Interest Period for a Term Advance will start on its
Drawdown Date and each subsequent Interest Period for that Term
Advance will start on the last day of the immediately preceding
Interest Period for that Term Advance.
(c) Each relevant Borrower will select Interest Periods for a Term Advance
so that each Repayment Date for that Term Advance will fall on the
last day of an Interest Period and, for this purpose, that Borrower
may split any Term Advance into two separate Term Advances one of
which shall (if applicable) be in an amount at least equal to the
amount of the instalment due on the next following Repayment Date
relating to that Term Advance and will have an Interest Period
expiring on that Repayment Date.
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(d) If a Borrower fails to select an Interest Period then, save as
provided in this clause 9, it will be deemed to have selected a period
of three months or any shorter period which is necessary to comply
with the requirements of clause 9.1(c).
9.2 Revolving Facility
Subject to clause 3.4(a)(iii) (Syndication) and the other provisions of
this agreement, the Interest Period for each Revolving Advance shall be
one, three or six months, as selected by the relevant Borrower in the
relevant Drawdown Request (or any other period which the Facility Agent may
agree).
9.3 Non-Business Days
If any Interest Period would, but for this clause 9.3, end on a day which
is not a Business Day, that Interest Period shall be extended to (and the
Maturity Date in the case of a Revolving Advance shall be) the immediately
following Business Day, unless the result of that extension would be to
carry that Interest Period into another calendar month, in which case that
Interest Period shall end on (and that Maturity Date shall be) the
immediately preceding Business Day.
10. MARKET DISRUPTION
10.1 Market Disruption Notice
If, in relation to any Advance (an "Affected Advance"):
(a) the Facility Agent determines that, by reason of circumstances
affecting the applicable interbank market generally, adequate and fair
means do not or will not exist for ascertaining LIBOR or EURIBOR (as
the case may be) applicable to that Affected Advance for an Interest
Period; or
(b) Lenders whose participations in that Affected Advance exceed 33 per
cent. of the amount of that Affected Advance notify the Facility Agent
that deposits will not be available to them in the London Interbank
Market in order to fund their participations in that Affected Advance
for an Interest Period or that (other than due to the credit rating of
the relevant Lender or Lenders) their cost of obtaining deposits in
order to fund their participations in that Affected Advance for an
Interest Period would exceed LIBOR or EURIBOR (as the case may be),
the Facility Agent will give notice of that event to the Parent and the
Lenders (a "Market Disruption Notice").
10.2 Substitute basis
During the 30 days following the giving of a Market Disruption Notice, the
Facility Agent and the Parent will negotiate in good faith in order to
agree on a mutually acceptable substitute basis for calculating the
interest payable on the relevant Affected Advance. If a substitute basis is
agreed within that period, then it shall apply in accordance with its terms
(and may be retrospective to the beginning of the relevant Interest
Period). The Facility Agent will not agree a substitute basis under this
clause 10.2 without first obtaining the approval of the Lenders.
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10.3 Cost of funds
Unless and until a substitute basis is agreed under clause 10.2 (Substitute
basis), the interest payable on each Lender's participation in the relevant
Affected Advance for the relevant Interest Period will be the rate
certified by that Lender to be its cost of funds (from any source which it
may reasonably select) plus the applicable Mandatory Cost plus the
applicable Margin.
10.4 Unavailability of Dollars
If, in relation to any proposed Drawing by way of an Advance, Lenders whose
participations in that Advance exceed 33 per cent. of the amount of that
Advance notify the Facility Agent that deposits in Dollars will not be
readily available to them in the London interbank market in order to enable
them to fund their participations in that Advance, the Lenders will not be
obliged to participate in the proposed Drawing and any Drawdown Request
which has been served by the relevant Borrower will be deemed withdrawn.
11. REPAYMENT OF DRAWINGS
11.1 Term Advances
(a) The Parent shall repay the Term A Advances in instalments. Each such
instalment will fall due for repayment on each date specified below.
The amount in total which must be repaid on each such date (the
"Dollar A Instalment Amount") shall be the amount specified opposite
that date, calculated as an Original Dollar Amount. Any balance of the
aggregate outstanding principal amount of the Term A Advances
remaining outstanding on the Term A Final Repayment Date shall be
repaid in full on that date.
The repayment dates and amounts are:
Date Dollar A Instalment
Amount
$
15 October 2003 6,500,000
15 April 2004 7,500,000
15 October 2004 7,500,000
15 April 2005 7,500,000
15 October 2005 11,500,000
15 April 2006 11,500,000
15 October 2006 14,000,000
15 April 2007 14,000,000
-------------------------------
Total 80,000,000
===============================
(b) The Parent shall repay the Term B Advances in instalments. Each such
instalment will fall due for repayment on each date specified below.
The amount in total which must be repaid on each such date (the
"Dollar B Instalment Amount") and shall be the amount of specified
opposite that date calculated as an Original Dollar Amount. Any
balance of the aggregate outstanding principal amount of the Term B
Advances remaining outstanding on the Term B Final Repayment Date
shall be repaid in full on that date.
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The repayment dates and amounts are:
Date Dollar B Instalment
Amount
$
15 October 2007 17,500,000
15 April 2008 17,500,000
-------------------------------
Total 35,000,000
===============================
(c) No amount repaid in relation to a Term Advance may be redrawn.
11.2 Revolving Advances and Cleandown
(a) Each Borrower of any Revolving Advance shall repay that Advance on its
Maturity Date.
(b) Subject to the provisions of this agreement, any amount repaid under
the Revolving Facility may be redrawn in accordance with clause 5
(Drawdown Procedures).
(c) On the Revolving Facility Repayment Date:
(i) the Revolving Facility will expire and the Revolving Commitment
of each Lender will be reduced to zero; and
(ii) each Borrower will repay or prepay all amounts outstanding and
owed by it in relation to the Revolving Facility (together with
all its Contingent Liabilities).
(d) The Parent shall procure that, for a period of at least ten
consecutive Business Days during each Financial Year, the Original
Dollar Amount of all Revolving Advances and the amount of cash
drawings outstanding under all other working capital facilities of the
Group shall be reduced to zero, provided that where compliance with
the provisions of this clause 11.2(d) in any Financial Year has
occurred in the final calendar month of that Financial Year then any
zero balance in the following calendar month (being the first calendar
month of the next successive Financial Year) shall not satisfy the
provisions of this clause 11.2(d).
12. PREPAYMENT AND CANCELLATION
12.1 Voluntary prepayment:
A Borrower may prepay all or any part of a Term Advance at any time,
provided that:
(a) the Facility Agent has received no less than ten Business Days'
irrevocable notice from the Parent of the proposed date and amount of
the prepayment;
(b) any partial prepayment is in a minimum amount of $500,000 and, if
greater, an integral multiple of $250,000; and
(c) if paid other than on the last day of the Interest Period for that
Term Advance, the relevant Borrower indemnifies the Lenders under
clause 29.1 (General indemnity and breakage costs).
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12.2 Additional right of prepayment
If:
(a) a Borrower is required to pay any additional amount to a Finance Party
under clause 14.1 (Gross up) or clause 14.3 (Indemnity); or
(b) the Parent is required to pay any amount to a Lender under clause 15.1
(Increased costs),
then, without prejudice to the obligations of any Obligor under those
clauses, the Parent may, whilst the circumstances continue, serve a notice
of prepayment and cancellation on that Lender through the Facility Agent.
If the Parent serves any such notice:
(i) on the date which is ten Business Days after the date of service
of the notice, each Borrower shall:
(A) prepay that Lender's participation in all Advances and
Ancillary Outstandings drawn by it together with accrued
interest on those Advances and all other amounts payable to
that Lender under the Senior Finance Documents; and
(B) provide cash cover in accordance with clause 1.4 (Cash
cover) in an amount equal to the total Contingent Liability
(if any) of that Lender in relation to Bank Guarantees and
the total contingent liabilities of that Lender under any
relevant Ancillary Facility; and
(ii) all that Lender's Commitments shall be cancelled and reduced to
zero as at the date of service of the notice.
12.3 Sale, Change of Control and Listing
(a) If a Change of Control, Listing or Sale occurs then (unless the
Majority Lenders otherwise agree in writing):
(i) all of the Lenders' Commitments will immediately be cancelled and
reduced to zero; and
(ii) each Borrower will immediately prepay all Advances drawn by it,
all Bank Guarantees issued for its account and all sums advanced
to it and all contingent liabilities issued for its account under
any Ancillary Facility.
(b) For the purposes of this agreement:
(i) a "Change of Control" will occur:
(A) if the Lead Equity Investors and Xxxxx X'Xxxxxxxxx and
Xxxxxxx XxXxxxxx together:
(x) cease after the date of this agreement to be the legal
and beneficial owners of equity share capital of the
Parent having the right to cast more than 50 per cent.
of the votes capable of being cast in general meetings
of the Parent; or
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(y) cease after the date of this agreement to have the
right to determine the composition of a majority of the
board of directors (or like body) of the Parent; or
(z) cease after the date of this agreement to have
"control" (as defined in section 839 Income and
Corporation Taxes Act 1988) of the Parent; or
(B) if the Lead Equity Investors cease to hold 50 per cent. of
the equity share capital of the Parent held by them as at
the Completion Date or of the equity share capital having
the right to cast more than 50 per cent. of the votes
capable of being cast in general meetings of the Parent held
by them as at the Completion Date; or
(C) if Xxxxx X'Xxxxxxxxx ceases to hold 50 per cent. of the
equity share capital of the Parent held by him as at the
Completion Date or of the equity share capital having the
right to cast more than 50 per cent. of the votes capable of
being cast in general meetings of the Parent held by him as
at the Completion Date; or
(D) if Xxxxxxx XxXxxxxx and Lifetime Learning Limited together
cease to hold 50 per cent. of the equity share capital of
the Parent held by them as at the Completion Date or of the
equity share capital having the right to cast more than 50
per cent. of the votes capable of being cast in general
meetings of the Parent held by them as at the Completion
Date;
(ii) "Listing" means
(A) admission to trading of all or any part of the share capital
of any Group Company or any Holding Company of the Parent on
any recognised investment exchange (as defined in the
Financial Services and Markets Act 2000) or any other sale
or issue by way of flotation or public offering or any
equivalent circumstances in relation to any Group Company or
any Holding Company of the Parent in any jurisdiction or
country;
(B) the raising of funds by any Group Company or any Holding
Company of the Parent (excluding the Original Equity
Investors) in the national or international equity markets
(by way of IPO, private placement of new shares, public
offering or otherwise); and
(iii)"Sale" means a disposal (whether in a single transaction or a
series of related transactions) of all or substantially all of
the assets of the Group or any Holding Company of the Parent.
12.4 Asset disposals
(a) The Parent shall procure that an amount equal to the Net Proceeds of a
disposal of any asset by a Group Company (including for the avoidance
of doubt any licence of any Intellectual Property) (other than a
disposal permitted by clause 20.3(a)(i) and (iii) to (v) (inclusive)
(Disposals)) is applied in prepayment of the Facilities (subject to
clause 12.4(b) and (c)).
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(b) Subject to clause 12.4(c) below, Net Proceeds need not be so applied
if:
(i) such Net Proceeds are received in consideration for the grant of
any licence of any Intellectual Property, provided the
requirements of clause 12.4(c) are satisfied; or
(ii) within 180 days after receipt they are reinvested in assets of a
similar type and value required for the business of the disposing
Group Company and following receipt and pending that reinvestment
they are held in a Cash Collateral Account.
(c) Net Proceeds received by any member of the Group in consideration for
the grant of any licence of Intellectual Property shall be applied in
prepayment of the Facilities unless either:
(i) the aggregate amount of Net Proceeds received in respect of the
grant of licences of Intellectual Property in the relevant
Financial Year does not exceed the budgeted Net Proceeds from
such granting of licences set out in the Management Financial
Model or in the Operating Budget (as applicable) in respect of
the relevant Financial Year; or
(ii) the adult consumer business, children's consumer business and the
school supplemental business of the Group are each, in the
reasonable opinion of the Joint Mandated Lead Arrangers,
operating in accordance with, or better than, the projections set
out in the Accountants' Report by reference to the Monthly
Accounts most recently delivered in accordance with clause
20.10(c) (Financial statements) provided that for the avoidance
of doubt, any Net Proceeds retained by the Group prior to the
date of the relevant disposal shall be excluded from such
comparison to the extent included in the Monthly Accounts and
provided further that the aggregate amount of Net Disposal
Proceeds retained by the Group in accordance with this clause
12.4(c)(ii) shall not exceed $35,000,000 (or its equivalent) in
any Financial Year,
and, in any event, no Default has occurred and is continuing.
12.5 Insurance claims
(a) Subject to clause 12.5(b), if a Group Company receives any proceeds as
a result of making a claim under an insurance policy (other than
proceeds compensating for loss of profit under business interruption
or similar insurance or compensating for loss of life), the Parent
shall procure that an amount equal to those proceeds (net of any Tax)
must be applied in prepayment of the Facilities.
(b) Any amount received or recovered as a result of making a claim under
an insurance policy need not be so applied if:
(i) within 180 days after receipt it is applied in reinstating,
replacing, repairing or otherwise investing in assets in relation
to which that amount was received or meeting a liability in
relation to which that amount was received; and
(ii) following receipt and pending that application any cumulative
amount in excess of $75,000 is held in a Cash Collateral Account.
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12.6 Excess Cashflow
Within ten Business Days after delivery of the Annual Accounts in relation
to each Financial Year the Parent shall procure that an amount equal to (i)
662/3 per cent. of the amount of Excess Cashflow for that Financial Year
minus (ii) (without double counting) the aggregate amount of prepayments
made in accordance with clause 12.1 (Voluntary prepayments), 12.4 (Asset
Disposals), 12.5 (Insurance claims) and 12.7 (Report claims) and any amount
permitted to be retained by the Group in accordance with those clauses
during (or referable to) that Financial Year, to the extent that the
relevant amounts or proceeds giving rise to the relevant prepayments have
been included in calculating Cashflow is applied in prepayment of the
Facilities provided that:
(a) in relation to the Financial Year ending in 2003 the reference to
662/3 per cent. in (i) above shall be deemed to be a reference to 100
per cent. until an aggregate amount of (pound)6,000,000 has been
prepaid in accordance with this clause 12.6 (Excess Cashflow) and
thereafter shall revert to 662/3 per cent. in respect of any remaining
Excess Cashflow; and
(b) in relation to any Financial Year ending in 2004, the reference to
662/3 per cent. in (i) above shall be deemed to be a reference to 100
per cent. until an aggregate amount of (pound)11,000,000 has been
prepaid in accordance with this clause 12.6 (Excess Cashflow) and
thereafter shall revert to 662/3 per cent. in respect of any remaining
Excess Cashflow; and
(c) in relation to any Financial Year ending after 2004, the reference to
662/3 per cent. in (i) above shall be deemed to be a reference to 100
per cent. until an aggregate amount of (pound)11,000,000 has been
prepaid in accordance with this clause 12.6 (Excess Cashflow) and
thereafter shall be deemed to be a reference to 50 per cent. in
respect of any remaining Excess Cashflow.
12.7 Report Claims
(a) Subject to clause 12.7(b), if a Group Company receives or recovers any
amount in respect of any liability claim against any professional
adviser who prepared any Report, the Parent shall procure that an
amount equal to that amount (net of any Tax) is applied in prepayment
of the Facilities.
(b) Any amount received or recovered in relation to a liability claim
under a Report need not be so applied if:
(i) Within 180 days after receipt it is applied in replacing,
repairing or otherwise investing in assets or meeting liabilities
in relation to which the relevant liability claim was made; and
(ii) Promptly following receipt and pending that application it is
held in a Cash Collateral Account.
12.8 Order of application of prepayments
(a) Any amount to be applied in prepayment of the Facilities under clause
12.1 (Voluntary prepayments), clause 12.4 (Asset disposals), clause
12.5 (Insurance claims), clause 12.6
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(Excess Cash Flow) or 12.7 (Report claims) shall be applied in the
following order, in each case until the relevant Advances or other
liabilities have been satisfied in full:
(i) first, in permanent prepayment of the Term A Advances and the
Term B Advances pro rata to the outstanding amount of those
Advances provided that any Term B Lender may elect not to receive
such prepayment in which case such prepayment shall be applied
against the outstanding Term A Advances;
(ii) second, to the extent any Term B Lender has made an election in
accordance with clause 12.8(a)(i), in permanent prepayment of the
outstanding Term B Advances;
(iii)third, in permanent prepayment on a pro rata basis of Revolving
Advances and cash advances outstanding under the Ancillary
Facilities;
(iv) fourth, in prepaying on a pro rata basis any Contingent Liability
or contingent liability under any Ancillary Facility; and
(v) fifth, in permanent reduction of any undrawn Revolving
Commitments.
(b) If any amount is applied in accordance with clause 12.8(a)(iii) or
(iv) the Revolving Commitments shall immediately be cancelled by that
amount. Any such cancellation shall apply to the Revolving Commitment
of each Revolving Lender on a pro rata basis and that Revolving
Lender's Ancillary Limit, if any, shall be reduced accordingly.
(c) Any prepayment:
(i) made under clause 12.2 (Additional right of prepayment) shall be
applied pro rata against the scheduled instalments set out in
clause 11.1 (Term Advances) under the Term Facilities in which
the relevant Lender was participating; and
(ii) to be applied under this clause 12.8 against Term A Advances or
Term B shall be applied against the relevant scheduled
instalments set out in clause 11.1 (Term Advances) pro rata.
12.9 Prepayments during Interest Periods
Subject to the other provisions of this agreement, any amount required to
be applied in prepayment of the Facilities under clauses 12.4 (Asset
disposals), 12.5 (Insurance claims), 12.6 (Excess Cashflow) or 12.7 (Report
claims) during an Interest Period for that Advance will be paid by the
relevant Borrower into a Cash Collateral Account and applied (together with
any relevant accrued interest) against that Advance on the expiry of that
Interest Period.
12.10 Cancellation of Revolving Facility
The Parent may cancel the Available Commitments in whole or in part (but,
if in part, in a minimum of $500,000 and an integral multiple thereof) at
any time during the Availability Period for the Revolving Facility by
giving no less than ten Business Days irrevocable notice to the Facility
Agent specifying the date and amount of the proposed cancellation and, on
any cancellation of the Available Commitments, the amount of the Revolving
Facility will reduce accordingly. Any such cancellation shall reduce each
Lender's Available Commitment on a pro rata basis and that Revolving
Lender's Ancillary Limit, if any, shall be reduced accordingly.
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12.11 Miscellaneous
(a) Any repayment or prepayment under this agreement must be accompanied
by accrued interest on the amount repaid or prepaid and any other
amount then due under this agreement.
(b) No amount prepaid or cancelled under this clause 12 may be redrawn or
reinstated.
(c) Any notice of prepayment or cancellation given under this agreement
shall be irrevocable and, in the case of notice of prepayment, the
Parent or the Borrower named in that notice shall be obliged to prepay
(or, in the case of the Parent, to procure prepayment) in accordance
with that notice.
(d) No prepayment of a Drawing or cancellation of any Commitment may be
made except in accordance with this agreement or (in relation to an
Ancillary Facility) the relevant Ancillary Facility Letter.
13. PAYMENTS
13.1 By Lenders
(a) On each date on which an Advance is to be made, each Lender shall make
its participation in that Advance available to the Facility Agent on
that date by payment in the currency in which that Advance is
denominated and in immediately available cleared funds to the account
specified by the Facility Agent for that purpose.
(b) The Facility Agent shall make the amounts paid to it available to the
relevant Borrower on the date of receipt by payment in the same
currency as received by the Facility Agent to the account specified by
that Borrower in the notice requesting that Advance. If any Lender
makes its share of any Advance available to the Facility Agent later
than required by clause 13.1(a), the Facility Agent shall make that
share available to the relevant Borrower as soon as practicable after
receipt.
13.2 By Obligors
(a) On each date on which any amount is due from any Obligor under the
Senior Finance Documents, that Obligor shall pay that amount on that
date to the Facility Agent in immediately available cleared funds to
the account specified by the Facility Agent for that purpose.
(b) Each payment under this agreement from an Obligor is to be made in
Dollars, except that:
(i) each repayment or prepayment of an Advance shall be in the
currency in which it was drawn;
(ii) each payment of interest shall be in the same currency as the
amount in relation to which that interest is payable;
(iii)each payment in respect of losses shall be made in the currency
in which the losses were incurred;
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(iv) each payment under clause 14.1 (Gross up) or clause 15.1
(Increased costs) shall be made in the currency specified by the
claiming Finance Party; and
(v) any amount expressed to be payable in a currency other than
Dollars shall be paid in that other currency.
(c) The Facility Agent shall, on the date of receipt, pay to the Finance
Party to which the relevant amount is due its pro rata share (if any)
of any amounts so paid to the Facility Agent in the same currency as
received by the Facility Agent to the account specified by that party
to the Facility Agent. If any amount is paid to the Facility Agent
later than required by clause 13.2(a), the Facility Agent shall make
that party's share available to it as soon as practicable following
receipt.
13.3 Netting of payments
If on any Drawdown Date:
(a) the Revolving Lenders are required to make a Revolving Advance; and
(b) a payment is due to be made by an Obligor to the Facility Agent for
the account of the Revolving Lenders,
the Facility Agent may, without prejudice to the obligation of the relevant
Obligor to make that payment, apply any amount payable by the Revolving
Lenders to that Obligor on that Drawdown Date in relation to the relevant
Revolving Advance in or towards satisfaction of the amounts payable by that
Obligor to the Revolving Lenders on that Drawdown Date.
13.4 Assumed receipt
Where an amount is to be paid under any Senior Finance Document for the
account of another person, the Facility Agent will not be obliged to pay
that amount to that person until it is satisfied that it has actually
received that amount. If the Facility Agent nonetheless pays that amount to
that person and the Facility Agent had not in fact received that amount,
then that person will on request refund that amount to the Facility Agent.
That person will be liable:
(a) to pay to the Facility Agent on demand interest on that amount at the
rate determined by the Facility Agent to be equal to the cost to the
Facility Agent of funding that amount for the period from payment by
the Facility Agent until refund to the Facility Agent of that amount;
and
(b) to indemnify the Facility Agent on demand against any additional loss
it may have incurred by reason of it having paid that amount before
having received it.
13.5 No set-off or deductions
All payments made by an Obligor under the Senior Finance Documents must be
paid in full without set-off or counterclaim and not subject to any
condition and free and clear of and without any deduction or withholding
for or on account of any Taxes (except as provided in clause 14 (Taxes)).
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13.6 Business Days
Subject to clause 9.3 (Non-Business Days), if any amount would otherwise
become due for payment under any Senior Finance Document on a day which is
not a Business Day, that amount shall become due on the immediately
following Business Day and all amounts payable under any Senior Finance
Document calculated by reference to any period of time shall be
recalculated on the basis of that extension of time.
13.7 Change in currency
(a) If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country:
(i) any reference in any Senior Finance Document to, and any
obligations arising under any Senior Finance Document in, the
currency of that country shall be translated into, and paid in,
the currency or currency unit designated by the Facility Agent
(after consultation with the Parent and the Lenders); and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank of that country for the conversion of that currency
or currency unit into the other, rounded up or down by the
Facility Agent (acting reasonably).
(b) If a change in any currency of a country occurs, the Senior Finance
Documents will, to the extent the Facility Agent specifies is
necessary, be amended to comply with any generally accepted
conventions and market practice in any relevant interbank market and
otherwise to reflect the change in currency. The Facility Agent will
notify the other parties to the relevant Senior Finance Documents of
any such amendment, which shall be binding on all the parties to that
Senior Finance Document.
13.8 Application of moneys
If any amount paid or recovered in relation to the liabilities of an
Obligor under any Senior Finance Document is less than the amount then due,
the Facility Agent shall apply that amount against amounts outstanding
under the Senior Finance Documents in the following order:
(a) first, to any unpaid fees and reimbursement of unpaid expenses of the
Agents;
(b) second, to any unpaid fees and reimbursement of unpaid expenses of the
Lenders;
(c) third, to unpaid interest;
(d) fourth, to unpaid principal (including provision of cash cover in
relation to Contingent Liabilities not already cash collateralised);
and
(e) fifth, to other amounts due under the Senior Finance Documents (other
than the Hedging Agreements)
in each case (other than (a)), pro rata to the outstanding amounts owing to
the relevant Finance Parties (other than the Hedging Lenders) under the
Senior Finance Documents taking into account any
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applications under this clause 13.8. Any such application by the Facility
Agent will override any appropriation made by an Obligor.
14. TAXES
14.1 Gross up
If any deduction or withholding for or on account of Taxes or any other
deduction from any payment made or to be made by an Obligor to any Finance
Party or by the Facility Agent to any other Finance Party under any Senior
Finance Document is required by law, then that Obligor will:
(a) ensure that the deduction or withholding does not exceed the minimum
amount legally required;
(b) pay to the relevant Taxation or other authorities within the period
for payment permitted by the applicable law, the amount which is
required to be paid in consequence of the deduction (including the
full amount of any deduction from any additional amount paid under
this clause 14.1);
(c) promptly pay to the relevant Finance Party an additional amount equal
to the amount required to procure that the aggregate net amount
received by that Finance Party will equal the full amount which would
have been received by it if no such deduction or withholding had been
made; and
(d) indemnify each Finance Party against any losses incurred by it by
reason of:
(i) any failure by the relevant Obligor to make any deduction or
withholding; or
(ii) any such additional amount not being paid on the due date for
payment of that amount.
14.2 Exemptions from gross-up
No additional amount will be payable to a Finance Party under clause 14.1
(Gross up) to the extent that the relevant deduction or withholding would
not have arisen if that Finance Party had been a Qualifying Lender at the
time the relevant payment fell due (unless the reason it is not a
Qualifying Lender is the introduction of, or a change in, any law or
regulation, or a change in the interpretation or application of any law or
regulation or in any practice or concession of the Inland Revenue, in each
case occurring after the date of this agreement).
14.3 Indemnity
Without prejudice to clause 14.1 (Gross up), if, as a result of a change in
Tax law or regulation (or an equivalent change having mandatory effect)
occurring after the date of this agreement any Finance Party (or any person
on its behalf) is required to make any payment in relation to Tax (other
than Tax on its overall net income) on or calculated by reference to the
amount of any payment received or receivable by that Finance Party (or any
person on its behalf) under any Senior Finance Document (including under
clause 14.1 (Gross up)) or any liability in relation to any such payment is
assessed, levied, imposed or claimed against any Finance Party (or any
person on its behalf), the Parent shall, on demand by the Facility Agent,
forthwith indemnify that Finance Party (or relevant other person) against
that payment or liability and any losses incurred in connection with that
payment or liability.
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14.4 Filings
(a) If an Obligor is required (or would in the absence of any appropriate
filing be required) to make a deduction or withholding for or on
account of Taxes or any other deduction contemplated by this clause
14, that Obligor and each relevant Finance Party shall promptly file
all forms and documents which the appropriate Tax authority may
reasonably require in order to enable that Obligor to make relevant
payments under the Senior Finance Documents without having to make
that deduction or withholding.
(b) Each Finance Party which is a Qualifying Lender by reason of paragraph
(b) of the definition of "Qualifying Lender" in clause 1.1
(Definitions) shall, as soon as reasonably practicable after request
from the Parent, file with any relevant Tax authority, or provide to
the Parent, any Tax form, declaration or other document which the
Parent has reasonably requested from that Finance Party for the
purpose of enabling payments to be made by the relevant Obligor to
that Finance Party under the Senior Finance Documents without
deduction or withholding.
14.5 Tax credits
If an Obligor pays an additional amount under clause 14.1 (Gross up) and a
Lender, in its sole opinion, receives an off-setting Tax credit or other
similar Tax benefit arising out of that payment, that Lender shall
reimburse to the relevant Obligor the amount which that Lender determines,
in its sole opinion, is attributable to the relevant deduction, withholding
or payment and will leave it in no better or worse position in relation to
its worldwide Tax liabilities than it would have been in if the payment of
that additional amount had not been required, to the extent that that
Lender, in its sole opinion, can do so without prejudice to the retention
of the amount of that credit or benefit and without any other adverse Tax
consequences for it. Any such reimbursement shall be conclusive evidence of
the amount due to that Obligor and shall be accepted by that Obligor in
full and final settlement of any claim for reimbursement under this clause
14.5.
14.6 Tax credit recovery
If, following any reimbursement by a Lender under clause 14.5 (Tax
credits), that Lender is required to relinquish or surrender any credit or
benefit or suffers an adverse Tax consequence as a result of that
reimbursement and that relinquishment, surrender or that adverse Tax
consequence was not (or was not fully) taken into account in determining
that reimbursement, the relevant Obligor shall, on demand, return to that
Lender the proportion of the reimbursement which will compensate the Lender
for that relinquishment, surrender or adverse Tax consequence.
14.7 Tax affairs
Nothing in this clause 14 shall oblige any Lender to disclose any
information to any person regarding its Tax affairs or Tax computations or
interfere with the right of any Lender to arrange its Tax affairs in
whatever manner it thinks fit.
14.8 Notification to Parent and Facility Agent
Each Lender will notify the Parent and the Facility Agent if it is not or
ceases to be a Qualifying Lender.
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15. CHANGE IN CIRCUMSTANCES
15.1 Increased costs
(a) If the effect of the introduction of, or a change in, or a change in
the interpretation or application of, any law or regulation (including
any law or regulation relating to Taxation, reserve asset, special
deposit, cash ratio, liquidity or capital adequacy requirements or any
other form of banking or monetary controls) applicable to any Lender
(an "Affected Lender") occurring after the date of this agreement or
compliance by any Lender with any such law or regulation is to:
(i) impose an additional cost on the Affected Lender as a result of
it having entered into any Senior Finance Document or making or
maintaining its participation in any Advance or of it performing
its obligations under any Senior Finance Document;
(ii) reduce any amount payable to the Affected Lender under any Senior
Finance Document or reduce the effective return on its capital or
any class of its capital; or
(iii)result in the Affected Lender making any payment or forgoing any
interest or other return on or calculated by reference to any
amount received or receivable by the Affected Lender from any
other party under any Senior Finance Document,
(each such increased cost, reduction, payment, forgone interest or
other return being referred to in this clause 15.1 as an "increased
cost"), then:
(A) the Affected Lender will notify the Parent and the Facility Agent
of that event as soon as reasonably practicable after becoming
aware of it; and
(B) on demand from time to time by the Affected Lender, the Parent
will pay to the Affected Lender the amount which the Affected
Lender determines is necessary to compensate the Affected Lender
for that increased cost (or the portion of that increased cost
which is, in the opinion of the Affected Lender, attributable to
it entering into the Senior Finance Documents, making or
maintaining its participation in any Drawing, or maintaining its
Commitment).
(b) The certificate of an Affected Lender specifying the amount of
compensation payable under clause 15.1(a) and the basis for the
calculation of that amount is, in the absence of manifest error,
conclusive.
(c) The Parent will not be obliged to compensate any Affected Lender under
clause 15.1(a) in relation to any increased cost:
(i) compensated for by payment of the Mandatory Cost or by clause 14
(Taxes); or
(ii) attributable to a change in Tax on the overall net income of the
Affected Lender.
(d) If any Holding Company of a Lender suffers a cost which would have
been recoverable by that Lender under this clause 15.1 if that cost
had been imposed on that Lender, that Lender shall be entitled to
recover the amount of that cost under this clause 15.1 on behalf of
the relevant Holding Company.
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15.2 Illegality
If it is or becomes contrary to any law or regulation for any Lender to
make any of the Facilities available or to maintain its participation in
any Advance or any of its Commitments, then that Lender may give notice to
that effect to the Facility Agent and the Parent, whereupon:
(a) the relevant Borrowers will in good time before the latest date
permitted by the relevant law or regulation prepay that Lender's
participation in all Advances then outstanding, together with all
interest accrued on those Advances, provide cash cover in an amount
equal to that Lender's Contingent Liability in relation to each Bank
Guarantee (to the extent not already cash collateralised) and pay all
other amounts due to that Lender under the Senior Finance Documents
(including under clause 29.1 (General indemnity and breakage costs));
and
(b) that Lender's undrawn Commitments (if any) will immediately be
cancelled and that Lender will have no further obligation to make the
Facilities available.
15.3 Mitigation
If circumstances arise in relation to a Lender which would or may result
in:
(a) any Advance in which it participates becoming an Affected Advance
under clause 10 (Market Disruption); or
(b) an obligation to pay an additional amount to it under clause 14.1
(Gross up) or clause 14.3 (Indemnity); or
(c) a demand for compensation by it under clause 15.1 (Increased Costs);
or
(d) an obligation to prepay any amount to it under clause 15.2
(Illegality),
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Obligors under the clauses referred to above, that
Lender will notify the Facility Agent and the Parent as soon as reasonably
practicable after becoming aware of those circumstances and, in
consultation with the Facility Agent and the Parent, take such reasonable
steps as may be open to it to mitigate the effects of those circumstances,
including:
(i) changing its Lending Office for the purposes of this agreement;
or
(ii) transferring its rights and obligations under this agreement in
accordance with clause 27 (Changes to parties),
but the Lender concerned will not be obliged to take any action if to do so
might have a material adverse effect on its business, operations or
financial condition or cause it to incur liabilities or obligations
(including Taxation) which (in its opinion) are material or would reduce
its return in relation to its participation in the Facilities.
15.4 Issuing Lender
References in clause 14 (Taxes) and this clause 15 to a "Lender" or
"Lenders" include a Lender in its capacity as an Issuing Lender.
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16. FEES, EXPENSES AND STAMP DUTIES
16.1 Arrangement fee
Subject to the occurrence of the Unconditional Date, the Parent will pay to
the Joint Mandated Lead Arrangers the arrangement fee in accordance with
the terms of the Arrangers' Fees Letter.
16.2 Agency fee
Subject to the occurrence of the Unconditional Date, the Parent will pay to
the Facility Agent for its own account an annual agency fee in accordance
with the terms of the Agency Fees Letter.
16.3 Commitment fee
The Parent will pay to the Facility Agent for the account of the Lenders a
commitment fee which shall accrue from (and including) the date of this
agreement which will:
(a) be calculated at the rate of 0.75 per cent. per annum on the aggregate
of the daily Total Available Commitments and the daily undrawn Term
Commitments; and
(b) be payable on the Completion Date, thereafter quarterly in arrear and
on the last day of the relevant Availability Period for the Term
Facilities (or, if earlier, the date on which the relevant Facility is
fully drawn down) and in the case of the Revolving Facility quarterly
in arrear and on the Revolving Facility Repayment Date,
and such fee shall be conditional on the occurrence of the Unconditional
Date.
16.4 Bank Guarantee commission
Each Borrower for whose account a Bank Guarantee is issued shall pay to the
Facility Agent a commission at a rate equal to the Margin applicable to the
Revolving Facility from time to time on that Lender's Contingent Liability
from day to day in relation to that Bank Guarantee. The commission shall be
payable quarterly in arrear from the date of this agreement for so long as
that Lender has any such Contingent Liability and on the date on which it
ceases to have any such Contingent Liability.
16.5 Bank Guarantee Fees
Each Borrower for whose account a Bank Guarantee is issued shall pay to the
relevant Issuing Lender which issued such Bank Guarantee a fee equal to
0.125 per cent. per annum on the Contingent Liability of that Issuing
Lender (save to the extent that the Issuing Lender is indemnified under the
Revolving Facility by itself in its capacity as a Revolving Lender) from
day to day in relation to that Bank Guarantee. Such fee being payable in
arrear from the date of this agreement for so long as the relevant Issuing
Lender has any such Contingent Liability and on the date on which it ceases
to have any such Contingent Liability.
16.6 VAT
All fees payable under the Senior Finance Documents are exclusive of any
value added tax or other similar tax chargeable on or in connection with
those fees. If any such value added tax or other similar tax is or becomes
chargeable, that tax will be added to the relevant fee at the appropriate
rate and will be paid by the relevant Obligor at the same time as the
relevant fee itself is paid.
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16.7 Initial expenses
The Parent will on demand pay to the Agents and the Joint Mandated Lead
Arrangers the amount of all costs and expenses (including legal fees and
other out-of-pocket expenses and any value added tax or other similar tax
thereon) reasonably incurred by either Agent or the Joint Mandated Lead
Arrangers in connection with:
(a) the negotiation, preparation, execution and completion of the Senior
Finance Documents, and all documents, matters and things referred to
in, or incidental to, any Senior Finance Document;
(b) any amendment, consent or suspension of rights (or any proposal for
any of the same) relating to any Senior Finance Document (and
documents, matters or things referred to in any Senior Finance
Document);
(c) the investigation of any Default; and
(d) primary syndication (including the costs of preparing the Syndication
Memorandum and all matters incidental to primary syndication not
exceeding $150,000 (or its equivalent) in aggregate).
16.8 Enforcement expenses
The Parent will on demand pay to each Finance Party the amount of all costs
and expenses (including legal fees and other out of pocket expenses and any
value added tax or other similar tax thereon) incurred by that Finance
Party in connection with the preservation, enforcement or attempted
preservation or enforcement of any of that Finance Party's rights under any
Senior Finance Document (and any documents referred to in any Senior
Finance Document).
16.9 Stamp duties, etc.
The Parent will on demand indemnify each Finance Party from and against any
liability for any stamp, documentary, filing and other duties and Taxes (if
any) which are or may become payable in connection with any Senior Finance
Document.
16.10 Calculation
All fees under this agreement which accrue and are payable in arrear will
accrue on a daily basis and will be calculated by reference to a 360 day
year and the actual number of days elapsed (or on any other basis required
by market practice).
16.11 Prepayment Fee
Any prepayment in whole or in part of any Advance and/or Bank Guarantee
(other than any prepayment pursuant to clauses 12.4 (Asset Disposals) to
12.7 (Report Claims) (inclusive)) on or before the date which is 18 months
after the Unconditional Date may only be made if in addition to all other
sums required to be paid under this agreement in connection with such
prepayment the relevant Borrower pays to the Facility Agent (for the
account of the Lenders pro rata to their Commitments at the time of
prepayment) at the time of such prepayment a fee equal to two per cent. of
the aggregate amount to be prepaid in respect of any prepayment on or
before the date which is 12 months after the
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Unconditional Date or one per cent. of the aggregate amount to be prepaid
in respect of any prepayment after the date which is 12 months after but on
or before the date which is 18 months after the Unconditional Date.
17. GUARANTEE AND INDEMNITY
17.1 Guarantee
Each Guarantor irrevocably and unconditionally and jointly and severally:
(a) guarantees to each Finance Party punctual performance by each Obligor
of all that Obligor's obligations under the Senior Finance Documents
including without limitation the payment in full of all amounts that
would become due but for the operation of the automatic stay within
section 362(a) of the US Bankruptcy Code;
(b) undertakes with each Finance Party that whenever an Obligor does not
pay any amount when due under or in connection with any Senior Finance
Document, that Guarantor shall immediately on demand pay that amount
as if it was the principal obligor; and
(c) indemnifies each Finance Party immediately on demand against any cost,
loss or liability suffered by that Finance Party if the guarantee
given under clause 17.1(a) or any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal;
subject, in each case, to any limitation on the amount guaranteed required
by applicable law which is contained in the Accession Document by which
that Guarantor becomes a Guarantor or as set out in clause 17.10 (Guarantee
Limitation).
17.2 Further guarantee provisions
The obligations of each Guarantor under clause 17.1 (Guarantee and
indemnity) (the "Guarantee Obligations"):
(a) will not extend to cover any indebtedness which, if they did so extend
would cause the infringement of section 151 of the Companies Act 1985
(in the case of an Obligor incorporated in the United Kingdom),
section 60 of the Irish Companies Act, 1963 (in the case of an Obligor
incorporated in Ireland) or any similar enactments or provisions in
any other jurisdiction (in the case of an Obligor incorporated outside
the United Kingdom or the Republic of Ireland).
(b) are a continuing security and will extend to the ultimate balance of
all amounts payable by each Obligor under any Senior Finance Document,
regardless of any intermediate payment or discharge in whole or in
part; and
(c) are in addition to and are not in any way prejudiced by any other
security now or subsequently held by any Finance Party.
17.3 No discharge
The Guarantee Obligations shall not be discharged, diminished or in any way
adversely affected as a result of any of the following (whether or not
known to any Obligor or Finance Party):
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(a) any time, consent or waiver given to, or composition made with, any
Obligor or any other person;
(b) any amendment to, or replacement of, any Senior Finance Document
(however fundamental) or any other agreement or security;
(c) the taking, variation, compromise, renewal, release or refusal or
neglect to perfect or enforce any right, remedies or security against
any Obligor or any other person;
(d) any purported obligation of any Obligor or any other person to any
Finance Party (or any security for that obligation) becoming wholly or
partly void, invalid, illegal or unenforceable for any reason;
(e) any incapacity, lack of power, authority or legal personality or any
change in the constitution of, or any amalgamation or reconstruction
of, any Obligor, Finance Party or other person;
(f) any Obligor or other person becoming insolvent going into receivership
or liquidation, having an administrator appointed or becoming subject
to any other procedure for the suspension of payments to or protection
of creditors or similar proceedings;
(g) any change in the constitution of any Finance Party or as a result of
the amalgamation or consolidation by a Finance Party with any other
person; or
(h) any other act, omission, circumstance, matter or thing which, but for
this provision, might operate to release, reduce or otherwise
exonerate the relevant Guarantor from any of its obligations under
clause 17.1 (Guarantee).
17.4 Determination of Guarantee Obligations
If, notwithstanding clause 17.2(b) (Further guarantee provisions), the
Guarantee Obligations cease to be continuing obligations:
(a) each Finance Party may continue any account or open one or more new
accounts with any Obligor and the liability of each Guarantor shall
not be reduced or affected in any way by any subsequent transactions
or receipts or payments into or out of any such account; and
(b) each Guarantor will remain liable in relation to all indebtedness
referred to in clause 17.1(a) (Guarantee) as at the date of
determination (whether demanded or not) and whether or not any other
Obligor is then in default under the Senior Finance Documents.
17.5 Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance
Party (or any trustee or agent on its behalf) to proceed against or enforce
any other rights or security or claim payment from any person before
claiming from that Guarantor under this clause 17. This waiver applies
irrespective of any law or any provision of a Senior Finance Document to
the contrary.
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17.6 No subrogation
Subject to clause 17.7 (Exercise of subrogation), until all amounts which
may be or become payable by any Obligor under or in connection with any
Senior Finance Document have been irrevocably paid in full each Guarantor
undertakes not to exercise any rights which it may have:
(a) to be subrogated to or otherwise share in any security or monies held,
received or receivable by any Finance Party or to claim any right of
contribution in relation to any payment made by any Guarantor under
this agreement;
(b) to enforce any of its rights of subrogation and indemnity against any
Obligor or any co-surety;
(c) following a claim being made on any Guarantor under clause 17.1
(Guarantee), to demand or accept repayment of any monies due from any
other Obligor to any Guarantor or claim any set-off or counterclaim
against any other Obligor; or
(d) to claim or prove in a liquidation or other insolvency proceeding of
any Obligor or any co-surety in competition with any Finance Party;
and
provided that in addition to the foregoing, each Guarantor that is a US
Obligor (each a "US Guarantor") hereby waives any and all rights which it
may have at any time:
(i) to be subrogated to or otherwise share in any security or monies
held, received or receivable by any Finance Party or to claim any
right of contribution in relation to any payment made by such US
Guarantor under this agreement; and
(ii) to enforce any of its rights of subrogation or indemnity or
reimbursement against any Obligor or any co-surety in relation to
any payment made by such US Guarantor under this agreement.
17.7 Exercise of subrogation
Following the making of a demand on any Guarantor under clause 17.1
(Guarantee), that Guarantor will (at its own cost) promptly take such of
the steps or action as are referred to in clause 17.6 (No subrogation) as
the Facility Agent may from time to time stipulate.
17.8 Turnover
Each Guarantor shall promptly pay to the Facility Agent an amount equal to
any set-off, proof or counterclaim exercised by it against another Obligor
or any co-surety and shall hold in trust for, and promptly pay or transfer
to, the Facility Agent any payment, distribution or benefit of security
received by it, whether arising as a result of a breach of clause 17.6 (No
subrogation) or compliance with directions given under clause 17.7
(Exercise of subrogation).
17.9 Suspense accounts
Until all amounts which may be or become payable by any Obligor under or in
connection with any Senior Finance Document have been irrevocably paid in
full, any amount received or recovered by any Finance Party from a
Guarantor in relation to any amount due and payable by any Obligor under
any Senior Finance Document may be held by the recipient in a suspense
account. Amounts deposited in
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any such account shall accrue interest at the Facility Agent's usual rate
for deposits of a similar amount and nature from time to time and interest
accrued shall be credited to that account.
17.10 Guarantee limitations
Anything contained in this clause 17 to the contrary notwithstanding, the
obligations of each US Obligor under this clause 17 shall be limited to a
maximum aggregate amount equal to the greatest amount that would not render
such US Obligor's obligations under this clause 17 subject to avoidance as
a fraudulent transfer or conveyance under Section 548 of the US Bankruptcy
Code or any applicable provisions of comparable law of one or more of the
states comprising the United States of America (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such US Obligor, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such US Obligor (a) in respect of intercompany indebtedness
to any Group Company to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such US Obligor
hereunder and (b) under any guarantee of senior unsecured indebtedness or
indebtedness subordinated in right of payment to obligations of the
Obligors outstanding under this agreement, which guarantee contains a
limitation as to maximum amount similar to that set forth in this
paragraph, pursuant to which the liability of such US Obligor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under
the applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar right of
such US Obligor pursuant to (i) applicable law or (ii) any agreement
providing for an equitable allocation among such US Obligor and other
affiliates of the Borrowers of obligations arising under this clause 17 by
such parties.
18. CHANGES TO OBLIGORS AND SECURITY
18.1 Additional Borrowers
A Group Company which is not dormant may become a Borrower after the
Unconditional Date in respect of the Revolving Facility if:
(a) the Parent gives notice to the Facility Agent identifying the relevant
Group Company (attaching certified copies of such Group Company's most
recent audited accounts (unless already provided));
(b) the Majority Lenders (acting reasonably) confirm to the Facility Agent
that they consent to the relevant Group Company becoming a Borrower;
(c) the relevant Group Company, the Parent (for itself and as agent for
the existing Obligors) and the Facility Agent execute an Accession
Document designating that Group Company as a Borrower and a Guarantor;
and
(d) the Parent delivers to the Facility Agent:
(i) the original Accession Document executed by the relevant new
Borrower as Borrower and Guarantor and the Parent (for itself and
as agent for the existing Obligors); and
(ii) the documents listed in parts 3 and 4 of Schedule 4, each in
relation to the acceding Borrower,
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each satisfactory to the Facility Agent.
18.2 Effective time
When the conditions set out in clause 18.1 (Additional Borrowers) are
satisfied, the Facility Agent will notify the Parent and the Finance
Parties and the relevant Group Company will become a Borrower with effect
from that notification.
18.3 Additional Guarantors
(a) The Parent shall procure that any Group Company, which is or becomes a
Material Subsidiary which is not a Guarantor on the date of this
agreement nor required to become a Guarantor pursuant to clause
20.11(h) (Take Private Procedure and Provision of Security) shall
(unless prohibited by law) become a Guarantor by executing an
Accession Document within 10 Business Days of it so becoming a
Material Subsidiary.
(b) When an Accession Document is entered into under clause 18.3(a), the
Parent shall deliver to the Facility Agent:
(i) the original Accession Document executed by the relevant new
Obligor and the Parent (for itself and as agent for the existing
Obligors); and
(ii) the documents listed in parts 3 and 4 of schedule 4, each in
relation to the acceding Guarantor; and
(iii) a legal opinion,
each satisfactory to the Facility Agent.
(c) If it is unlawful for a Group Company to become a Guarantor under this
clause 18.3 or to provide security under clause 18.4 (Further
security), then each Obligor will use all reasonable endeavours to
overcome the prohibition (and, in the case of a financial assistance
or similar prohibition, will procure that the relevant Group Company
will undertake all whitewash or similar procedures which are possible)
to enable the relevant guarantee and/or security to be given as soon
as is reasonably practicable.
(d) The Parent shall procure that at all times the aggregate gross assets,
gross revenues and EBITDA of the Guarantors exceeds 80 per cent. of
each of the gross assets, gross revenues and EBITDA of the Group, and
to the extent necessary shall procure that Group Companies which are
not Material Subsidiaries become Guarantors in accordance with clauses
18.3(a), (b) and (c) to ensure compliance with this clause 18.3(d).
18.4 Further security
(a) The Parent shall procure that:
(i) any Group Company which becomes a Borrower shall, before becoming
a Borrower; and
(ii) any Material Subsidiary or Guarantor which has not entered into a
Security Document over all or substantially all of its assets
(the "Relevant Assets"), shall (unless
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prohibited by law) within 10 Business Days of it becoming a
Material Subsidiary or upon becoming a Guarantor,
execute a Security Document over the Relevant Assets in favour of the
Security Agent (and in form and substance satisfactory to the Security
Agent) as security for all indebtedness (or such part for which it is
lawful) under the Senior Finance Documents.
(b) When a Security Document is entered into under clause 18.4(a), the
Parent shall deliver to the Facility Agent:
(i) the original Security Document executed by the relevant Group
Company; and
(ii) the documents listed in parts 3 and 4 of schedule 4, each in
relation to the relevant Group Company; and
(iii) a legal opinion,
each satisfactory to the Facility Agent.
18.5 Release of Guarantors
If no Default is continuing and all the shares in a Guarantor which is not
a Borrower are disposed of in accordance with this agreement, the Facility
Agent and the Security Agent shall, on request of the Parent as soon as
reasonably practicable after completion of such disposal, execute any
documents which are necessary to release that Guarantor from all
liabilities under the Senior Finance Documents.
18.6 Release of security
If no Default is continuing and a Group Company disposes of any asset
(including shares in any other Group Company which is not a Borrower or
shares in a Group Company which is a Borrower and such Borrower has repaid
all obligations due and owing by it under the Senior Finance Documents) in
accordance with this agreement, the Security Agent shall, on request of the
Parent as soon as reasonably practicable after completion of that disposal,
execute any documents necessary to release that asset from the security
created in favour of the Security Agent by a Security Document.
19. REPRESENTATIONS AND WARRANTIES
19.1 Reliance
Each Obligor represents and warrants as set out in the following provisions
of this clause 19 and acknowledges that each Finance Party has entered into
the Senior Finance Documents and has agreed to provide the Facilities in
full reliance on those representations and warranties.
19.2 Incorporation
It, and each of its Subsidiaries, is duly incorporated and validly existing
with limited liability under the laws of the place of its incorporation and
has the power to own its assets and carry on its business. To the extent
such Group Company is incorporated under the laws of the United States of
America or any of the states thereof, such Group Company is in good
standing under the laws of its jurisdiction of incorporation.
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19.3 Power and capacity
It has the power and capacity to enter into and comply with its obligations
under each Transaction Document to which it is party.
19.4 Authorisation
It has taken all necessary action:
(a) to authorise the entry into and the compliance with its obligations
under each Transaction Document to which it is party;
(b) to ensure that its obligations under each Transaction Document are
valid, legally binding and enforceable in accordance with their terms;
(c) to make each Transaction Document to which it is party admissible in
evidence in the courts of the jurisdiction to which it has submitted
in that Transaction Document; and
(d) to create the security constituted by each Security Document to which
it is party and to ensure that that security has the ranking specified
in that Security Document.
19.5 No contravention
Its entry into, the exercise of its rights under and the compliance with
its obligations under each Transaction Document to which it is party and
the carrying out of the transactions contemplated by the Transaction
Documents do not:
(a) contravene any law, regulation, judgment or order to which any Group
Company is subject;
(b) conflict with its constitutional documents;
(c) breach any agreement or the terms of any consent binding upon any
Group Company or any assets of any Group Company; or
(d) oblige any Group Company to create any security or result in the
creation of any security over any assets of any Group Company, other
than under the Security Documents.
19.6 Obligations binding
The obligations expressed to be assumed by it under each Transaction
Document to which it is a party constitute its valid and legally binding
obligations and, subject to the Reservations, are enforceable in accordance
with their terms.
19.7 Consents
(a) All consents and filings required for the conduct of its business as
presently conducted have been obtained and are in full force and
effect except to the extent that the absence of any such consent or
filing does not and is not reasonably likely to have a Material
Adverse Effect.
(b) Each US Obligor and each of its Subsidiaries is qualified to do
business and in good standing in every jurisdiction where its assets
are located and wherever necessary to carry out its
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business and operations, except in jurisdictions where the failure to
be so qualified or in good standing has not had and is likely to not
have a Material Adverse Effect.
19.8 No Defaults
(a) No Default has occurred and is continuing.
(b) No event is continuing which constitutes a default or which with the
giving of notice or the lapse of time or making of any determination
or fulfilment of any condition could reasonably be expected to
constitute a default under any agreement or document to which any
Group Company is party and which default could have a Material Adverse
Effect.
19.9 Litigation
No dispute, litigation, arbitration or administrative proceeding is current
or pending or, so far as it is aware, threatened against any Group Company
which is reasonably likely to be adversely determined against a Group
Company and which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
19.10 Environment
Save as disclosed in the Legal Report, to the best of its knowledge and
belief (having made all due and careful enquiries):
(a) Each Group Company is and has at all times been in compliance in all
material respects with all Environmental Laws and all Environmental
Approvals necessary in connection with the ownership and operation of
its business are in full force and effect.
(b) There are no circumstances which could reasonably be expected to
prevent any Group Company from complying with any Environmental Law.
(c) No material unbudgeted investment is necessary to obtain or renew any
Environmental Approval.
(d) There has been no act or omission by it, and no event or circumstance
has arisen, in each case which has resulted in (or could result in)
any third party taking any legal proceedings against any Group Company
under any Environmental Law or in the revocation, suspension,
variation or non-renewal of any Environmental Approval.
(e) No Group Company has received any notice of any complaints, demands,
civil claims, liens, enforcement proceedings, requests for
information, or of any action required by any regulatory authority and
there are no investigations pending or, as far as it is aware,
threatened in relation to the failure of any Group Company to obtain
any Environmental Approval or comply with Environmental Law.
19.11 Ownership of assets
(a) The shares in Target acquired by the Parent pursuant to the Offer,
from the time they are acquired, will be beneficially owned by the
Parent which will be entitled to and will forthwith upon registration
in the register of members become the legal and beneficial (and, where
applicable, registered) owner of such shares in
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Target except for such number of shares in Target required to be held
by nominees to comply with the requirements of the Irish Companies
Act, 1963 for so long as Target is a public limited company provided
that Parent is the beneficial owner of all of the shares in Target
acquired by it and no more than six shares in Target are held by
nominees.
(b) Each Group Company has good title to all assets necessary to conduct
its business.
19.12 Original accounts
To the best of the Parent's knowledge and belief, having made all due and
careful enquiries, the Original Audited Accounts and the Original
Management Accounts were prepared in accordance with Irish gaap and save as
disclosed in the Accountant's Report, in the case of:
(a) the Original Audited Accounts, give a true and fair view of the
consolidated financial position as at the date to which they were
prepared and the results of the operations of the Target Group for the
period to which they relate and the state of the affairs of the Target
Group at the end of such period and, in particular, disclose or
reserve against all liabilities (actual or contingent) to the extent
required by Irish gaap; and
(b) the Original Management Accounts, show with reasonable accuracy, the
consolidated financial position as at the date to which they were
prepared and the results of the operations of the Target Group for the
period to which they relate and the state of the affairs of the Target
Group at the end of such period, and, in particular, disclose or
reserve against all liabilities (actual or contingent) to the extent
required by Irish gaap.
19.13 Management Financial Model
To the best of the Parent's knowledge and belief, having made all due and
careful enquiries:
(a) the Management Financial Model was prepared honestly and was arrived
at after careful consideration and is based on reasonable grounds.
(b) the projections and forecasts contained in the Management Financial
Model are based upon assumptions (including assumptions as to the
future performance of the Target Group, inflation, price increases,
interest rates and efficiency gains) which have been carefully
considered by the directors of the Parent and are considered by them
to be fair and reasonable.
(c) the Management Financial Model is not misleading in any material
respect and does not omit to disclose any matter where failure to
disclose such matter would result in the Management Financial Model
(or any information contained therein) being misleading in any
material respect.
(d) nothing has occurred or come to the attention of the Parent since the
date as at which the Management Financial Model was prepared which
renders the Management Financial Model inaccurate or misleading or
which makes any of the projections or forecasts contained in the
Management Financial Model unfair or unreasonable or renders any of
the assumptions on which the projections are based unfair or
unreasonable.
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19.14 Reports
(a) All information supplied by or on behalf of any Group Company (or to
the best of the Parent's knowledge and belief, having made all due and
careful enquiry by or on behalf of any member of the Target Group) in
connection with the preparation of the Reports was true, complete and
accurate in all material respects at the dates supplied.
(b) To the best of the Parent's knowledge and belief, having made all due
and careful enquiries, all statements of fact recorded in the Reports
are true and accurate in all material respects.
(c) To the best of the Parent's knowledge and belief, having made all due
and careful enquiries, no Report is misleading in any material respect
and there is no expression of opinion, forecast or projection
contained in, or any conclusion reached in any Report which is not
fair and reasonable.
(d) To the best of the Parent's knowledge and belief, having made all due
and careful enquiries, nothing has occurred or come to light since the
date of any Report which renders any material facts contained in that
Report inaccurate or misleading or which makes any of the opinions,
projections, forecasts or conclusions contained in the relevant Report
unfair or unreasonable.
19.15 Transaction Documents
(a) The Offer Documents as furnished to the Facility Agent under this
agreement will contain all the material terms of the Offer.
(b) The Equity Documents and the Mezzanine Finance Documents as provided
to the Facility Agent under this agreement contain all the material
terms of the agreements and arrangements between any Group Company and
the Original Equity Investors and the Mezzanine Lenders respectively.
19.16 Structure Document
To the best of the Parent's knowledge and belief, having made all due and
careful enquiries all information recorded in the Structure Document is
accurate in all material respects and each of the companies identified in
the Structure Document as being dormant is a Dormant Company.
19.17 Material adverse change
To the best of its knowledge and belief (having made all due and careful
enquiries) there has been no material adverse change in the business,
assets, financial condition, prospects or operations of the Target Group
since the date to which the Original Audited Accounts were prepared.
19.18 Material disclosures
It has fully disclosed in writing to the Facility Agent all facts known to
it relating to the Offer and the Target Group which it knows could
reasonably be expected to influence the decision of the Lenders to make the
Facilities available.
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19.19 Newly incorporated companies and dormant companies
(a) The Parent is a holding company and neither the Parent nor Loan Noteco
have carried on any business or incurred any liabilities other than by
entering into or under the Transaction Documents and in relation to
payment of legal fees, auditors fees and expenses.
(b) None of the Dormant Companies are trading.
19.20 Offer Document
The Press Announcement and the Offer Document do not contain any untrue
statement by the Parent or omit any information which makes any statement
for which the Parent or its directors are responsible misleading in any
material respect and expressions of expectation, intention, belief and
opinion contained therein were honestly made on reasonable grounds after
due and careful consideration by the Parent and its directors.
19.21 Intellectual Property
(a) The Material Intellectual Property required for each Group Company to
conduct its business as presently conducted:
(i) is, save as disclosed in the Legal Report, legally and
beneficially owned by it or licensed to a Group Company (and
where registered or the subject of an application it is the
registered proprietor) and is free from any licences or
obligation to assign to third parties and Security Interests
which are materially prejudicial to the use of that Material
Intellectual Property and will not be adversely affected by the
transactions contemplated by the Transaction Documents; and
(ii) has not lapsed or been cancelled and all steps have been taken to
protect and maintain that Material Intellectual Property,
including paying renewal fees.
(b) Where the Material Intellectual Property required for each Group
Company to conduct its business as presently conducted is subject to
any right, permission to use or licence granted to or by any Group
Company, that agreement has not been breached in any material respect
or terminated by any party.
(c) So far as it is aware, after due and careful review and enquiry, no
Group Company is infringing any Intellectual Property Rights of any
third party and the Material Intellectual Property is not being
infringed by any third party.
19.22 Pensions
(a) Save as disclosed in the Legal Report, no Group Company incorporated
in the USA has any Employee Benefit Arrangements other than the 401(k)
plan that has been established by the US Companies.
(b) The Parent will:
(i) if requested by the Facility Agent as soon as reasonably
practicable deliver to the Facility Agent any actuarial reports
in relation to the pension schemes for the time
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being operated by Group Companies ("actuarial reports") which are
prepared in order to comply with then current statutory or
auditing requirements; and
(ii) if requested by the Facility Agent, (acting reasonably) as soon
as reasonably practicable prepare actuarial reports and deliver
those to the Facility Agent, if the Facility Agent (acting
reasonably) believes that any relevant material statutory or
auditing requirement concerning funding levels is not being
complied with.
(c) The Parent will ensure that all such pension schemes are funded to the
extent required by law based on reasonable actuarial assumptions
applicable in the jurisdiction in which the relevant pension scheme is
maintained.
(d) There are no circumstances which may give rise to a liability in
relation to Employee Benefits Arrangements which would be reasonably
likely to result in a Material Adverse Effect.
19.23 ERISA
(a) No Group Company incorporated in the USA has any Unfunded Liabilities.
(b) Each Plan complies in all material respects with the applicable
requirements of ERISA and the IR Code, except to the extent that the
failure to comply therewith does not have a Material Adverse Effect.
(c) No Reportable Event has occurred with respect to any Plan, except to
the extent that such Reportable Event does not have a Material Adverse
Effect.
(d) No Group Company incorporated in the USA nor any ERISA Affiliate has
incurred, or is reasonably expected to incur, any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of
the IR Code relating to employee benefit plans (as defined in section
3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence
of any such liability by a Group Company incorporated in the USA or
any ERISA Affiliate, or in the imposition of any lien on any of the
rights, properties or assets of a Group Company incorporated in the
USA or any ERISA Affiliate, in either case pursuant to Title I or IV
of ERISA or to such penalty or excise tax provisions of the IR Code or
to section 401(a)(29) or 412 of the IR Code which would have a
Material Adverse Effect.
(e) No Group Company incorporated in the USA:
(i) is a party to any Multiemployer Plan; or
(ii) has withdrawn from any Multiemployer Plan, except to the extent
such actions do not have a Material Adverse Effect.
(f) The execution and delivery of this agreement and the consummation of
the transactions contemplated hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which taxes could be imposed pursuant to
section 4975(c)(1)(A)-(D) of the IR Code.
(g) No Group Company incorporated or doing business in the USA has any
contingent liability with respect to any post-retirement benefit under
a Welfare Plan, other than liability for
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continuation coverage described in Part 6 of Title I of ERISA and
except where such liability is not reasonably likely to result in a
Material Adverse Effect.
19.24 Investment Companies
No US Obligor is (a) a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended; (b) an "investment company" or a company
"controlled" by a person required to be registered as an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended or (c) subject to regulation under any United States federal or
state statute or regulation (other than Regulations X of the Board of
Governors of the Federal Reserve System of the USA) limiting its ability to
incur indebtedness.
19.25 Compliance with laws
The Offer complies with all applicable U.S. federal, state and local laws.
19.26 Syndication Memorandum
(a) Any factual information provided by any member of the Group for the
purposes of the Syndication Memorandum was true and accurate in all
material respects as at the date it was provided or as at the date (if
any) at which it is stated.
(b) The financial projections contained in the Syndication Memorandum have
been prepared on the basis of recent historical information and on the
basis of reasonable assumptions.
(c) Nothing has occurred since the date of the Syndication Memorandum or
been omitted from the Syndication Memorandum and no information has
been given or withheld by any member of the Group to any Finance Party
that results in the information contained in the Syndication
Memorandum being untrue or misleading in any material respect.
19.27 Repetition
The representations and warranties in this clause 19 are made on the date
of this agreement and shall be deemed repeated on the date of each Drawdown
Request, on each Drawdown Date and on the first day of each Interest
Period, in each case by reference to the facts and circumstances existing
on that date, except that:
(a) the representations and warranties set out in clauses 19.8(a) (No
Defaults), 19.9 (Litigation), 19.13 (Management Financial Model),
19.14 (Reports), 19.16 (Structure Document) 19.17 (Material adverse
change), 19.18 (Material disclosures), 19.19 (Newly incorporated
Companies), 19.20 (Offer Document), 19.22 (Pensions) and 19.23 (ERISA)
shall not be repeated after the date of the first Drawdown;
(b) in clause 19.12 (Original accounts), (a) the references to Original
Audited Accounts shall be construed after the Unconditional Date as
references to the then latest Annual Accounts, (b) the references to
Original Management Accounts shall be construed after the
Unconditional Date as references to the then latest Monthly Accounts,
(c) after the Unconditional Date the references to Target Group shall
be construed as references to the Group, and (d) after the
Unconditional Date, the words "to the best of the Parent's knowledge
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and belief, having made all due and careful enquiries" shall be deemed
deleted from that clause; and
(c) the representation and warranty set out in clause 19.26 (Syndication
Memorandum) shall only be made on the date the Syndication Memorandum
is approved by the Parent.
19.28 Enquiries
References in this clause 19 to the Parent having made all due and careful
enquiries shall be deemed to refer to the Parent having obtained and read
(a) the Reports and (b) the warranties given by the Key Executives in the
Investment Agreement (and any related disclosure letter), and (c) in the
case of clause 19.16 (Structure Document) to the Parent having reviewed
company searches in respect of the Target Group, such searches having been
updated as at the date of the Structure Document.
20. UNDERTAKINGS
20.1 Duration of undertakings
Each Obligor undertakes to each Finance Party in the terms of this clause
20 from the date of this agreement until all amounts outstanding under the
Senior Finance Documents have been discharged and no Finance Party has any
further Commitment or obligations under the Senior Finance Documents.
20.2 Authorisations and status undertakings
(a) Consents
Each Obligor will obtain and maintain in full force and effect all
consents and filings required under any applicable law or regulation:
(i) to enable it to perform its obligations under each Transaction
Document to which it is a party; and
(ii) for the validity, enforceability or admissibility in evidence of
each such Transaction Document.
(b) Maintenance of status and authorisation
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) do all things necessary to maintain its corporate existence;
(ii) obtain and maintain in full force and effect all consents and
filings required for the conduct of its business; and
(iii) comply with all laws and regulations applicable to it.
(c) Amalgamations
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, amalgamate, merge or consolidate with or into any
other person or be the subject of any reconstruction.
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(d) Change of business
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make a material change to the nature of its
business (other than pursuant to a disposal permitted under clause
20.3(a) (Disposals)).
(e) Constitutional documents
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, agree to any amendment of its constitutional
documents which may adversely affect the interests of any Finance
Party under the Senior Finance Documents and will supply the Facility
Agent with written details of any proposed change before the members'
resolution approving such change is passed.
(f) Holding company status
(i) The Parent shall not carry on any business (other than the
holding of shares in and the provision of administrative services
to other Group Companies) or acquire any assets (other than under
the Offer Documents).
(ii) Loan Noteco shall not carry on any business or own any assets
other than the benefit of loans made to the Parent.
(g) Pari passu ranking
Each Obligor shall ensure that the claims of the Finance Parties under
the Senior Finance Documents will at all times rank at least pari
passu in right and priority of payment with the claims of all its
other present and future unsecured and unsubordinated indebtedness
(actual or contingent) except those whose claims are preferred solely
by operation of law.
(h) Dormant Companies
None of the Dormant Companies will commence trading or acquire any
assets.
20.3 Disposals and security undertakings
(a) Disposals
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, (whether by a single transaction or a series of
related or unrelated transactions and whether at the same time or over
a period of time) sell, transfer, lease out or otherwise dispose (each
a "disposal") of any of its assets or agree to do so, other than:
(i) any disposal on arm's length terms in the ordinary course of
trading (excluding the granting of a licence of any Intellectual
Property);
(ii) disposals of redundant or obsolete assets;
(iii)disposals of assets in exchange for other assets which are
comparable or better as to type and quality;
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(iv) disposals from any Obligor to any other Obligor or from any Group
Company which is not an Obligor to any other Group Company;
(v) disposals of cash not prohibited by this agreement; and
(vi) the granting of a licence of Intellectual Property on arm's
length terms in the ordinary course of trading.
(b) Disposals for full consideration
The Parent will ensure that any disposal permitted by clause 20.3(a)
(other than clause 20.3(a)(iv) or (v)) is:
(i) for at least market value payable in cash (except in the case of
a disposal permitted by clause 20.3(a)(iii)) on or before
completion of that disposal; and
(ii) as part of an arm's length transaction on terms that the
purchaser of the relevant asset does not obtain title to or
possession of that asset before completion of that disposal.
(c) Negative pledge
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, create or agree to create or permit to subsist any
Security Interest over any part of its assets, other than:
(i) any Security Interest granted by the Senior Finance Documents;
(ii) liens securing obligations no more than 30 days overdue, arising
by operation of law and in the ordinary course of trading;
(iii)Security Interests arising out of title retention provisions in
a supplier's standard conditions of supply of goods where the
goods in question are supplied on credit and are acquired by
relevant Group Company in the ordinary course of trading;
(iv) set-off rights arising or created in favour of banks in respect
of accounts or deposits maintained in the ordinary course of the
Group's business;
(v) rights over cash deposits granted in favour of (i) a landlord for
the purposes of securing performance of rent and service charge
obligations under licences, subleases or leases of real property
permitted under this agreement or (ii) a bank to secure the
obligations to reimburse or repay such bank where it pays sums
under guarantees or similar instruments issued in respect of any
such licenses, subleases or leases of real property;
(vi) Security Interests granted by the Target Group prior to the
Unconditional Date in relation to the Foothill Facilities or
otherwise until 21 days after the Unconditional Date and provided
that the relevant Group companies are at all times in compliance
with the Foothill Facility Agreement; and
(vii)Security Interests arising over assets financed or acquired by
any finance lease provided that the aggregate capitalised amount
of such leases (determined in accordance with the Applicable
Accounting Principles and excluding any accruing
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interest element under such leases) with respect to equipment so
leased shall not any time exceed in aggregate $3,000,000 (or its
equivalent at any time),
provided further that notwithstanding clause 20.3(c)(ii)-(v) inclusive
and (vi), at any time that any member of the Target Group incorporated
in the Republic of Ireland and named in schedule 9 has failed to
execute a Guarantee Increase Deed or any Security Document set out in
schedule 9 to be executed by such member of the Target Group or has
failed to enter into the Financial Assistance Documents or otherwise
comply with the provisions of section 60 of the Irish Companies Act,
1963 in all respects in relation to such Security Documents, no
Obligor incorporated in the Republic of Ireland will create or agree
to create or permit to subsist any Security Interest over any
Intellectual Property Rights owned by it or (any part thereof) or any
shares owned by it.
(d) Sale and leaseback transactions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, sell or otherwise dispose of any asset on terms
whereby such asset is or may be leased or re-acquired by it or any
other Group Company, where the higher of the book value or market
value of the assets thereby disposed of (whether by a single
transaction or by a series of transactions) does not exceed in
aggregate $500,000 (or its equivalent at any time).
(e) Factoring receivables
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, sell or otherwise dispose of any receivable other
than in the ordinary course of trade.
20.4 Acquisition and investment undertakings
(a) Acquisitions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, acquire any assets or shares, other than:
(i) in the ordinary course of its trading activity;
(ii) shares in the Target; and
(iii)Capital Expenditure required for the business of the relevant
Group Company, subject to compliance with clause 20.13(d)
(Capital Expenditure).
(b) Joint ventures
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, enter into any joint venture, partnership or
similar arrangement with any person other than co-operation agreements
entered into in the ordinary course of business and not involving the
creation of any company or partnership provided that the aggregate
amount which Group is required to invest under such co-operation
agreements shall not exceed in aggregate $1,000,000 (or its
equivalent) in any Financial Year.
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20.5 Financing arrangement undertakings
(a) Borrowings
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, incur or permit to be outstanding any Financial
Indebtedness, other than:
(i) amounts due under any Finance Document or any Equity Document;
(ii) Financial Indebtedness permitted by clauses 20.5(b) (Guarantees)
and 20.5(c) (Loans);
(iii)unsecured overdraft or working capital facilities in relation to
which a Bank Guarantee in an amount equal to the maximum
principal amount of those facilities has been issued;
(iv) finance leases and hire purchase contracts not exceeding
$3,000,000 (or such other figure as is agreed with the Lenders)
in aggregate capital value at any time;
(v) the Foothill Facilities and any other facilities of the Target
Group until 21 days after the Unconditional Date and provided
that the relevant Group companies are at all times in compliance
with the Foothill Facility Agreement or such other agreement
relating to such facilities;
(vi) Financial Indebtedness owed between members of the Target Group
at the Unconditional Date;
(vii)spot and forward foreign exchange facilities not exceeding an
aggregate risk weighted amount of $2,000,000 provided that
following the date which is 60 days after the Unconditional Date
all new foreign exchange contracts shall be entered into with the
Lenders;
(viii) unsecured working capital facilities in an aggregate amount not
exceeding $5,000,000 (or equivalent) at any time; and
(ix) Financial Indebtedness outstanding under Allied Irish Bank's
Subsidised Loan Scheme dated 9 December 1996 between Allied Irish
Bank and Lifetime Learning Limited in a maximum aggregate amount
not exceeding IR(pound)200,000 (or its equivalent) at any time.
(b) Guarantees
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will grant or make available any guarantee, other than:
(i) any guarantee contained in any Finance Document; and
(ii) any guarantee given by an Obligor or any of its Subsidiaries in
respect of the indebtedness or other obligations of a Group
Company provided that such indebtedness is permitted under
clauses 20.5(a) (Borrowings) (i), (iii) or (iv) or such other
obligations have been incurred without breach of this agreement.
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(c) Loans
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any loans or grant any credit to any person
other than:
(i) normal trade credit;
(ii) loans by an Obligor to another Obligor;
(iii)loans by any Group Company which is not an Obligor to any other
Group Company;
(iv) loans by Obligors to Group Companies which are not Obligors not
exceeding $250,000 in aggregate; and
(v) loans to employees not exceeding $50,000 outstanding at any time.
(d) Hedging
(i) No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, enter into any Hedging Instrument other than
(A) the Hedging Agreements referred to in (ii) below and (B)
Hedging Instruments entered into in the ordinary course of its
business for the purpose of managing or hedging its exposure to
interest rates, exchange rates or commodity prices and (c)
Hedging Instruments in a form approved by the Joint Mandated Lead
Arrangers entered into for the purpose of ensuring the Parent has
sufficient monies to meet all obligations under the Offer.
(ii) The Obligors will, by no later than 30 days after the
Unconditional Date, enter into Hedging Agreements so as to ensure
that, for a period of at least three years from the first
Drawdown Date, the Group has hedging of interest rate exposure on
terms satisfactory to the Facility Agent in relation to at least
65 per cent. of the aggregate amount capable of being drawn under
the Term Facilities and the Mezzanine Loan Agreement. All Hedging
Agreements will be entered into with Hedging Lenders unless, the
Lenders having been given the opportunity to offer terms for
providing Hedging Agreements, the Lenders have not offered terms
which are reasonably competitive with those offered by another
reputable bank or financial institution in which case the Hedging
Agreement shall be provided by such bank or institution. If any
Hedging Agreement is entered into with a person other than a
Hedging Lender, the relevant Group Company shall assign its
rights thereunder to the Security Agent as security for all
obligations under the Senior Finance Documents and the relevant
counterparty shall not be secured.
(e) Banking business
Each Obligor will and will procure that each Group Company will:
(i) maintain bank accounts outside the UK only with banks approved by
the Facility Agent (acting reasonably); and
(ii) maintain bank accounts in the UK only with the Facility Agent
provided that if the Facility Agent does not provide facilities
to the relevant Group Companies on normal commercial terms no
worse than those offered by other banks in the relevant market,
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the relevant Group Companies may maintain such bank accounts with
any Lender and if no other Lender provides facilities to the
relevant Group Companies on normal commercial terms no worse than
those offered by other banks in the relevant market, the relevant
Group Companies may maintain such bank accounts with any bank
provided such bank has acknowledged the Security Interest over
the relevant accounts in accordance with the applicable Security
Documents (if any); and
(iii)save for facilities provided under the terms of the Finance
Documents, only carry on banking business with and obtain
unsecured overdraft and working capital facilities from banks
approved by the Facility Agent (acting reasonably).
(f) Repatriation of cash
Within 30 days of the end of each Management Accounting Period, to the
extent permitted by the laws of the relevant jurisdiction, the Parent
will procure that all cash balances in aggregate exceeding the
equivalent of $1,000,000 located outside of the Republic of Ireland,
the United States of America, England or the Cayman Islands and that
all cash balances of each Group Company which is not an Obligor
exceeding in aggregate $1,000,000 (or the equivalent thereof) in
respect of that Group Company are in each case, transferred to a bank
account of an Obligor in the Republic of Ireland, the United States of
America or England with any bank permitted under this agreement,
provided that this clause shall not apply where such excess cash
balances are reasonably required in the relevant jurisdiction for the
business (including working capital and Capital Expenditure) of the
relevant operation or where such repatriation would involve
significant cost to the Group provided further that no such transfer
will be required in respect of any amount if the transfer would breach
any applicable law (including, without limitation, any exchange
controls operating in the relevant jurisdiction).
(g) Guarantees and Security from Target and its Subsidiaries
The Parent will procure the delivery to the Security Agent within 21
days of the Unconditional Date of the following documents in the
agreed form duly executed and delivered by all parties thereto:
(i) an Accession Document in respect of Target and its Subsidiaries
listed in part 2 of Schedule 9 pursuant to which each such
company in the Target Group listed shall become a Guarantor (to
the extent it can do so pending satisfaction of the requirements
of s60 of the Irish Companies Act, 1963);
(ii) each Security Document listed against the name of such company in
part 2 of Schedule 9; and
(iii)an accession document to the Intercreditor Deed executed and
delivered by each company in the Target Group listed in part 2 of
Schedule 9,
together with, in respect of each Company listed in part 2 of Schedule
9, those documents set out in paragraphs 1, 2, 4, 5 and 6 of part 4 of
schedule 4 (save to the extent already provided).
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20.6 Conduct of business undertakings
(a) Insurance
(i) Each Obligor will, and will procure that each of its Subsidiaries
will, effect and maintain insurances at its own expense in
relation to all its assets and risks of an insurable nature with
insurers approved by the Facility Agent which:
(A) provide cover against all risks which are normally insured
against by other companies owning or possessing similar
assets or carrying on similar businesses (and the Parent
will, within 14 days of the Unconditional Date, provide the
Facility Agent with evidence that such insurances have been
taken out and are in full force and effect);
(B) be in amounts which would in the circumstances be prudent
for those companies; and
(C) have the interest of the Security Agent as mortgagee noted
on the policies (and the Parent will provide the Facility
Agent with evidence to this effect within 14 days of the
Unconditional Date),
and each Obligor will, and will procure that each of its
Subsidiaries will, use all reasonable endeavours to prevent any
acts, omissions or events of default occurring which render or
might render any material policies of insurance taken out by it
void or voidable.
(ii) The Parent will within 21 days after the Unconditional Date
effect and maintain Key Executive Policies for the benefit
of the Parent in relation to the death and disability of
each Key Executive to expire no earlier than 3 years after
the date of this agreement.
(iii) The Parent will:
(A) supply to the Facility Agent on request copies of each
policy for insurance required to be maintained in
accordance with clause 20.6(a)(i) or (ii) (the
"policies"), together with the current premium receipts
relating to the policies;
(B) promptly notify the Facility Agent of any material
change to the insurance cover of each Obligor and each
Obligor's subsidiaries; and
(C) promptly notify the Facility Agent of any claim under
any policy which is for, or is reasonably likely to
result in a claim under that policy for, an amount in
excess of $150,000 (or its equivalent in other
currencies).
(b) Intellectual Property
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) ensure that it beneficially owns or has all necessary consents to
use and, where applicable, is accorded as the registered
proprietor of all the Intellectual Property Rights that it
requires in order to conduct its business;
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(ii) observe and comply with all obligations and laws applicable to it
in relation to the Intellectual Property;
(iii) maintain and protect all Material Intellectual Property;
(iv) notify the Facility Agent as soon as it becomes aware of any new
Material Intellectual Property, or any Intellectual Property has
ceased to be Material Intellectual Property; and
(v) notify the Facility Agent as soon as it becomes aware of any
infringement, alleged infringement, claims or proceedings
relating to the Material Intellectual Property.
(c) Taxes
Each Obligor will, and will procure that each of its Subsidiaries
will, pay when due (or within any applicable time limit), all Taxes
imposed upon it or any of its assets, income or profits on any
transactions undertaken or entered into by it except in relation to
any bona fide tax dispute for which proper provision has been made in
its accounts.
(d) Pension schemes
(i) The Parent will:
(A) if requested by the Facility Agent, as soon as reasonably
practicable deliver to the Facility Agent any actuarial
reports in relation to the pension schemes for the time
being operated by Group Companies ("actuarial reports")
which are prepared in order to comply with then current
statutory or auditing requirements; and
(B) if requested by the Facility Agent, (acting reasonably) as
soon as reasonably practicable prepare actuarial reports and
deliver those to the Facility Agent, if the Facility Agent
(acting reasonably) believes that any relevant material
statutory or auditing requirement concerning funding levels
is not being complied with.
(ii) The Parent will ensure that all such pension schemes are funded
to the extent required by law based on reasonable actuarial
assumptions applicable in the jurisdiction in which the relevant
pension scheme is maintained.
(e) Arm's length transactions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, enter into any agreement or arrangement (except
with another Obligor) other than on an arm's length basis and (except
as permitted under this agreement) in the normal course of trading.
(f) Change of Control
Each member of the Group shall take all such steps as necessary to
ensure that all formalities relating to the change of control of
Target which occurs on the Unconditional Date are carried out,
(including without limitation) as set out in the agreements set out in
each of paragraphs set out below of Section 5 (Material Contracts) of
the Legal Due Diligence Report:
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Paragraph Agreement
2. (License and Distribution Agreement for Destination Math between
Riverdeep Interactive Learning Limited and Research Machines plc
dated 13 June 2000); and
4. (International Licence and Distribution Agreement by and between
Riverdeep Inc. and Test University Inc. dated 5 September 2002);
provided that, in relation to the Sonopress Contract, the relevant
member of the Group shall not be required to request consent to the
change of control.
(g) Indemnity Claims
Each member of the Group will take all steps considered by the
relevant member of the Group to be prudent and cost effective to
maximise the recovery under any warranties granted for the benefit of
such member of the Group.
20.7 Environmental undertakings
Each Obligor will, and each Obligor will procure that each of its
Subsidiaries will:
(a) comply with all Environmental Approvals and Environmental Laws
applicable to it where failure to do so is reasonably likely to have a
Material Adverse Effect;
(b) obtain and maintain all Environmental Approvals applicable to it where
failure to do so is reasonably likely to have a Material Adverse
Effect; and
(c) promptly upon receipt of the same notify the Facility Agent of any
claim, notice or other communication served on it in relation to:
(i) any Environmental Law or Environmental Approval applicable to it
or if it becomes aware of any actual or prospective material
variation to any Environmental Law or Environmental Approval; and
(ii) any material investment required to be made by any Group Company
to maintain, acquire or renew any Environmental Approval or if it
otherwise becomes aware of such a requirement.
20.8 Transaction Documents
(a) Changes to Transaction Documents
The Parent will not, and will procure that none of its Subsidiaries
will, agree to any amendment of any term of any Transaction Document
which would adversely affect the interests of any Finance Party under
the Senior Finance Documents.
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(b) Changes to Mezzanine Finance Documents
It will not agree to any amendment of any Mezzanine Finance Document
save as permitted by and in accordance with the Intercreditor Deed.
(c) Service Contracts
The Parent shall procure that the Target executes any Service Contract
not executed as at the date of this agreement no later than the
Unconditional Date.
20.9 Share capital, dividend and other junior financing arrangement undertakings
(a) Share issues
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, allot or issue any equity securities (as defined in
section 23 of the Irish Companies (Amendment) Act 1983) other than (a)
issues of shares by the Parent and (b) issues of shares by
Subsidiaries of the Parent to their direct Holding Company with
security granted over such securities in favour of the Security Agent
equivalent to that (if any) existing in respect of relevant securities
already issued by such Company and (c) any issue of Shares by Target
which shares (i) are issued after the date falling 18 months after the
Unconditional Date and (ii) are issued to satisfy the obligations of
Target under the TU Agreement provided that the Parent and the Target
have used all reasonable efforts to cash settle such obligations.
(b) Redemption and acquisition of own shares
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, directly or indirectly, redeem, purchase, retire or
otherwise acquire any shares or warrants issued by it or otherwise
reduce its capital other than (i) in favour of an Obligor or (ii) the
conversion of any A Ordinary Shares of US$0.01 in issue at the date of
this agreement into Deferred Redeemable Ordinary Shares of US$0.01
following the transfer of all shares owned or held by the Individual
Shareholders in Target immediately prior to the date of this agreement
and the subsequent redemption of up to 3,810,000 of such Deferred
Redeemable Ordinary Shares of US$0.01 from the proceeds of the Lead
Equity Investors subscribing for shares in the capital of the Parent.
(c) Restriction on payment of dividends
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, declare or pay, directly or indirectly, any
dividend or make any other distribution or pay any interest or other
amounts, whether in cash or otherwise, on or in respect of its share
capital or any class of its share capital or set apart any sum for any
such purpose, other than:
(i) by a Group Company to another Group Company which is its
immediate holding company; or
(ii) as permitted under the Intercreditor Deed.
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(d) Shareholder payments
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal of, or payment of
interest on, or any other payment with respect to any Investor Loan
Notes, or any other Equity Document, or any other shareholder loans to
the Parent, other than as permitted under the Intercreditor Deed.
(e) Payments to members
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any payment to its members by way of
management, royalty or similar fee unless, subject to the
Intercreditor Deed, that payment is provided under the original terms
of the Equity Documents or is in relation to services actually
provided on arm's length commercial terms or is otherwise permitted
under the Senior Finance Documents.
(f) Cash movement
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, be a party to any contractual or similar
restriction (except as set out in any Senior Finance Document) by
which any Group Company is prohibited from making loans, transferring
assets or making any payment of dividends, distributions of income or
other amounts to another Group Company or to the Senior Finance
Parties.
(g) Mezzanine Lenders
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal or payment of
interest or of any other amount under any Mezzanine Finance Document,
other than as permitted under the Intercreditor Deed.
(h) Alchemy Bridge Documents
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal or payment of
interest or of any other amount under any Alchemy Bridge Document,
other than as permitted under the Intercreditor Deed.
20.10 Information and accounting undertakings
(a) Defaults
Each Obligor will notify the Facility Agent forthwith upon becoming
aware of the occurrence of a Default and will from time to time on
request supply the Facility Agent with a certificate signed by any two
of its directors certifying that no Default has occurred and is
continuing or, if that is not the case, setting out details of any
Default which is outstanding and the action taken or proposed to be
taken to remedy it.
(b) Books of account and auditors
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) keep proper books of account relating to its business; and
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(ii) have as its auditors any one of Deloitte & Touche, Ernst & Young,
KPMG or PricewaterhouseCoopers (or such other firm as the
Facility Agent shall approve (such approval not to be
unreasonably withheld or delayed)).
(c) Financial statements
The Parent will deliver to the Facility Agent (with sufficient copies
for each of the Lenders):
(i) as soon as available, and in any event within 120 days after the
end of each Financial Year, copies of:
(A) the audited consolidated accounts of the Group as at the end
of and for that Financial Year, including a profit and loss
account, balance sheet, cash flow statement and directors
and auditors' report on those accounts; and
(B) the audited accounts of each Obligor for that Financial
Year;
(ii) as soon as available and in any event within 30 days from the end
of each Management Accounting Period after the Unconditional
Date:
(A) copies of the unaudited consolidated management accounts of
the Group (including information relating to each business
unit including, to the extent available, data by reference
to the top ten titles and by reference to sales channel
(provided that the Parent shall ensure such information is
available in respect of each Management Accounting Period
ending after the date falling 360 days after the
Unconditional Date)) as at the end of and for that
Management Accounting Period, including a profit and loss
account, balance sheet, cash flow statement (both on a
monthly and cumulative basis) and comparing actual
performance to forecasted performance as set out in the
Operating Budget, together with a management commentary for
the Group (including as to the reasons for any significant
adverse variance from the Operating Budget) and management
commentary on ongoing litigation of the Group; and
(B) an update of the projections contained in the most recent
Operating Budget delivered under clause 20.10(c)(iii),
in such form as the Parent and the Facility Agent shall agree;
and
(iii)no less than one month before the beginning of each Financial
Year, the Operating Budget for that Financial Year, in such form
as the Parent and the Facility Agent shall agree; and
(iv) within seven days of the Unconditional Date, a copy of the latest
unaudited consolidated monthly management accounts for the Target
Group,
which accounts (other than those delivered pursuant to paragraph
(iv)), Operating Budget and update to the Operating Budget shall, in
each case, have been approved by the finance director of the Parent.
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(d) Compliance certificates
(i) Each of the Annual Accounts and Monthly Accounts as at the end of
each Accounting Quarter must be accompanied by a certificate
signed by the finance director and one other director of the
Parent, which shall:
(A) certify whether or not, as at the date of the relevant
accounts, the Parent was in compliance with the financial
covenants contained in clause 20.13 (Financial covenants)
and contain reasonably detailed calculations acceptable to
the Facility Agent; and
(B) confirm that, as at the date of that certificate, no Default
is outstanding or, if that is not the case, set out details
of any Default which is outstanding and the action taken or
proposed to be taken to remedy it.
(ii) Each of the Annual Accounts must be accompanied by a certificate
from the Auditors which shall:
(A) be in a form acceptable to the Facility Agent; and
(B) demonstrate whether or not, as at the date of the relevant
Annual Accounts, the Parent was in compliance with the
financial covenants contained in clause 20.13 (Financial
covenants); and
(C) confirm the amount of Excess Cashflow (together with a
calculation of how that amount has been calculated) for the
purpose of clause 12.6 (Excess Cashflow).
(e) Approved Accounting Principles
All accounts of any Group Company delivered to the Facility Agent
under this agreement shall be prepared in accordance with the Approved
Accounting Principles and, in the case of Annual Accounts, in
compliance with the Irish Companies Acts 1963 to 2001. If there is a
change in the Approved Accounting Principles after the date of this
agreement:
(i) the Parent shall promptly advise the Facility Agent;
(ii) following request by the Facility Agent, the Parent and the
Facility Agent shall negotiate in good faith with a view to
agreeing any amendments to clauses 20.13 (Financial covenants)
and 20.14 (Financial definitions) which are necessary to give the
Lenders comparable protection to that contemplated by those
clauses at the date of this agreement;
(iii)if amendments satisfactory to the Majority Lenders are agreed by
the Parent and the Facility Agent, those amendments shall take
effect in accordance with the terms of that agreement; and
(iv) if amendments satisfactory to the Majority Lenders are not so
agreed then upon delivering any accounts pursuant to paragraph
(c) (i) or (ii) above the Parent shall either:
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(A) deliver to the Facility Agent, in reasonable detail and in a
form satisfactory to the Facility Agent, details of any
adjustments which need to be made to the relevant accounts
in order to bring them into line with the Approved
Accounting Principles as at the date of this agreement; or
(B) ensure that the relevant accounts are prepared in accordance
with the Approved Accounting Principles as at the date of
this agreement.
(f) Management meetings
The Facility Agent shall be entitled to call for meetings with the
senior management of the Parent twice in each Financial Year to
discuss financial information delivered under clause 20.10(c)
(Financial statements) on reasonable prior notice and at times
reasonably convenient to the senior management of the Parent.
(g) Accounting reference date
(i) Except pursuant to (iii) below, the Parent shall not change its
Financial Year end without the prior consent of the Facility
Agent.
(ii) To the extent permitted by applicable law in any jurisdiction
outside the UK in which each relevant Subsidiary is incorporated,
the Parent shall procure that the financial year end of each of
its Subsidiaries is the same as the Financial Year end.
(iii)The Parent shall, and shall procure that each Subsidiary shall,
change its Financial Year end to 31 December within 30 days of
the Unconditional Date.
(h) Investigations
(i) If the Majority Lenders have reasonable grounds for believing
that either:
(A) any accounts or calculations provided under this agreement
are inaccurate or incomplete in any material respect; or
(B) the Parent is, in breach of any of its obligations under
clause 20.13 (Financial covenants),
then the Parent will at its own expense, if so required by the
Facility Agent, instruct the Auditors (or other firm of
accountants selected by the Facility Agent) to discuss the
financial position of the Group with the Facility Agent and to
disclose to the Facility Agent and the Lenders (and provide
copies of) such information as the Facility Agent may reasonably
request regarding the financial condition and business of the
Group.
(ii) If, having taken the steps in (i) above, the Majority Lenders
request, the Facility Agent may instruct the Auditors (or other
firm of accountants selected by the Facility Agent) to carry out
an investigation at the Parent's expense into the affairs, the
financial performance and/or the accounting and other reporting
procedures and standards of the Group, and the Parent will
procure that full co-operation is given to the Auditors or other
firm of accountants so selected. If in any one calendar year more
than one such investigation is carried out and each reveals no
such inaccuracy or breach then the Parent shall only be liable
for the costs of the first such investigation
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(i) Other information
The Parent will promptly deliver to the Facility Agent for
distribution to the Lenders:
(i) details of any litigation, arbitration, administrative or
regulatory proceedings relating to it or any of its Subsidiaries
involving a potential liability for the Group of at least
$500,000;
(ii) details of any material labour dispute affecting it or any of its
Subsidiaries;
(iii)at the same time as it is sent to its creditors, any other
document or information sent to any class of its creditors
generally (excluding for this purpose creditors which are Group
Companies);
(iv) any other information relating to the financial condition or
operation of any Group Company which the Facility Agent may from
time to time reasonably request;
(v) details of any breach of the provisions of any Transaction
Document of which it is aware;
(vi) notice of the receipt of any notice to terminate the Sonopress
Contract from the counterparty thereto or notice served to
terminate the Sonopress Contract; and
(vii)copies of any notice given or received under the Transaction
Documents.
(j) Access
Upon reasonable notice being given by the Facility Agent, if there are
reasonable grounds for believing a Default has occurred or is
imminent, the Parent will procure that any one or more representatives
of the Facility Agent or other professional advisers appointed by the
Facility Agent are allowed to have access during normal business hours
to the assets, books and records of each member of the Group, and are
able to inspect and copy the same.
20.11 Offer undertakings
The Parent will
(a) Press release:
(i) issue the Press Release within two Business Days of the date of
this agreement and the Second Press Release by the close of
business on the Business Day following the day on which the
pre-conditions in Appendix 1 of the Press Release have been
satisfied; and
(ii) not waive or amend any pre-condition to the offer contained in
the Press Release (or exercise any discretion or give any consent
under any pre-condition to the Offer);
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(b) Offer document:
(i) despatch the Offer Document as soon as practicable and in any
event within 28 days of issuing the Press Release; and
(ii) despatch the Offer Document containing substantially similar
terms and subject to the same conditions as set out in the Press
Release (save to the extent then satisfied).
(c) Progress of Offer: keep the Facility Agent informed as to the progress
of the Offer and any material developments in relation to the Offer
and promptly on request provide the Facility Agent with any
information or advice received in relation to the Offer.
(d) Announcements:
(i) promptly deliver to the Facility Agent, copies of all press and
other announcements made by the Parent or by the Target in
connection with or in relation to the Offer and any documents or
statements issued by the Panel, the Minister for Enterprise,
Trade and Employment, the Competition Commission, the Competition
Authority or the U.S. Department of Justice, the U.S. Federal
Trade Commission or, the U.S. Securities and Exchange Commission
or any other regulatory authority in relation to the Offer;
(ii) where any announcement, press release or publicity material
refers to the Group or the Facility Agent or any other Finance
Party or the Facilities, not release or permit such announcement,
press release or publicity material to be released until the
Parent and the Facility Agent has each given its consent to such
release (such approval not to be unreasonably withheld and to be
given or refused within 24 hours of receipt by the Parent or the
Facility Agent (as the case may be) of the relevant material)
provided that no such consent or approval will be required for
the Facility Agent or the Lenders or the Parent to make an
announcement required to be made to comply with any relevant laws
or regulation or requirements of the Panel or the Irish Stock
Exchange Limited, the Irish Companies Registration Office or the
U.S. Securities and Exchange Commission or any other applicable
regulatory or other authority (subject to these parties using all
reasonable endeavours to consult with each other prior to making
the announcement).
(e) Conduct of Offer:
Ensure that the Press Release, the Second Press Release, the Offer
Documents, all other documents issued by it or on its behalf in
connection with the Offer and its conduct of the Offer comply in all
material respects with all applicable laws and regulations (including
the requirements of the Code, the Irish Companies Act, 1963 and the
Listing Rules of the Irish Stock Exchange Limited) and that as and
when necessary all material consents from all governmental and other
regulatory authorities required in connection with the Offer are
obtained, maintained and/or renewed as appropriate and that all its
obligations in connection with the Offer are performed in all material
respects.
(f) Offer Terms:
(i) not increase the amount payable by it in respect of the Target
Shares pursuant to the Offer or otherwise vary the consideration
payable pursuant to the Offer without the prior written consent
of the Lenders;
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(ii) not extend the Offer beyond 60 days from the date on which the
Offer Document is posted;
(iii)not take any action (and procure to the extent it is able that
no person acting in concert with it takes any action) which will
result in it becoming obliged to make an offer to shareholders in
the Target under Rule 9 of the Code;
(iv) not waive or amend any condition of the Offer (or exercise any
discretion or give any consent under any Offer Document) except:
(A) if required by the Panel, the Code, the Listing Rules of the
Irish Stock Exchange Limited or any other applicable law or
regulation with binding effect;
(B) where the Panel will not allow the relevant condition to be
invoked; or
(C) with the prior written consent of the Facility Agent;
(v) notwithstanding (iv) above, unless the Lenders otherwise agree,
not declare the Offer unconditional as to acceptances until valid
acceptances by shareholders of the Target have been received (and
not, where permitted, withdrawn) in respect of an aggregate
amount of not less than 80% of the shares to which the Offer
relates;
(vi) notwithstanding (iv) above, unless the Lenders otherwise agree,
not declare the Offer unconditional in all respects until valid
acceptances have been received (and not, where permitted,
withdrawn) from not less than 75 per cent. of the holders of the
shares to which the Offer relates calculated by reference to each
of the following dates:
(A) the date of despatch of the Offer Document to holders of the
Shares in the Target to which the Offer relates; and
(B) the date on which the condition requiring valid acceptances
by shareholders of Target in respect of an aggregate amount
of not less than 80 per cent. of the Shares to which the
Offer relates is satisfied; and
(C) the date on which the Offer ceases to be open for
acceptance.
(g) Purchase of remaining Target Shares: Promptly following the
Unconditional Date use its best endeavours (which shall not include an
obligation to purchase Target Shares at a price higher than in the
Offer) to acquire all the issued share capital of the Target as soon
as reasonably practicable. Without limiting the foregoing, the Parent
will promptly after becoming entitled to do so, exercise its rights
under section 204(1) of the Irish Companies Act, 1963 and ensure that
notices under that section are despatched within 7 Business Days of
the Parent being entitled to despatch such notices.
(h) Take private procedure and provision of Target security: Use its best
endeavours to re-register the Target as a private company pursuant to
section 14 of the Irish Companies (Amendment) Xxx 0000 as soon as
practicable after the Unconditional Date, to de-list its shares and to
procure that the Target Group Companies identified in part 2 of
Schedule 9 and incorporated in the Republic of Ireland (provided that
such action is not prohibited by law or
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if prohibited by law, in the reasonable opinion of the Facility Agent
such prohibition is not capable of being lawfully overcome) enter into
the Guarantee Increase Deed as soon as practicable thereafter and to
ensure that:
(i) the Guarantee Increase Deed to be provided by the relevant Target
Companies listed in part 2 of schedule 9 and incorporated in the
Republic of Ireland is provided no later than 90 days from the
Unconditional Date;
(ii) prior thereto, the relevant Target Companies enter into the
Financial Assistance Documents and otherwise comply with the
provisions of section 60 of the Irish Companies Act, 1963 in all
respects; and
(iii)the Hedging Guarantee and Debenture to be provided by the
relevant Target Companies listed in part 3 of schedule 9 is
provided no later than 90 days from the Unconditional Date.
Notwithstanding any other rights of the Finance Parties, if the
Guarantee Increase Deed is not entered into by any relevant Target
Company within the period specified in clause 20.11(h)(i) above, the
Facility Agent (acting on the instructions of the Majority Lenders)
shall be entitled to require the Parent to take such action as the
Facility Agent may reasonably require to mitigate the effects of such
failure, including, without limitation, switching all or any part of
the Term Facilities into Target and/or its Subsidiaries by requiring
upstream dividends to be paid by Target (and/or its Subsidiaries) to
the Parent (provided in each case that such action is not prohibited
by law). By executing each relevant Security Document, each Group
Company shall be deemed to have irrevocably appointed the Facility
Agent as its attorney for such purposes.
20.12 US
(a) ERISA
(i) No Group Company will, and each Group Company will procure that
none of its Subsidiaries will, have any Unfunded Liabilities for
any and all Plans maintained for or covering employees of any
Group Company or its Subsidiaries which would have a Material
Adverse Effect.
(ii) As soon as possible, and in any event within thirty (30) days,
after any Group Company knows or has reason to know that any
Group Company will or has become party to any Multiemployer Plan,
such Group Company will deliver to the Facility Agent a statement
setting forth the full details as to such occurrence.
(b) Margin Stock
No Obligor will use any proceeds of any Advance for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying
any "Margin Stock" (within the meaning of Regulation T, U or X of the
Board of Governors of the Federal Reserve System of the United States
of America).
20.13 Financial covenants
The Parent undertakes that it will procure that:
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(a) Interest cover
The ratio of EBITA to Total Interest Payable for each Testing Period
ending on a Testing Date set out in the table below shall not be less
than the ratio set out in the table below opposite that Testing Date:
Date Ratio
30 June 2003 2.30:1
30 September 2003 3.55:1
31 December 2003 4.15:1
31 March 2004 4.25:1
30 June 2004 4.55:1
30 September 2004 4.75:1
31 December 2004 4.90:1
31 March 2005 5.00:1
30 June 2005 5:10:1
30 September 2005 5.25:1
31 December 2005 5.45:1
31 March 2006 5.65:1
30 June 2006 5.90:1
30 September 2006 6.20:1
31 December, 31 March, 30 June and 30 September in each 6.50:1
year thereafter
(b) Leverage Ratio
At any time, the ratio of Total Debt, as tested as at each Testing
Date set out in the table below to EBITA for the Testing Period ending
on that Testing Date shall not exceed the ratio set out in the table
below opposite that Testing Date:
Date Ratio
30 June 2003 3.80:1
30 September 2003 4.10:1
31 December 2003 3.90:1
31 March 2004 3.75:1
30 June 2004 3.40:1
30 September 2004 3.35:1
31 December 2004 3.15:1
31 March 2005 3.15:1
30 June 2005 2.95:1
30 September 2005 2.95:1
31 December 2005 2.70:1
31 March 2006 2.70:1
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Date Ratio
30 June 2006 2.45:1
30 September 2006 2.45:1
31 December 2006 2.15:1
31 March, 30 June, 30 September and 31 December in each
year thereafter 2.00:1
(c) Cashflow Cover
The ratio of Cashflow to Total Debt Service for each Testing Period
ending on a Testing Date set out in the table below shall not be less
than the ratio set out in the table below opposite that Testing Date:
Date Ratio
30 June 2003 1.00:1
30 September, 31 December, 31 March and 30 June in each 1.00:1
year thereafter
(d) Capital Expenditure
(i) Subject to paragraph (ii) below, the Group shall not, in any
Financial Year incur Capital Expenditure in excess of 115 per
cent of the budgeted Capital Expenditure for that Financial Year
set out in the Operating Budget in respect of that Financial
Year.
(ii) If the Capital Expenditure incurred in any Financial Year is less
than 115 per cent of the budgeted Capital Expenditure for that
Financial Year set out in the Operating Budget in respect of that
Financial Year then the shortfall (up to 10 per cent. of the
applicable limit) may be carried forward to the subsequent
Financial Year but no further.
20.14 Financial definitions
For the purposes of clause 20.13 (Financial covenants) and clause 8.6
(Margin Adjustment);
"Cash" means cash at bank credited to an account in the name of a Group
Company with a Lender or an Eligible Lender and to which that Group Company
is beneficially entitled which is repayable on demand (or within 30 days of
demand) without condition;
"Cash Equivalents" means marketable debt securities with a maturity of
three months or less and with a short term debt rating of at least A1 +
granted by Standard and Poors Corporation or Pl granted by Xxxxx'x
Investors Services, Inc. to which a Group Company is beneficially entitled,
and which can be promptly realised by that Group Company without condition;
"Cashflow" means EBITDA for the relevant Testing Period:
(a) plus the amount of any decrease or minus the amount of any increase in
Working Capital during that Testing Period;
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(b) plus any Tax rebate received in cash, or minus any Tax paid in cash,
during that Testing Period;
(c) minus all Capital Expenditure paid during that Testing Period (and for
the avoidance of doubt excluding Capital Expenditure in respect of
finance leases and hire purchase contracts);
(d) [intentionally left blank];
(e) including any exceptional item within the meaning of FRS3 paid or
received in cash during that Testing Period, which shall include for
the avoidance of doubt:
(i) any restructuring provisions on the consolidated balance sheet of
Target as at 30 September 2002 (to the extent included in the
Accountants' Report) to the extent released during such Testing
Period;
(ii) any cash payment by Target to Teachers Universe Inc. and/or TU
SUB LLC during that Testing Period in settlement of obligations
of Target arising under the TU Agreement; and
(iii)all reasonable costs incurred in connection with any litigation,
arbitration or administrative proceedings commenced by or against
any Obligor or Material Subsidiary to the extent paid during that
Testing Period,
in each case to extent not already taken account of in EBITDA;
(f) plus the amount of any dividends or other profit distributions (net of
Tax) received in cash by any Group Company during that Testing Period
from companies which are not Group Companies;
(g) minus the amount of any dividends or other profit distributions paid
by the Parent during that Testing Period;
(h) minus the amount of any profit of any Subsidiary of the Parent taken
into account in EBITA for that Testing Period which, whether by law or
for any other reason, cannot be distributed by way of dividend, loan
or other means to the Parent; and
(i) minus, to the extent included, any Offer Costs in excess of
$33,000,000.
"EBITA" means the consolidated profit of the Group for the relevant Testing
Period:
(a) before any deduction of corporation tax or other Taxes on income or
gains;
(b) before any deduction for Interest Payable;
(c) after deducting (to the extent otherwise included) Interest
Receivable;
(d) after adding back or deducting, as the case may be, the amount of any
loss or gain against book value arising on a disposal of any fixed
asset (other than stock disposed of in the ordinary
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course of trading) during that Testing Period, to the extent included
in arriving at EBITA for that Testing Period;
(e) before deducting amortisation of any goodwill or impairment of any
intangible assets;
(f) after deducting any depreciation on fixed assets;
(g) after deducting the regular pension service cost;
(h) including items which would be regarded as exceptional items within
the meaning of FRS3 during the period to which such accounts relate;
(i) excluding any non-cash costs incurred in connection with the issuing
options pursuant to the Share Option Scheme;
(j) excluding any amount amortised against, or charged to, the Group's
profit and loss account during such Testing Period in respect of Offer
Costs in an aggregate amount not exceeding $33,000,000; and
(k) excluding all extraordinary items.
"EBITDA" means EBITA for the relevant Testing Period, after adding back
depreciation during that Testing Period, to the extent deducted in
calculating EBITA;
"Eligible Lender" means any bank or financial institution with a short term
rating of at least A1 granted by Standard and Poors Corporation or P1
granted by Xxxxx'x Investors Services, Inc.;
"Interest" means interest and amounts in the nature of interest paid or
payable in relation to any Financial Indebtedness including:
(a) the interest element of finance leases;
(b) discount and acceptance fees payable (or deducted) in relation to any
Financial Indebtedness;
(c) fees payable in connection with the issue or maintenance of any bond,
letter of credit, guarantee or other assurance against financial loss
which constitutes Financial Indebtedness and is issued by a third
party on behalf of a Group Company;
(d) repayment and prepayment premiums payable or incurred in repaying or
prepaying any Financial Indebtedness; and
(e) commitment, utilisation and non-utilisation fees payable or incurred
in relation to Financial Indebtedness (but excluding commitment fees
payable pursuant to clause 16.3 and arrangement fees payable pursuant
to clause 16.1);
"Testing Date" means the date specified in the relevant table as the date
as at (or to) which a particular financial ratio is being tested;
"Testing Period" means subject to clause 20.16(a) (Calculation adjustments)
each period which corresponds to the annual accounting reference period of
the Parent or four consecutive Accounting Quarters and ending on or about a
Testing Date;
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"Total Debt" means, at any time, the aggregate outstanding principal or
capital amount of all Financial Indebtedness of the Group (excluding any
Financial Indebtedness outstanding under the Investor Loan Notes at such
time) calculated on a consolidated basis less Cash and Cash Equivalents
owned by the Group which can be applied to discharge the obligations of
Companies in relation to Total Debt Service without restriction and without
breaching any law or exchange control regulation and without incurring any
Tax or other costs and which is or are held in an account of a Lender
and/or which is or are charged in favour of the Security Agent pursuant to
a Security Document in an aggregate amount no greater than the aggregate
Revolving Facility outstanding at such time, except that:
(a) in the case of any finance lease only the capitalised value of that
finance lease (as determined in accordance with the Approved
Accounting Principles) shall be included; and
(b) in the case of any guarantee referred to in the definition of
Financial Indebtedness in clause 1.1 (Definitions), the amount of that
guarantee shall not be included, to the extent it relates to
indebtedness of another Group Company already included in the
calculation of Total Debt;
"Total Debt Service" means the aggregate of:
(a) Total Interest Payable for the relevant Testing Period; and
(b) all scheduled repayments of principal under the terms of any Financial
Indebtedness of any Group Company (excluding any Financial
Indebtedness between any Group Company and any other Group Company)
falling due during that Testing Period:
(i) including all capital payments falling due in relation to any
finance leases and other Financial Indebtedness falling within
paragraph (g) of the definition of Financial Indebtedness in
clause 1.1 (Definitions); and
(ii) excluding any repayment or prepayment of any overdraft or
revolving credit facility falling due during that period and
capable of being simultaneously redrawn under the terms of the
relevant facility; and
(iii) excluding all performance bonds and guarantees;
"Total Interest Payable" means the total of:
(a) Interest accrued (whether or not paid or capitalised) during the
relevant Testing Period; and
(b) the amount of the discount element of any Financial Indebtedness
amortised during that Testing Period;
as an obligation of any Group Company during that period and adjusted for
amounts payable and receivable under Hedging Instruments and excluding
interest accruing on the Investor Loan Notes and the Mezzanine Facility to
the extent not paid in cash but capitalised; and
"Working Capital" means trade and other debtors in relation to operating
items of any Group Company, plus prepayment and stock, less trade and other
creditors in relation to operating items of
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any Group Company (but not in relation to Financial Indebtedness or
Taxation) and less accrued expenses and accrued costs of any Group Company.
20.15 Calculation
(a) The covenants contained in clause 20.13 (Financial covenants) will be
tested by reference to the Quarterly Accounts for the relevant
Accounting Quarters, unless the Annual Accounts for all or any part of
the relevant period are available on the relevant date on which any
such covenant is tested, in which case those Annual Accounts shall be
used instead.
(b) If the Annual Accounts are not available when any covenant referred to
in clause 20.15(a) is tested, but when those Annual Accounts become
available, they show that the figures in any relevant Quarterly
Accounts utilised for any such calculation cannot have been
substantially accurate, the Facility Agent may require such
adjustments to the calculations made or to be made which it, in its
sole discretion, considers appropriate to rectify that inaccuracy and
compliance with the covenants in clause 20.13 (Financial covenants)
will be determined by reference to those adjusted figures.
(c) The components of each definition used in clause 20.13 (Financial
covenants) will be calculated in accordance with the Approved
Accounting Principles, as varied by this agreement.
20.16 Calculation adjustments
(a) For the purpose of determining compliance with the financial covenants
in clause 20.13(a) (Interest cover), 20.13(b) (Leverage Ratio) and
20.13(c) (Cashflow Cover) if the Group acquires a company or companies
(having obtained any necessary consent under this agreement to do so),
until the first Testing Date which falls more than 12 months after the
relevant company or companies became Subsidiaries of the Parent, the
results of such company or companies will be deemed included with
those of the rest of the Group for the full duration of the relevant
Testing Period as if such company or companies had become a Group
Company at the commencement of the Testing Period. Any necessary
aggregation of their results will (if required by the Facility Agent
(acting reasonably)) be confirmed by the Auditors and will not include
any synergy benefits expected to be achieved as a result of the
acquisition of such company or companies;
(b) For the purpose of the financial covenants in clauses 20.13(a)
(Interest cover) and 20.13(c) (Cashflow Cover), the Testing Periods
ending less than 12 months after the Unconditional Date shall be
deemed to commence on the Unconditional Date and end on the relevant
Testing Date.
(c) For the purpose of determining compliance with the financial covenants
in clause 20.13(b) (Leverage Ratio), EBITA for the Testing Period
ending on each Testing Date set out below shall be calculated as
follows:
(i) in respect of the Testing Period ending on 30 June 2003, EBITA
for such Testing Period shall be the aggregate of EBITA for the
three month period ended 30 June 2003 plus $36,541,000;
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(ii) in respect of the Testing Period ending on 30 September 2003
EBITA for such Testing Period shall be the aggregate of EBITA for
the six month period ended 30 September 2003 plus $21,741,000;
and
(iii)in respect of the Testing Period ending on 31 December 2003
EBITA for such Testing Period shall be the aggregate of EBITA for
the nine month period ended 31 December 2003 plus $9,241,000.
provided that for this purpose EBITA in respect of any period prior to
the Unconditional Date shall be calculated as if the reference to
Group in the definition of EBITA was a reference to the Target Group.
(d) For the purpose of determining compliance with the financial
covenants in clauses 20.13 (a) (Interest cover) and 20.13(b)
(Leverage ratio), EBITA for the relevant Testing Period shall be
adjusted to include any reasonable costs incurred in connection
with any litigation, arbitration or administrative proceedings
commenced by or against any Obligor or Material Subsidiary to the
extent included in EBITA during such Testing Period provided that
the maximum aggregate amount added back in accordance with this
clause 20.16(d) shall be $1,400,000 less the aggregate amount of
all such costs added back in all previous Testing Periods
counting the same only once.
21. EVENTS OF DEFAULT
21.1 List of events
Each of the events set out in this clause 21.1 constitutes an Event of
Default, whether or not the occurrence of the event concerned is outside
the control of any Group Company.
(a) Payment default
Any Obligor fails to pay on the due date any amount payable by it
under any Senior Finance Document at the place at which and in the
currency in which it is expressed to be payable, unless the Facility
Agent is satisfied that non-payment is due solely to administrative or
technical delays in the transmission of funds and payment is made
within three Business Days of its due date.
(b) Breach of other obligations
(i) Any Obligor fails to comply with any of its obligations under
clauses 20.3 (Disposals and Security Undertakings) to 20.5
(Financing arrangement undertakings) (inclusive), sub-clauses
(a), (b), (e), (f), (g) or (h) of clause 20.11 (Offer
Undertakings) or clause 20.13 (Financial covenants).
(ii) Any Obligor fails to comply with any of its obligations under any
Senior Finance Document, other than those specified in clause
21.1(a) (Payment default) or clause 21.1(b)(i) and, if that
failure is capable of remedy, it is not remedied within 10
Business Days of the earlier of:
(A) the Facility Agent notifying the Parent of that default; and
(B) that Obligor becoming aware of the relevant matter.
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(c) Misrepresentation
Any representation, warranty or statement which is made by any Obligor
in any Senior Finance Document or is contained in any certificate,
statement or notice provided under or in connection with any Senior
Finance Document is incorrect in any respect when made (or when deemed
to be made or repeated) and, if the circumstances giving rise to that
default are in the opinion of the Facility Agent capable of remedy,
they are not remedied within 10 Business Days of the earlier of:
(i) the Facility Agent notifying the Parent of that default; and
(ii) that Obligor becoming aware of the relevant matter.
(d) Invalidity and unlawfulness
(i) Any provision of any Senior Finance Document is or becomes
invalid or unenforceable for any reason or is repudiated or the
validity or enforceability of any provision of any Senior Finance
Document is contested by any person (other than a Finance Party)
or any party to any Senior Finance Document other than a Finance
Party denies the existence of any liability or obligation on its
part under any Senior Finance Document.
(ii) It is or becomes unlawful under any applicable jurisdiction for
any Obligor to perform any of its obligations under any Senior
Finance Document in circumstances or to an extent which could
reasonably be expected to have a Material Adverse Effect.
(iii)Any act, condition or thing required to be done, fulfilled or
performed in order to:
(A) enable any Obligor lawfully to enter into, exercise its
rights under and perform the obligations expressed to be
assumed by it under any Senior Finance Document to which it
is party;
(B) ensure that the obligations expressed to be assumed by any
Obligor under any Senior Finance Document to which it is
party are legal, valid and binding;
(C) make each Senior Finance Document admissible in evidence in
the courts of England; and
(D) create the security constituted by the Security Documents to
which any Obligor is party,
is not done, fulfilled or performed.
(e) Insolvency
(i) Any Obligor or Material Subsidiary stops or suspends or
threatens, or announces an intention to stop or suspend, payment
of its debts.
(ii) Any Obligor or Material Subsidiary is, for the purpose of or any
other applicable law, deemed to be unable, or admits its
inability, to pay its debts as they fall due or
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becomes insolvent or a moratorium is declared in relation to any
indebtedness of any Obligor or Material Subsidiary.
(f) Receivership, examination and administration
(i) Any encumbrancer takes possession of, or a receiver, examiner or
administrator or similar officer is appointed over or in relation
to, all or any part of the assets of any Obligor or Material
Subsidiary.
(ii) A petition is presented, a meeting is convened, an application is
made or any other step is taken for the purpose of appointing an
administrator, examiner or receiver or other similar officer of,
or for the making of an administration order or an examination
order in relation to any Obligor or Material Subsidiary and:
(A) (other than in the case of a petition to appoint an
administrator or examiner) such petition or application is
not discharged within 10 days; or
(B) in the case of a petition to appoint an administrator or
examiner, the Facility Agent is not satisfied that it will
be discharged before it is heard.
(iii) Any US Obligor shall:
(A) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or
liquidator of itself or of all or a substantial part of its
property;
(B) make a general assignment for the benefit of its creditors;
(C) commence a voluntary case under the US Bankruptcy Code (or
any successor thereof), as amended;
(D) file a petition with respect to itself seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganisation, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts; or
(E) take any corporate action for the purpose of effecting any
of the foregoing with respect to itself.
(g) Compositions and arrangements
(i) Any Obligor or Material Subsidiary convenes a meeting of its
creditors generally or proposes or makes any arrangement or
composition with, or any assignment for the benefit of, its
creditors generally.
(ii) Any Obligor or Material Subsidiary proposes or enters into any
negotiations for or in connection with the rescheduling,
restructuring or re-adjustment of any Financial Indebtedness by
reason of, or with a view to avoiding, financial difficulties.
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(h) Winding up
(i) Any meeting of an Obligor or a Material Subsidiary is convened
for the purpose of considering any resolution for (or to petition
for) its winding up or any Obligor or Material Subsidiary passes
such a resolution.
(ii) A petition is presented for the winding up of an Obligor or
Material Subsidiary (other than a frivolous or vexatious petition
discharged within 10 days of being presented) or an order is made
for the winding up of any Obligor or Material Subsidiary.
(iii)In respect of any US Obligor, a proceeding or case shall be
commenced, without the application or consent of such US Obligor,
in any court of competent jurisdiction, seeking:
(A) (other than in connection with a solvent reorganisation or
dissolution, the terms of which have been approved by the
Majority Lenders) its reorganisation, dissolution,
liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its or his debts;
(B) the appointment of a receiver, custodian, trustee, examiner,
liquidator or the like of the US Obligor or of all or any
substantial part of its property; or
(C) similar relief in respect of the US Obligor under any law
relating to the bankruptcy, insolvency, reorganisation,
winding-up, or composition or adjustment of debts and any
such proceeding or case referred to in clauses (A), (B) or
(C) above shall continue undismissed, or an order, judgment
or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period
of 14 or more days, or an order for relief against the US
Obligor shall be entered in an involuntary case under Title
11 of the US Bankruptcy Code (or any successor thereto), as
amended.
(i) Attachment or process
A creditor attaches or takes possession of, or a distress, execution,
sequestration or other process is levied or enforced upon or sued out
against all or any part of the assets of any Obligor or Material
Subsidiary and such process is not discharged within 10 Business Days.
(j) Suspension of payments
Any order is made, any resolution is passed or any other action is
taken for the suspension of payments, protection from creditors or
bankruptcy of any Obligor or Material Subsidiary.
(k) Similar events elsewhere
There occurs in relation to any Obligor or Material Subsidiary or any
of its assets in any country or territory in which it is incorporated
or carries on business or to the jurisdiction of whose courts it or
any of its assets is subject any event which appears to the Facility
Agent (acting reasonably) to correspond in that country or territory
with any of those mentioned in clauses 21.1(e) (Insolvency) to 21.1(j)
(Suspension of payments) (inclusive).
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(l) Cessation of business
Any Obligor or Material Subsidiary ceases, or threatens or proposes to
cease, to carry on all or a substantial part of its business.
(m) Compulsory acquisition
All or any part of the assets of any Obligor or Material Subsidiary
are seized, nationalised, expropriated or compulsorily acquired by, or
by the order of, any central or local governmental authority in a way
which, in the reasonable opinion of the Majority Lenders, is
reasonably likely to lead to a Material Adverse Effect.
(n) Security Interests
Any Security Interest affecting the business, undertaking or any of
the assets of a Group Company and securing indebtedness exceeding
$100,000 (or its equivalent in other currencies) in aggregate becomes
enforceable, whether or not steps are taken to enforce the same.
(o) Cross default
Any Financial Indebtedness of any Group Company exceeding $100,000 (or
its equivalent in other currencies) in aggregate:
(i) is not paid when due or within any originally applicable grace
period in any agreement relating to that Financial Indebtedness;
or
(ii) becomes due and payable (or capable of being declared due and
payable) before its normal maturity or is placed on demand (or
any commitment for any such indebtedness is cancelled or
suspended) by reason of a default or event of default (however
described).
(p) Mezzanine Loan Default
Any Event of Default (as defined in the Mezzanine Loan Agreement)
occurs under the Mezzanine Loan Agreement.
(q) Litigation
Any litigation, arbitration or administrative proceeding is commenced
by or against any Obligor or Material Subsidiary which is reasonably
likely to be adversely determined against the relevant Group Company
and if so resolved could reasonably be expected, individually or when
considered together with any other litigation, arbitration or
administrative proceeding which is reasonably likely to be adversely
determined, to result in a liability to the Group in excess of
$10,000,000 (or its equivalent) (in aggregate) unless the Facility
Agent (acting on the instructions of the Majority Lenders) confirms
that the Majority Lenders agree that such litigation, arbitration or
administrative proceedings taken as a whole if so adversely determined
could not reasonably be expected to have a Material Adverse Effect.
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(r) Intercreditor breach
Any party to the Intercreditor Deed (other than any of the Finance
Parties) fails to comply with its obligations under the Intercreditor
Deed or the Intercreditor Deed ceases to be binding upon any such
party for whatever reason.
(s) Regulatory proceedings
Any regulatory or other proceedings are instigated by any competition
or similar authority (including the Minister for Enterprise, Trade and
Employment, the Competition Authority, The Office of Fair Trading, the
Competition Commission, or the European Commission, the U.S.
Department of Justice and the U.S. Federal Trade Commission) as a
result of the Transaction Documents having been entered into or
implemented and the same has, or is reasonably likely to have, a
Material Adverse Effect.
(t) Auditors' qualification
The Auditors qualify their report on any Annual Accounts in any manner
which, in the reasonable opinion of the Majority Lenders, is material
and adverse in the context of the Senior Finance Documents.
(u) Key Executive
Any Key Executive:
(i) ceases to be a full-time employee and director of the Parent
devoting the time and attention to the affairs of the Group
required by the terms of the applicable service contract;
(ii) dies; or
(iii)becomes unable (for whatever reason) adequately to carry out the
functions required to be performed by that Key Executive by the
terms of the applicable service contract,
and in any such event a replacement for that Key Executive has not
been appointed (following consultation with the Lenders) within six
months of such event or, having been so appointed within six months,
has not taken up employment within six months of appointment but no
later than nine months from the date of such event (or such other
period as may be agreed with the Majority Lenders (acting
reasonably)).
(v) ERISA
The occurrence of one or more of the following events which would
individually or in the aggregate have a Material Adverse Effect:
(i) a Reportable Event;
(ii) any Plan has Unfunded Liabilities; and
(iii)a Group Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or
IV of ERISA or the penalty or
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excise tax provisions of the IR Code relating to employee benefit
plans as defined in Section 3 of ERISA.
(w) Material adverse change
At any time there occurs any event or omission which has a Material
Adverse Effect.
(x) Sonopress Contract
The Sonopress Contract is terminated or otherwise ceases to be in full
force and effect unless the Parent certifies on or prior to the date
which is 30 days prior to such termination or expiry becoming
effective that it has been replaced by one or more contracts and the
terms of such replacement contract or contracts will not have a
material adverse effect on the business, assets, financial condition
prospects or operations of the Group (taken as a whole) (such
certification to include supporting evidence).
(y) Security
On the date falling 365 days after the Unconditional Date any member
of the Target Group incorporated in the Republic of Ireland and named
in schedule 9 has failed to execute a Guarantee Increase Deed or any
Security Document set out in schedule 9 to be executed by such member
of the Target Group or has failed to enter into the Financial
Assistance Documents or otherwise comply with the provisions of
section 60 of the Irish Companies Act, 1963 in all respects in
relation to such Security Documents.
21.2 Cancellation and repayment
At any time after the occurrence of an Event of Default which is
continuing, the Facility Agent may, and will if so directed by the Majority
Lenders, by notice to the Parent do all or any of the following, in
addition and without prejudice to any other rights or remedies which it or
any other Finance Party may have under any other Senior Finance Document:
(a) terminate the availability of the Facilities, whereupon the Facilities
shall cease to be available for drawing, the undrawn portion of the
Commitments of each of the Lenders shall be cancelled and no Lender
shall be under any further obligation to make Advances or issue Bank
Guarantees; and/or
(b) declare all or any Advances, accrued interest on those Advances and
any other amounts then payable under any Senior Finance Document to be
immediately due and payable, whereupon those amounts shall become so
due and payable; and/or
(c) declare all or any Advances to be payable on demand, whereupon those
Advances shall become payable on demand; and/or
(d) require the provision of cash cover in relation to all or any
outstanding Contingent Liabilities, whereupon each Borrower shall
immediately provide cash cover in an amount equal to the total
Contingent Liability of the Lenders under all Bank Guarantees issued
for the account of that Borrower.
21.3 Clean Up Period: If during the Clean Up Period a matter or circumstance
exists in respect of the Target and/or any of its subsidiaries which would
constitute a breach of a representation or warranty
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made in clause 19 (Representations and Warranties) or a breach of any
covenant set out in clause 20 (Undertakings) or a Default, such matter or
circumstance will not constitute a Default provided that reasonable steps
(in the opinion of the Facility Agent) are being taken to cure such matter
or circumstance unless such matter or circumstance (1) in the reasonable
opinion of the Majority Banks, is reasonably likely to have a Material
Adverse Effect, or (2) has been procured by, or approved by, the Parent or
(3) has not been cured by the expiry of the Clean Up Period.
22. THE AGENTS AND THE OTHER FINANCE PARTIES
22.1 Agents' appointment
(a) Each Lender:
(i) appoints Barclays Bank PLC as Facility Agent to act as its agent
under and in connection with the Senior Finance Documents and as
Security Agent to act as its security agent for the purposes of
the Security Documents; and
(ii) irrevocably authorises each Agent for and on its behalf to
exercise the rights, powers and discretions which are
specifically delegated to it by the terms of the Senior Finance
Documents, together with all rights, powers and discretions which
are incidental thereto and to give a good discharge for any
monies payable under the Senior Finance Documents.
(b) Each Agent will act solely as agent for the Lenders in carrying out
its functions as agent under the Senior Finance Documents and will
exercise the same care as it would in dealing with a credit for its
own account.
(c) The relationship between the Lenders and each Agent is that of
principal and agent only. No Agent shall have, nor be deemed to have,
assumed any obligations to, or trust or fiduciary relationship with,
the other Finance Parties or any Obligor, other than those for which
specific provision is made by the Senior Finance Documents.
22.2 Agents' duties
Each Agent shall:
(a) send to each Lender details of each communication delivered to the
Agent by an Obligor for that Lender under any Senior Finance Document
as soon as reasonably practicable after receipt;
(b) subject to those provisions of this agreement which require the
consent of all the Lenders, act in accordance with any instructions
from the Majority Lenders or, if so instructed by the Majority
Lenders, refrain from exercising a right, power or discretion vested
in it under any Senior Finance Document;
(c) have only those duties, obligations and responsibilities expressly
specified in the Senior Finance Documents; and
(d) without prejudice to clause 22.6(c) (Communications and information),
promptly notify each Lender:
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(i) of any Default which occurs under clause 21.1(a) (Payment
default); and
(ii) if the Agent receives notice from an Obligor referring to this
agreement, describing a Default and stating that the circumstance
described is a Default.
22.3 Agents' rights
Each Agent may:
(a) perform any of its duties, obligations and responsibilities under the
Senior Finance Documents by or through its personnel, delegates or
agents (on the basis that each Agent may extend the benefit of any
indemnity received by it under this agreement to its personnel,
delegates or agents);
(b) except as expressly provided to the contrary in any Senior Finance
Document, refrain from exercising any right, power or discretion
vested in it under the Senior Finance Documents until it has received
instructions from the Majority Lenders or, where relevant, all the
Lenders;
(c) unless it has received notice to the contrary, treat the Lender which
makes available any portion of a Drawing as the person entitled to
repayment of that portion;
(d) refrain from doing anything which would or might in its opinion be
contrary to any law, regulation or judgment of any court of any
jurisdiction or otherwise render it liable to any person and may do
anything which is in its opinion necessary to comply with any such
law, regulation or judgment;
(e) assume that no Default has occurred, unless an officer of that Agent
while active on the account of the Parent acquires actual knowledge to
the contrary;
(f) refrain from taking any step (or further step) to protect or enforce
the rights of any Lender under any Senior Finance Document until it
has been indemnified and/or secured to its satisfaction against all
losses, (including legal fees) which it would or might sustain or
incur as a result;
(g) rely on any communication or document believed by it to be genuine and
correct and to have been communicated or signed by the person to whom
it purports to be communicated or by whom it purports to be signed;
(h) rely as to any matter of fact which might reasonably be expected to be
within the knowledge of any Group Company in a statement by or on
behalf of that Group Company;
(i) obtain and pay for any legal or other expert advice or services which
may seem necessary or desirable to it and rely on any such advice;
(j) accept without enquiry any title which an Obligor may have to any
asset intended to be the subject of the security created by the
Security Documents; and
(k) hold or deposit any title deeds, Security Documents or any other
documents in connection with any of the assets charged by the Security
Documents with any banker or banking company or any company whose
business includes undertaking the safe custody of deeds or documents
or with any lawyer or firm of lawyers and it shall not be responsible
for or be required to insure
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against any loss incurred in connection with any such holding or
deposit and it may pay all amounts required to be paid on account or
in relation to any such deposit.
22.4 Exoneration of the Joint Mandated Lead Arranger and the Agents
None of the Joint Mandated Lead Arrangers, the Agents or any of their
respective personnel or agents shall be:
(a) responsible for the adequacy, accuracy or completeness of any
representation, warranty, statement or information in the Syndication
Memorandum, any Senior Finance Document or any notice or other
document delivered under any Senior Finance Document;
(b) responsible for the execution, delivery, validity, legality, adequacy,
enforceability or admissibility in evidence of any Senior Finance
Document;
(c) obliged to enquire as to the occurrence or continuation of a Default
or as to the accuracy or completeness of any representation or
warranty made by any Obligor under any Senior Finance Document;
(d) responsible for any failure of any Obligor or any of the Lenders duly
and punctually to observe and perform their respective obligations
under any Senior Finance Document;
(e) responsible for the consequences of relying on the advice of any
professional advisers selected by any of them in connection with any
Senior Finance Document;
(f) liable for acting (or refraining from acting) in what it believes to
be in the best interests of the Lenders in circumstances where it has
been unable, or it is not practicable, to obtain the instructions of
the Lenders or the Majority Lenders (as the case may be); or
(g) liable for anything done or not done by it under or in connection with
any Senior Finance Document, save in the case of its own gross
negligence or wilful misconduct.
22.5 The Joint Mandated Lead Arrangers and the Agents individually
(a) If it is a Lender, each of the Joint Mandated Lead Arrangers and the
Agents shall have the same rights and powers under the Senior Finance
Documents as any other Lender and may exercise those rights and powers
as if it were not also acting as a Joint Mandated Lead Arranger or an
Agent.
(b) Each of the Joint Mandated Lead Arrangers and the Agents may:
(i) retain for its own benefit and without liability to account any
fee or other amount receivable by it for its own account; and
(ii) accept deposits from, lend money to, provide any advisory, trust
or other services to or engage in any kind of banking or other
business with any party to this agreement or any subsidiary of
any party (and, in each case, may do so without liability to
account).
(c) Each Lender shall supply the Facility Agent with any information
required by the Facility Agent in order to calculate the Mandatory
Cost in accordance with Schedule 4 (Mandatory Cost Formulae).
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22.6 Communications and information
(a) All communications to an Obligor in connection with the Senior Finance
Documents are to be made by or through the Facility Agent. Each
Finance Party will notify the Facility Agent of, and provide the
Facility Agent with a copy of, any communication between that Finance
Party, an Obligor or any other Finance Party on any matter concerning
the Facilities or the Senior Finance Documents.
(b) No Agent will be obliged to transmit to any other Finance Party any
information relating to any party to any Senior Finance Document which
that Agent may have acquired otherwise than in connection with the
Facilities or the Senior Finance Documents. Notwithstanding anything
to the contrary expressed or implied in any Senior Finance Document,
no Agent shall, as between itself and the other Finance Parties, be
bound to disclose to any other Finance Party or other person any
information, disclosure of which might in the opinion of that Agent
result in a breach of any law or regulation or be otherwise actionable
at the suit of any person.
(c) In acting as agent for the Lenders, each Agent's banking division will
be treated as a separate entity from any other of its divisions (or
similar unit of that Agent in any subsequent re-organisation) or
subsidiaries (the "Other Divisions") and, if the relevant Agent acts
for any Group Company in a corporate finance or other advisory
capacity ("Advisory Capacity"), any information given by any Group
Company to one of the Other Divisions is to be treated as confidential
and will not be available to the Finance Parties without the consent
of the Parent, except that:
(i) the consent of the Parent will not be required in relation to any
information which the relevant Agent in its discretion determines
relates to a Default or in relation to which the Lenders have
given a confidentiality undertaking in a form satisfactory to
that Agent and the relevant Group Company (acting reasonably);
and
(ii) if representatives or employees of the relevant Agent receive
information in relation to a Default whilst acting in an Advisory
Capacity, they will not be obliged to disclose that information
to representatives or employees of that Agent in their capacity
as agent bank or security agent under this agreement or to any
Lender, if to do so would breach any rule or regulation or
fiduciary duty imposed upon those persons.
22.7 Non-reliance on the Joint Mandated Lead Arrangers and the Agents
Each Lender confirms that it is (and will at all times continue to be)
solely responsible for making its own independent investigation and
appraisal of the business, operations, financial condition,
creditworthiness, status and affairs of each Group Company and has not
relied, and will not at any time rely, on any Joint Mandated Lead Arranger
or any Agent:
(a) to provide it with any information relating to the business,
operations, financial condition, creditworthiness, status and affairs
of any Group Company, whether coming into its possession before or
after the making of any Advance, except as specifically provided
otherwise in this agreement; or
(b) to check or enquire into the adequacy, accuracy or completeness of any
information provided by any Group Company under or in connection with
any Senior Finance Document (whether
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or not that information has been or is at any time circulated to it by
a Joint Mandated Lead Arranger or an Agent), including that contained
in the Syndication Memorandum; or
(c) to assess or keep under review the business, operations, financial
condition, creditworthiness, status or affairs of any Group Company.
22.8 Agents' indemnity
(a) Each Lender shall on demand indemnify each Agent (in proportion to
that Lender's participation in the Drawings (or the Total Commitments
if there are no Drawings outstanding) at the relevant time) against
any loss incurred by the relevant Agent in complying with any
instructions from the Lenders or the Majority Lenders (as the case may
be) or otherwise sustained or incurred in connection with the Senior
Finance Documents or its duties, obligations and responsibilities
under the Senior Finance Documents, except to the extent that it is
incurred as a result of the gross negligence or wilful misconduct of
the relevant Agent or any of its personnel.
(b) The provisions of clause 22.8(a) are without prejudice to any
obligations of the Obligors to indemnify the Agents under the Senior
Finance Documents.
22.9 Termination and resignation of agency
(a) An Agent (a "Retiring Agent") may resign its appointment at any time
by giving notice to the Lenders and the Parent.
(b) A successor Agent (a "Successor Agent") shall be selected:
(i) by the Retiring Agent nominating one of its Affiliates following
consultation with the Parent as Successor Agent in its notice of
resignation; or
(ii) if the Retiring Agent makes no such nomination, by the Majority
Lenders nominating a Lender acting through an office in the
United Kingdom as Successor Agent (following consultation with
the Parent); or
(iii)if the Majority Lenders have failed to nominate a Successor
Agent within 30 days of the date of the Retiring Agent's notice
of resignation, by the Retiring Agent and the Parent by mutual
agreement nominating a financial institution of good standing
acting through an office in the United Kingdom to be the
Successor Agent.
(c) The Majority Lenders may at any time with the prior written consent of
the Parent, such consent not to be unreasonably withheld or delayed,
by 30 days' prior notice to the relevant Agent and the Parent
terminate the appointment of an Agent and appoint a Successor Agent.
(d) The resignation of the Retiring Agent and the appointment of the
Successor Agent will become effective only upon the Successor Agent
accepting its appointment as Agent (and, in the case of the Security
Agent's resignation, upon the execution of all deeds and documents
necessary to substitute its successor as holder of the security
comprised in the Security Documents), at which time:
(i) the Successor Agent will become bound by all the obligations of
the Facility Agent Security Agent (as the case may be) and become
entitled to all the rights, privileges,
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powers, authorities and discretions of such Agent under the
Senior Finance Documents;
(ii) the agency of the Retiring Agent will terminate (but without
prejudice to any liabilities which the Retiring Agent may have
incurred prior to the termination of its agency); and
(iii)the Retiring Agent will be discharged from any further liability
or obligation under or in connection with the Senior Finance
Documents (except that the Retiring Agent shall pay to the
Successor Agent a pro rata proportion of the agency fee referred
to in clause 16.2 (Agency fee) for the 12 month period in
relation to which that agency fee was most recently paid).
(e) The Retiring Agent will co-operate with the Successor Agent in order
to ensure that its functions are transferred to the Successor Agent
without disruption to the service provided to the Parent and the
Lenders and will as soon as practicable following the Successor
Agent's appointment, make available to the Successor Agent the
documents and records which have been maintained in connection with
the Senior Finance Documents in order that the Successor Agent is able
to discharge its functions.
(f) The provisions of this agreement will continue in effect for the
benefit of any Retiring Agent in relation to any actions taken or
omitted to be taken by it or any event occurring before the
termination of its agency.
(g) The Parent will execute and procure that each Group Company executes
such agreements as the Retiring Agent shall require in order to effect
the appointment of a Successor Agent for all purposes (including
security related) under the Senior Finance Documents.
22.10 Role of the Security Agent
The Security Agent shall hold the benefit of the Security Documents on
trust for itself and the other Finance Parties and will apply all payments
and other benefits received by it under the Security Documents in
accordance with the provisions of the Intercreditor Deed.
22.11 Payments to Finance Parties
(a) Each Agent will account to each other Finance Party for its due
proportions of all amounts received by that Agent for that Finance
Party, whether by way of repayment of principal or payment of
interest, commitment commission, fees or otherwise.
(b) Each Agent may retain for its own use and benefit, and will not be
liable to account to any other Finance Party for all or any part of,
any amounts received by way of agency or arrangement fee or by way of
reimbursement of expenses incurred by it.
22.12 Lender tax status
Each Lender will notify each Agent on the date it becomes a party to this
agreement, whether or not it is:
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(a) either (i) not resident in the United Kingdom for United Kingdom Tax
purposes, or (ii) a bank as defined in section 840A of the Income and
Corporation Taxes Act 1988 and resident in the United Kingdom; and
(b) beneficially entitled to the principal and interest payable by the
Facility Agent to it under this agreement.
22.13 Change of office of Agent
An Agent may at any time in its sole discretion by notice to the Parent and
each other Finance Party designate a different office in the United Kingdom
from which its duties as the relevant Agent will be performed from the date
of notification.
23. PRO RATA PAYMENTS
23.1 Recoveries
If any amount owing by any Obligor under any Senior Finance Document to a
Lender (the "Recovering Lender") is discharged by payment, set-off or any
other manner other than through the Facility Agent in accordance with
clause 13 (Payments) (that amount being referred to in this clause 23.1 as
a "Recovery") then:
(a) within two Business Days of receipt of the Recovery, the Recovering
Lender shall pay to the Facility Agent an amount equal (or equivalent)
to that Recovery;
(b) the Facility Agent shall treat that payment as if it was part of the
payment to be made by the relevant Obligor to the Lenders rateably in
accordance with their respective Commitments; and
(c) (except for any receipt by the Recovering Lender as a result of the
operation of clause 23.1(b)) as between the relevant Obligor and the
Recovering Lender, the Recovery shall be treated as not having been
paid.
23.2 Notification of recovery
Each Lender will notify the Facility Agent as soon as reasonably
practicable of any Recovery by that Lender, other than by payment through
the Facility Agent. If any Recovery subsequently has to be wholly or partly
refunded by the Recovering Lender which paid an amount equal to that
Recovery to the Facility Agent under clause 23.1(a) (Recoveries), each
Lender to which any part of that amount was distributed will, on request
from the Recovering Lender, repay to the Recovering Lender that Lender's
pro rata share of the amount which has to be refunded by the Recovering
Lender.
23.3 Information
Each Lender will on request supply to the Facility Agent any information
which the Facility Agent may from time to time request for the purpose of
this clause 23.
23.4 Exceptions to sharing of Recoveries
Notwithstanding the foregoing provisions of this clause 23, no Recovering
Lender will be obliged to share any Recovery which it receives as a result
of legal proceedings taken by it to recover any
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amounts owing to it under the Senior Finance Documents with any other party
which has a legal right to, but does not, either join in those proceedings
or commence and diligently pursue separate proceedings to enforce its
rights in the same or another court (unless the proceedings instituted by
the Recovering Lender are instituted by it without prior notice having been
given to that other party through the Facility Agent).
23.5 Several obligations
Failure by any Recovering Lender to comply with any of the provisions of
this clause 23 will not release any other Recovering Lender from any of its
obligations or liabilities under this clause 23.
23.6 Obtaining consents
Each party to this agreement shall take all steps required of it under
clause 23.1 (Recoveries) and use its reasonable endeavours to obtain any
consents or authorisations which may be required in relation to any payment
to be made by it under this clause 23.
23.7 No security
The provisions of this clause 23 shall not, and shall not be construed so
as to, constitute a charge by any Lender over all or any part of any amount
received or recovered by it under any of the circumstances mentioned in
this clause 23.
23.8 Ancillary and Hedging Lenders
This clause 23 shall not apply to any Recovery by a Lender in its capacity
as an Ancillary Lender or by a Lender in its capacity as a Hedging Lender.
24. SET-OFF
24.1 Set-off rights
Any Finance Party may at any time (upon notice to the relevant Obligor):
(a) set-off or otherwise apply amounts standing to the credit of any
Obligor's accounts with that Finance Party (irrespective of the terms
applicable to those accounts and whether or not those amounts are then
due for repayment to that Obligor); and
(b) set-off any other obligations (whether or not then due for
performance) owed by that Finance Party to the relevant Obligor,
against any matured liability (or after an Event of Default has occurred
which is continuing, against any liability) of the relevant Obligor to the
relevant Finance Party under the Senior Finance Documents.
24.2 Different currencies
A Finance Party may exercise its rights under clause 24.1 (Set-off rights)
notwithstanding that the amounts concerned may be expressed in different
currencies and each Finance Party is authorised to effect any necessary
conversions at a market rate of exchange selected by it.
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24.3 Unliquidated claims
If the relevant obligation or liability is unliquidated or unascertained,
the Finance Party may set-off the amount which it estimates (in good faith)
will be the final amount of that obligation or liability once it becomes
liquidated or ascertained.
25. NOTICES
25.1 Mode of service
(a) Except as specifically provided otherwise in this agreement, any
notice, demand, consent, agreement or other communication (a "Notice")
to be served under or in connection with any Senior Finance Document
will be in writing and will be made by letter or by facsimile
transmission to the party to be served.
(b) The address and facsimile number of each party to this agreement for
the purposes of clause 25.1(a) are:
(i) the address and facsimile number shown immediately after its name
on the signature pages of this agreement (in the case of any
person who is a party as at the date of this agreement);
(ii) the address and facsimile number notified by that party for this
purpose to the Facility Agent on or before the date it becomes a
party to this agreement (in the case of any person who becomes a
party after the date of this agreement); or
(iii)any other address and facsimile number notified by that party
for this purpose to the Facility Agent by not less than five
Business Days' notice.
(c) Any Notice to be served by any Obligor on a Finance Party will be
effective only if it is expressly marked for the attention of the
department or officer (if any) specified in conjunction with the
relevant address and facsimile number referred to in clause 25.1(b).
25.2 Deemed service
(a) Subject to clause 25.2(b), a Notice will be deemed to be given as
follows:
(i) if by letter, when delivered personally or on actual receipt; and
(ii) if by facsimile, when delivered.
(b) A Notice given in accordance with clause 25.2(a) but received on a
non-working day or after business hours in the place of receipt will
only be deemed to be given on the next working day in that place.
25.3 Electronic communication
(a) Any communication to be made between any Agent and a Lender under or
in connection with the Senior Finance Documents may be made by
electronic mail or other electronic means, if the relevant Agent and
the relevant Lender:
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(i) agree that, unless and until notified to the contrary, this is to
be an accepted form of communication;
(ii) notify each other in writing of their electronic mail address
and/or any other information required to enable the sending and
receipt of information by that means; and
(iii)notify each other of any change to their address or any other
such information supplied by them.
(b) Any electronic communication made between any Agent and a Lender will
be effective only when actually received in readable form and in the
case of any electronic communication made by a Lender to the relevant
Agent only if it is addressed in such a manner as that Agent shall
specify for this purpose.
25.4 Language
(a) Any Notice must be in English.
(b) All other documents provided under or in connection with any Senior
Finance Document must be:
(i) in English; or
(ii) if not in English, accompanied by a certified English translation
in which case, the English translation will prevail unless the
document is a constitutional, statutory or other official
document.
26. CONFIDENTIALITY
Subject to clause 27.9 (Disclosure of information), the parties will keep
the Senior Finance Documents, the Syndication Memorandum and their subject
matter (including all details relating to the structure and financing of
the Offer) confidential, except to the extent that they are required by law
or regulation or the Panel or the Irish Stock Exchange Limited to disclose
the same. Each Finance Party agrees with each Obligor to hold confidential
all information which it acquires under or in connection with the Senior
Finance Documents, except to the extent it is required by law or regulation
or the Panel or the Irish Stock Exchange Limited to disclose it or it comes
into the public domain (otherwise than as a result of a breach of this
clause 26). A Finance Party may, however, disclose any such information to
its auditors, legal advisers or other professional advisers (the
"Advisers") for any purpose connected with the Senior Finance Documents,
provided that the relevant Finance Party takes reasonable steps to procure
that each Adviser maintains the confidentiality of that information and may
publicise the transaction following the issue of the Press Release with the
consent of the Parent (such consent not to be unreasonably withheld or
delayed).
27. CHANGES TO PARTIES
27.1 Assignment by the Obligors
No Obligor may assign or transfer all or any part of its rights, benefits
or obligations under any Senior Finance Document.
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27.2 Assignments and transfers by Lenders
(a) A Lender (in this capacity the "Transferor") may at any time assign
any of its rights under any Senior Finance Document or transfer any of
its rights and obligations under any Senior Finance Document to any
person (a "Transferee"), provided that:
(i) the Transferor has first consulted with the Parent;
(ii) the Transferee has executed a Creditor Accession Deed;
(iii)in the case of a transfer of rights only the procedure in clause
27.3 (Assignments by Lenders) is followed;
(iv) in the case of a transfer of rights and obligations the procedure
in clause 27.4 (Transfers by Lenders) is followed; and
(v) in the case of a transfer of the Revolving Facility, each Issuing
Lender has approved the Transferee (such approval not to be
unreasonably withheld or delayed).
(b) The Parent (for itself and as agent for the Obligors) will execute or
procure that there are executed such documents and take such other
actions as are necessary to effect or perfect a transfer of rights or
obligations to a Transferee under the Senior Finance Documents. Such
action will include (i) promptly countersigning Transfer Certificates
(although any delay or failure by the Parent to so countersign a
Transfer Certificate will not invalidate its operation) and (ii)]
taking such steps as the Facility Agent or the Security Agent may
request (including re-execution of Security Documents) for the purpose
of ensuring that the New Lender has (and the other Finance Parties
continue to have) the benefit of the same security interests under the
Security Documents as existed immediately before the relevant
transfer.
(c) Nothing in this agreement will restrict the ability of a Lender to
sub-participate or sub-contract any of its obligations under any
Senior Finance Document if that Lender remains liable under that
Senior Finance Document in relation to those obligations. A Lender
shall notify the Parent of any such sub-participation or
sub-contracting by it.
27.3 Assignments by Lenders
(a) Subject to clause 27.2(a) (Assignments and transfers by Lenders), a
Transferor may transfer all or any of its rights under the Senior
Finance Documents by:
(i) the Transferor and the Transferee entering into an assignment of
rights in a form agreed between them (which may be a modified
version of a Transfer Certificate); and
(ii) the Transferee delivering to the Facility Agent a copy of the
executed assignment instrument together with (or incorporating) a
legally binding undertaking (in a form approved by the Facility
Agent) confirming to the Facility Agent (on behalf of the Finance
Parties) that it assumes the same obligations towards the Finance
Parties (to the extent referable to the rights transferred to it)
as from the Assignment Date (as defined below) as it would have
been under if it had been an original party to the Senior Finance
Documents as a Lender.
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(b) Subject to also having complied with clause 27.2 (Assignments and
transfers by Lenders), the Transferee will be deemed to become a party
to the Senior Finance Documents as a Lender on the date specified in
the assignment instrument (which must be no earlier than the date it
delivers the documents required by clause 27.3(a)(ii) (the "Assignment
Date")).
27.4 Transfers by Lenders
(a) A Transferor may, subject to clause 27.2 (Assignments and transfers by
Lenders), transfer all or any of its rights and obligations under the
Senior Finance Documents to a Transferee by the Facility Agent
executing a Transfer Certificate which has been duly completed and
signed by both the Transferee and the Transferor.
(b) On the date (the "Transfer Date") which is the later of (A) the date
specified in the Transfer Certificate as being the date on or as from
which the transfer under this clause 27.4 is to take effect and (B)
the date on which the Facility Agent executes the Transfer
Certificate, to the extent that, in the Transfer Certificate, the
Transferor seeks to transfer its right and obligations under the
Senior Finance Documents:
(i) to the extent the Transfer Certificate records a transfer of
Advances which are outstanding on the Transfer Date, the transfer
will take effect in relation to those Advances and all related
rights under the Credit Agreement by way of assignment;
(ii) to the extent the Transfer Certificate records a transfer of
rights and obligations under the Senior Finance Documents in the
case of rights to the extent not assigned as contemplated by
paragraph (i) above), each of the Obligors and the Existing
Lender shall be released from further obligations towards one
another under the Senior Finance Documents and their respective
rights against each other will be cancelled (such rights and
obligations being referred to in this clause 27.4 as "Discharged
Rights and Obligations");
(iii)each of the Obligors and the New Lender shall assume obligations
towards one another and/or acquire rights against one another
which differ from the Discharged Rights and Obligations only
insofar as that Obligor and the New Lender have assumed and/or
acquired the same in place of that Obligor and the Existing
Lender;
(iv) the Facility Agent, the Security Agent, the Joint Mandated Lead
Arrangers, the New Lender and the other Lenders shall acquire the
same rights and assume the same obligations between themselves as
they would have acquired and assumed had the New Lender been a
Lender on the date of this agreement with the rights and/or
obligations acquired or assumed by it as a result of the transfer
and to that extent the Facility Agent, the Security Agent, the
Joint Mandated Lead Arrangers and the Existing Lender shall each
be released from further obligations to each other under this
agreement; and
(v) the New Lender will become a party to this agreement as a Lender.
(vi) the Transferee and the Existing Parties will assume obligations
towards each other which differ from the Discharged Obligations
only insofar as they are owed to or assumed by the Transferee
instead of the Transferor;
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(vii)the rights of the Transferor and the Existing Parties against
each other under those Senior Finance Documents (the "Discharged
Rights") will be cancelled;
(viii) the Transferee and the Existing Parties will acquire rights
against each other which differ from the Discharged Rights only
insofar as they are exercisable by or against the Transferee
instead of the Transferor; and
(ix) the Transferee will become a party to this agreement as a Lender
in relation to the relevant Facility.
(c) Each of the parties to this agreement (other than the relevant
Transferor and the relevant Transferee) irrevocably authorises the
Facility Agent to execute on its behalf any Transfer Certificate which
has been duly completed in accordance with this clause 27.4 and
executed by each of the Transferor and the Transferee.
(d) The Facility Agent will notify the other parties to this agreement of
the receipt and execution by it on their behalf of any Transfer
Certificate as soon as reasonably practicable following execution.
27.5 Notification
The Facility Agent will promptly notify the Parent (as agent for the
Obligors) and the other Finance Parties of:
(a) receipt of assignment documents under clause 27.3(a)(ii) (Assignments
by Lenders ); and
(b) the receipt and execution by it of any Transfer Certificate under
clause 27.4 (Transfers by Lenders).
27.6 Fee
On the date on which any transfer takes effect in accordance with this
clause 27, the Transferee will pay to the Facility Agent for its own
account a transfer fee of $1,500.
27.7 Limitation of Responsibility of Transferor
(a) Unless expressly agreed to the contrary, a Transferor makes no
representation or warranty and assumes no responsibility to a
Transferee for:
(i) the legality, validity, effectiveness, adequacy or enforceability
of the Senior Finance Documents or any other documents;
(ii) the financial condition of any Obligor;
(iii)the performance and observance by any Obligor of its obligations
under the Senior Finance Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in
or in connection with any Senior Finance Document or any other
document,
and any representations or warranties implied by law are excluded.
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(b) Each Transferor confirms to the Transferee and the other Finance
Parties that:
(i) it has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection
with its participation in this agreement and has not relied
exclusively on any information provided to it by the Transferor
in connection with any Senior Finance Document;
(ii) it will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst
any amount is or may be outstanding under the Senior Finance
Documents or any Commitment is in force; and
(iii)if all or any of the Advances or other rights transferred are
rescheduled or renegotiated, the Transferee and not the
Transferor will be subject to the rescheduled or renegotiated
terms.
(c) Nothing in any Senior Finance Document obliges an Transferor to:
(i) accept a re-transfer from a Transferee of any of the rights and
obligations transferred under this clause 27; or
(ii) support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Obligor of its
obligations under the Senior Finance Documents or otherwise.
27.8 Benefit of agreement
This agreement will be binding on, and enure for the benefit of, each party
to it and its or any subsequent successors or assigns.
27.9 Disclosure of information
Each Lender may disclose to a proposed assignee or transferee or any
sub-participant, risk participant or other participant proposing to enter
or having entered into a contract with that Lender regarding the Senior
Finance Documents any information in the possession of that Lender relating
to any Group Company.
28. LENDERS' DECISIONS
28.1 Procedures
(a) Subject to clauses 28.2 (Exceptions) and 28.3 (Express provisions),
any provision of any Senior Finance Document may be amended or waived
(each a "Modification") with the agreement of the Majority Lenders and
the Parent. A Modification so agreed may be effected by the Facility
Agent executing any documents which may be required for that purpose
on behalf of itself and all the other Finance Parties and the Parent
executing those documents on behalf of itself and all the other
Obligors.
(b) The Facility Agent will as soon as practicable after any Modification
is made in accordance with clause 28.1(a) notify the other parties to
the Senior Finance Documents. Any such Modification will take effect
from the date on which that notification is given (or any later
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date which the Facility Agent may specify in that notification) and
will be binding on all parties to the Senior Finance Documents.
28.2 Exceptions
The following matters will require the unanimous agreement of all of the
Lenders:
(a) any increase in the Commitment of any Lender;
(b) any reduction of the Margin or any reduction of (or change in the
currency of) the amount of any payment of principal, interest,
guarantee fee or commission payable by any party under any Senior
Finance Document;
(c) any extension of any Availability Period, any Maturity Date, any
Repayment Date or any other date for payment of any amount due, owing
or payable to any Lender under any Senior Finance Document;
(d) any change to the Borrowers or Guarantors or any release of security,
other than in accordance with clause 18 (Changes to Obligors and
Security); or
(e) any amendment of the definition of "Majority Lenders" in clause 1.1
(Definitions) or any amendment of clause 3.3 (Rights and obligations
of Finance Parties), clause 23 (Pro rata payments), clause 27 (Changes
to Parties) or this clause 28.
28.3 Express provisions
Any consent or other matter which, by the express terms of any Senior
Finance Document, is to be given by all the Lenders will not be effective
unless all the Lenders have agreed to it but, subject to the agreement of
all the Lenders having been obtained, may be given by the Facility Agent on
behalf of all the Lenders.
28.4 Ancillary Lenders
Subject to clause 6 (Ancillary Facilities), any Ancillary Document may be
amended or waived by agreement between the parties to that Ancillary
Document.
28.5 Hedging Lenders
Subject to the terms of the Intercreditor Deed, any Hedging Agreement may
be amended or waived by agreement between the parties to that Hedging
Agreement.
29. INDEMNITIES
29.1 General indemnity and breakage costs
The Parent will indemnify each Finance Party on demand against any loss
(including loss of profit) which it incurs as a result of:
(a) the occurrence of any Default;
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(b) any failure by an Obligor to pay any amount due under a Senior Finance
Document on its due date;
(c) any Drawing not being made for any reason (other than as a result of a
default by a Finance Party) on the Drawdown Date specified in the
relevant Drawdown Request; or
(d) any Advance or overdue amount under a Senior Finance Document being
repaid or prepaid otherwise than on the last day of an Interest Period
relating to that Advance or overdue amount.
29.2 Currency indemnity
Without prejudice to clause 29.1 (General indemnity and breakage costs),
if:
(a) any amount payable by any Obligor under or in connection with any
Senior Finance Document is received by any Finance Party (or by an
Agent on behalf of any Finance Party) in a currency (the "Payment
Currency") other than that agreed in the relevant Senior Finance
Document (the "Agreed Currency"), whether as a result of any judgement
or order, the enforcement of any judgement or order, the liquidation
of the relevant Obligor or otherwise, and the amount produced by
converting the Payment Currency so received into the Agreed Currency
is less than the relevant amount of the Agreed Currency; or
(b) any amount payable by any Obligor under or in connection with any
Senior Finance Document has to be converted from the Agreed Currency
into another currency for the purpose of (i) making or filing a claim
or proof against any Obligor, (ii) obtaining an order or judgment in
any court or other tribunal or (iii) enforcing any order or judgment
given or made in relation to any Senior Finance Document,
then that Obligor will, as an independent obligation, on demand indemnify
the relevant Finance Party for the deficiency and any loss sustained as a
result. Any conversion required will be made at the prevailing rate of
exchange on the date and in the market determined by the relevant Finance
Party as being most appropriate for the conversion. That Obligor will also
pay the costs of the conversion.
29.3 Waiver
The Parent waives any right it may have in any jurisdiction to pay any
amount under any Senior Finance Document in a currency other than that in
which it is expressed to be payable in that Senior Finance Document.
29.4 Offer Indemnity
The Parent and Loan Noteco will jointly and severally on demand indemnify
each Finance Party and each of their respective Affiliates, directors,
officers, employees or agents (each an "Indemnified Party") from and
against any and all losses, liabilities, claims, costs and expenses
(including legal fees) which the relevant Indemnified Party may suffer or
incur (unless caused by the gross negligence or wilful misconduct of the
Indemnified Party) arising out of or in connection with any actual or
potential legal action or other proceedings arising out of or relating to
the Offer, the financing of the Offer or any purchase of shares in the
Target.
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30. MISCELLANEOUS
30.1 Certificates conclusive
Save as expressly provided otherwise in any Senior Finance Document, a
certificate, determination, notification or opinion of any Finance Party
stipulated for in any Senior Finance Document or as to any rate of interest
or any other amount payable under any Senior Finance Document will be
conclusive and binding on each Obligor, except in the case of manifest
error.
30.2 No implied waivers
(a) No failure or delay by any Finance Party in exercising any right,
power or privilege under any Senior Finance Document will operate as a
waiver of that right, power or privilege, nor will any single or
partial exercise of any right, power or privilege preclude any other
or further exercise of that right, power or privilege, or the exercise
of any other right, power or privilege.
(b) The rights and remedies provided in the Senior Finance Documents are
cumulative and not exclusive of any rights and remedies provided by
law and all those rights and remedies will, except where expressly
provided otherwise in any Senior Finance Document, be available to the
Finance Parties severally and any Finance Party shall be entitled to
commence proceedings in connection with those rights and remedies in
its own name.
(c) A waiver given or other consent granted by any Finance Party under any
Senior Finance Document will be effective only if given in writing and
then only in the instance and for the purpose for which it is given.
30.3 Invalidity of any provision
If any provision of this agreement is or becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not be affected or
impaired in any way.
30.4 Counterparts
This agreement may be executed in any number of counterparts and all of
those counterparts taken together shall be deemed to constitute one and the
same instrument.
30.5 Perpetuity Period
The perpetuity period applicable to the trusts created by this agreement is
80 years.
30.6 Third party rights
(a) The Contracts (Rights of Third Parties) Xxx 0000 shall apply to this
agreement only in respect of the benefit of the Agents' indemnity
extended to the Agent's respective personnel, delegates or agents
("Relevant Third Parties") under clause 22.3(a) (Agents' rights) and
no other third party shall have any rights under this agreement.
(b) A Relevant Third Party may not veto or restrict in any way any
amendment or termination of this agreement which is agreed by the
parties.
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31. GOVERNING LAW AND SUBMISSION TO JURISDICTION
31.1 This agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this agreement)
shall be governed by, and construed in accordance with, English law.
31.2 Submission to Jurisdiction
For the benefit of each Finance Party, each Obligor irrevocably submits to
the jurisdiction of the courts in England for the purpose of hearing and
determining any dispute arising out of this agreement and for the purpose
of enforcement of any judgment against its assets.
31.3 Freedom of Choice
The submission to the jurisdiction of the courts referred to in clause 31.2
(Submission to Jurisdiction) shall not (and shall not be construed so as
to) limit the right of any Finance Party to take proceedings against any
Obligor in any other court of competent jurisdiction nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and
to the extent permitted by applicable law.
31.4 Service of Process
Without prejudice to any other permitted mode of service, each Obligor
(incorporated outside England and Wales) agrees that service of any claim
form, notice or other document for the purpose of any proceedings in such
courts shall be duly served upon it if delivered or sent by registered post
to Loan Noteco at 00 Xxxxxxxxxxx, Xxxxxx XX0X 0XX marked for the attention
of Xxxxxxx Xxxxx or such other address in England or Wales as the Parent
may notify from time to time to the Facility Agent. Loan Noteco agrees to
act as such agent.
IN WITNESS whereof this agreement has been duly executed on the date first above
written.
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SCHEDULE 1
Lenders
Term A Term B Revolving
Commitment Commitment Commitment
($) ($) ($)
BARCLAYS BANK PLC 40,000,000 17,500,000 10,000,000
Lending Office:
0xx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile:
020 7699 2770
Attention:
Xxxxxx Xxxxxxx
THE ROYAL BANK OF 40,000,000 17,500,000 10,000,000
SCOTLAND PLC
Lending Office:
Loans Administration Dept
XX Xxx 000
0-00 Xxxxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile:
020 7375 5265
Attention:
Xxxx Xxxxx
-------------------------------------------------------------------------
$80,000,000 $35,000,000 $20,000,000
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SCHEDULE 2
Borrower
Company Place of Incorporation Registered Number
Parent The Republic of Ireland 317234
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SCHEDULE 3
Guarantors
Company Place of Incorporation Registered Number
Parent The Republic of Ireland 317234
Loan Noteco England and Wales 4619876
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SCHEDULE 4
Part 1 - Conditions Precedent to signing this agreement
1. Formalities Documents: the documents referred to in paragraphs 1 to 6
(inclusive) of part 4 of this schedule in respect of the Parent and Loan
Noteco.
2. Senior Finance Documents: the following documents in the agreed form duly
executed and delivered by all parties thereto:
(a) this agreement;
(b) the Irish Debenture, the Hedging Debenture and a Share Pledge relating
to the shares in Loan Noteco, each executed by the Parent;
(c) the English Debenture executed by Loan Noteco;
(d) the Intercreditor Deed;
(e) the Fees Letters; and
(f) the Syndication Letter.
3. Mezzanine Finance Documents: the following documents in the agreed form
(other than in respect of (b)) duly executed and delivered by all parties
thereto:
(a) the Mezzanine Loan Agreement;
(b) Warrant Instrument; and
(c) fees letters referred to in the Mezzanine Loan Agreement.
4. Equity Documents: certified copies of the following documents (other than
in respect of (b), (c) and (g)) duly executed and delivered by all parties
thereto:
(a) the Investment Agreement and any disclosure letter and management
rights agreement in respect thereof;
(b) the agreed form Investor Loan Note Instrument;
(c) any intra-group loan documentation in the agreed form between the
Parent and Loan Noteco in relation to the intra-group loan of
$107,286,500 to be made by Loan Noteco to the Parent on or before the
date 5 days after the Unconditional Date;
(d) the Constitutional Documents;
(e) the Alchemy Bridge Facility Agreement and any fee letter relating
thereto;
(f) the Alchemy Undertaking; and
(g) the agreed form documentation relating to the transfer of the shares
owned or held by the Individual Shareholders in Target.
5. Reports: originals of each of the Reports (duly addressed to the
satisfaction of the Facility Agent to the Finance Parties, or with a
written confirmation addressed to the satisfaction of the Facility Agent to
the Finance Parties from the person that has produced the relevant report
that the same may be relied upon by the Finance Parties).
6. Legal Opinions:
(a) a legal opinion of Ashurst Xxxxxx Xxxxx as regards English law in form
and substance satisfactory to the Facility Agent;
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(b) a legal opinion of XxXxxx Xxxxxxxxxx as regards the laws of the
Republic of Ireland in form and substance satisfactory to the Facility
Agent; and
(c) a legal opinion of White & Case LLP as regards the laws of New York in
form and substance satisfactory to the Facility Agent.
7. Structure Document: the Structure Document.
8. Receiving Agent instruction: an instruction letter in the agreed form given
to the Receiving Agent to hold the Target Shares acquired by the Parent
pursuant to the Offer to the order of the Security Agent.
9. Financial Assistance:
(a) the Financial Assistance Documents in the agreed form; and
(b) the upstream intra-group loan agreements between (i) members of the
Target Group incorporated in Ireland and in the United States of
America and (ii) the Parent, each in the agreed form.
10. Preliminary Announcement: the final form of the Press Release and the
Second Press Release and a certified copy of the Board Minutes approving
the release of the Press Release and the Second Press Release.
11. Offer Document: the latest draft of the Offer Document.
12. Recommended Offer: a certificate from the Parent to the Lender dated the
date of this agreement confirming that the Offer has been recommended by
the board of directors of the Target.
13. Agreed Form Security Documents:
(a) copies of the agreed form of each Security Document referred to in
part 2 of Schedule 9 together with the agreed form opinion of:
(i) White & Case LLP;
(ii) XxXxxx Xxxxxxxxxx;
(iii) Xxxxxx and Calder; and
(iv) Xxxxxx and Xxxxxxx LLP.
(b) receipt of Uniform Commercial Code filing reports in all jurisdictions
where a Uniform Commercial Code filing would perfect a security
interest.
14. Financial and Related Information: a copy of:
(a) the Management Financial Model;
(b) the Original Audited Accounts; and
(c) the Original Management Accounts relating to November 2002.
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15. Service Contracts: a certified copy of the agreed form Service Contracts.
16. Target Comfort: a certified copy of the commitment given by the Target
relating to the issue of shares in the Target, in the agreed form.
17. Termination of Xxxx arrangements: a certified copy of the termination deed
entered into between Riverdeep Group plc, Xxxx Elsevier Information
Holdings Inc. and Xxxx Elsevier Inc., duly executed by all parties thereto.
18. Underwriting Arrangement: a certified copy of the Underwriting Agreement in
the agreed form.
19. Agreed Form Share Option Scheme: a certified copy of the agreed form terms
relating to the Share Option Scheme to be implemented in accordance with
the terms of the Investment Agreement.
20. Tier One Certificate: a certificate in the agreed form of the Target
setting out comfort in relation to the Tier One exemption.
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Part 2 - Conditions Precedent - First Drawdown
Conditions precedent to be satisfied on or before the first Drawdown Date
1. Offer Document: a certified copy of the Press Release and the Offer
Document.
2. Acceptances: evidence that the Offer has not lapsed and has been declared
unconditional in all respects following receipt of acceptances of the Offer
(which have not been withdrawn) in respect of (i) not less than 80% of the
Target Shares the subject of the Offer and (ii) valid acceptances have been
received (and not, where permitted, withdrawn) from not less than 75 per
cent. of the holders of the shares to which the Offer relates calculated by
reference to each of the following dates:
(i) the date of despatch of the Offer Document to holders of the
Shares in the Target to which the Offer relates; and
(ii) the date on which the condition requiring valid acceptances by
shareholders of Target in respect of an aggregate amount of not
less than 80 per cent. of the Shares to which the Offer relates
is satisfied; and
(iii) the date on which the Offer ceases to be open for acceptance.
3. Equity:
(a) evidence that an amount of not less than $38,100 (or equivalent) has
been advanced and/or invested in the Parent by the Individual
Shareholders subscribing for shares in the capital of the Parent prior
to the date of this agreement;
(b) evidence that an amount of not less than $404,000 has been advanced
and/or invested in the Parent by (i) the Lead Equity Investors
subscribing for shares in the capital of the Parent in an amount of
not less than $328,970 and (ii) MSD Capital subscribing for shares in
the capital of the Parent in an amount of not less than $75,030;
(c) evidence that all shares owned or held by Individual Shareholders in
Target immediately prior to the date of this agreement have been
transferred to the Parent and that prior to the despatch of the Offer
Document to the holders of shares in the Target to which the Offer
relates the Parent is the absolute legal (subject only to registration
of stock transfers being delayed on account of stamping of stock
transfers not being completed) and beneficial owner thereof;
(d) evidence that:
(i) Xxx XxXxxxxx has complied with his obligations to advance monies
to the Parent in accordance with the agreed form Underwriting
Agreement; and/or
(ii) certain of the shareholders of Target as at the date of this
agreement have accepted the partial share alternative in
accordance with the terms of the Offer,
provided that the aggregate of the amount received by the Parent
pursuant to (i) and the subscription price of the shares issued
pursuant to the partial share alternative shall be not less than
$32,465,000 in aggregate;
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(e) evidence that either:
(i) the Lead Equity Investors have subscribed for the Investor Loan
Notes (excluding any subscription counted for the purpose of the
satisfaction of the condition referred to in paragraph (f) below)
in an amount not less than $31,375,500; or
(ii) the lender of the Alchemy Bridge Facility Agreement has advanced
to Loan Noteco $31,375,500 under the Alchemy Bridge Facility
Agreement; and
(f) evidence that an amount of not less than $75,911,000 has been advanced
to Loan Noteco by (i) the Lead Equity Investors subscribing for
Initial Investor Loan Notes in an amount of not less than $55,986,030
and (excluding any subscription counted for the purpose of the
satisfaction of the condition set out at paragraph (e) above) and (ii)
MSD Capital subscribing for Initial Investor Loan Notes in an amount
of not less than $19,924,970 together with evidence that such proceeds
have been advanced to the Parent pursuant to the intra-group loan
agreement in the agreed form.
4. Approvals: a certified copy of board resolutions of the Parent approving
the terms of the Offer as set out in the Offer Document.
5. Fees: Instructions to the Lenders that, upon first Drawdown, all fees
payable in accordance with the Fees Letters and this agreement will be
deducted from such Drawdown.
6. Investor Loan Note Instrument: A certified copy of each Investor Loan Note
Instrument duly executed and delivered by all persons thereto.
7. Mezzanine: Evidence that the Mezzanine Lenders have advanced, or will
simultaneously with the first Advance under this agreement advance, to the
Borrowers (as defined in the Mezzanine Loan Agreement) $45,000,000 under
the Mezzanine Loan Agreement.
8. Warrant Instrument: A certified copy of the Warrant Instrument and each
warrant certificate issued in accordance with such Warrant Instrument.
9. Formalities Certificate:
(a) A Formalities Certificate of the Parent (i) attaching the memorandum
and articles of association in the agreed form to be adopted by the
Parent prior to the Unconditional Date, (ii) attaching a certified
copy of a resolution of the directors of the Parent appointing each
member of the board as a director and (iii) confirming there has been
no change to the documents delivered pursuant to paragraph 1 of
schedule 4 (except as referred to in (i) above) and that such
documents remain true and complete and are in full force and effect as
at the date of such Formalities Certificate (which date shall be no
earlier than the date of execution of the Warrant Instrument); and
(b) A Formalities Certificate of Loan Noteco (i) attaching a certified
copy of a resolution of the directors of the Parent appointing each
member of the board as a director and (ii) confirming there has been
no change to the documents delivered pursuant to paragraph 1 of
schedule 4 in respect of Loan Noteco and that such documents remain
true and complete and are in full force and effect as at the date of
such Formalities Certificate.
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Part 3 - Conditions subsequent relating to the granting of security
1. Formalities Documents: the documents referred to in part 4 of this schedule
in respect of the Security Documents and Accession Documents to be executed
by the relevant Obligor.
2. Financial Assistance: evidence in form and substance satisfactory to the
Facility Agent that (if applicable) the requirements of section 60 or the
Irish Companies Act, 1963 have been complied with so far as they relate to
the Senior Finance Documents and otherwise the relevant financial
assistance documentation is in substantially the same form as the Financial
Assistance Documents in the agreed form.
3. Legal opinion: a legal opinion in a form satisfactory to the Facility Agent
in respect of any security not governed by English law.
4. Security Notices, Releases and Consents:
(a) the original notices of assignment or charge to be given under the
Security Documents duly signed on behalf of the relevant Obligor;
(b) evidence that all Security Interests (other than Security Interests
permitted under clause 20.3(b)) in favour of third parties granted by
the relevant Obligor or any of its Subsidiaries have been released;
(c) all third party consents required for the creation of any Security
Interest contained in any Security Document.
5. Share Security: if the Security Document to be executed by the relevant
Obligor creates a Security Interest over shares in a Subsidiary of that
Obligor:
(a) where such Subsidiary is not itself an Obligor, a certified copy of
the memorandum and articles of association (or other constitutional
documents) of such Subsidiary in a form acceptable to the Facility
Agent; and
(b) stamped executed but undated stock transfer forms in respect of such
shares.
6. Riverdeep Group Finance Limited: a certificate from Riverdeep Group Finance
Limited in the agreed form certifying certain matters for the purpose of
the opinion to be issued by Xxxxxx and Calder.
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Part 4 - Corporate Documents in respect of each Obligor
1. Formalities certificate: a Formalities Certificate or, for US Obligors, an
incumbency certificate.
2. Constitutional Documents: a certified copy of the memorandum and articles
of association (or other constitutional documents) of the Obligor in form
acceptable to the Facility Agent.
3. Certificate of Incorporation: a certified copy of the certificate of
incorporation (or equivalent), and the certificates of incorporation on
change of name (if any), relating to the Obligor.
4. Board Resolutions: a certified copy of a resolution of the directors (or
equivalent) of the Obligor approving the transactions and matters
contemplated by this agreement, the other Senior Finance Documents and the
Transaction Documents and approving the execution, delivery and performance
hereof and thereof and authorising named persons to sign this agreement,
the other Senior Finance Documents and the Transaction Documents to which
it is or is to be a party and any documents to be delivered by such Obligor
pursuant hereto or thereto.
5. Shareholders Resolutions: if required under its constitutional or governing
documents, a certified copy of a resolution of the shareholders of the
Obligor approving the transactions and matters contemplated by this
agreement, the other Senior Finance Documents and the Transaction Documents
to which (in each case) such Obligor is or is to be a party.
6. Approvals: evidence that all approvals, authorisations, consents, licences,
exemptions, filings, notarisations and registrations necessary for any of
the transactions contemplated by the Senior Finance Documents so far as
they relate to the Obligor and their validity and/or enforceability have
been obtained and are in full force and effect.
7. Process Agent: if the Obligor is incorporated outside England and Wales, an
appointment of a process agent in England for acceptance of service of
process.
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SCHEDULE 5
Part 1 - Drawdown Request - Advances
To: o as Facility Agent
Attention: o
From: [Borrower]
Date: o
Dear Sirs,
Re: $o credit agreement dated o (the "Credit Agreement")
We request a Drawing of the [Term A/Term B/Revolving] Facility as follows:
(a) Amount: o
(b) Currency: o
(c) Drawdown Date: o
(d) Interest Period: o
(e) Payment should be made to: o
(f) The Borrower is: o
(1) We confirm that [no Drawstop Default has occurred](2):
[or (i) the representations and warranties made in clause 19 (Representations
and Warranties) of the Credit Agreement stipulated as being made or
repeated on the date of this Drawdown Request are true and accurate as
if made in relation to the facts and circumstances existing on that
date; and
(ii) no Default has occurred and is continuing or will occur as a result of
the proposed Advance being made. ]
Terms defined in the Credit Agreement have the same meanings when used in this
request.
...........................
[Authorised Signatory]
for and on behalf of
[Borrower]
________________
(1) Need not be included for rollover of Revolving Advances.
(2) Select this wording if the advance is an Offer Utilisation
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Part 2 - Drawdown Request - Bank Guarantees
To: o as Facility Agent
Attention: o
From: [Borrower]
Date: o
Dear Sirs,
Re: $o credit agreement dated o (the "Credit Agreement")
We request a Drawing of the Revolving Facility by way of issue of a Bank
Guarantee as follows:
(a) Amount: o
(b) [Currency: o]
(c) Drawdown Date: o
(d) Beneficiary: o
(e) Expiry Date: o
(f) Obligation to be guaranteed: o
(g) The Borrower is: o
We confirm that [no Drawstop Default has occurred](3):
[or (i) the representations and warranties made in clause 19
(Representations and Warranties) of the Credit Agreement
stipulated as being made or repeated on the date of this Drawdown
Request are true and accurate as if made in relation to the facts
and circumstances existing on that date; and
(ii) no Default has occurred and is continuing or will occur as a
result of the proposed Advance being made. ]
We attach the form of the proposed Bank Guarantee.
Terms defined in the Credit Agreement have the same meanings when used in this
request.
...........................
[Authorised Signatory]
for and on behalf of
[Borrower]
___________
(3) Select this wording if the Advance is an Offer Utilisation.
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SCHEDULE 6
Transfer Certificate
To: Barclays Bank PLC as Facility Agent
for and on behalf of the Obligors and the Finance Parties (each as
defined in the Credit Agreement referred to below).
This transfer certificate (this "Certificate") relates to a credit agreement
dated o between, o (together the "Obligors"), the banks and financial
institutions named in that agreement as lenders and Barclays Bank PLC as
Facility Agent and Security Agent (as from time to time amended the "Credit
Agreement"). Terms defined in the Credit Agreement shall, unless otherwise
defined in this Certificate, have the same meanings when used in this
Certificate.
1. Transferor confirmation and request
[name of Transferor] (the "Transferor") by its execution of this
Certificate:
(a) requests [name of Transferee] (the "Transferee") to accept and
procure, in accordance with clause 27.4 (Transfers by Lenders), the
transfer to the Transferee of the portion of the Transferor's
participation in the Facilities (and in the Advances made by it) as
specified in schedule 1 to this Certificate (the "Transfer Rights") by
counter-signing this Certificate and delivering it to the Facility
Agent at its address for notices under the Credit Agreement, so as to
take effect on the date specified in schedule 2 to this Certificate
(the "Transfer Date"); and
(b) confirms that the details which appear in schedule 1 to this
Certificate accurately record, the amount of the Transferor's
Commitments and the principal amount of the Transfer Rights at the
date of this Certificate.
2. Transferee request
The Transferee, by its execution of this Certificate, requests each Obligor
and each Finance Party to accept this Certificate as being delivered under
and for the purposes of clause 27.4 (Transfers by Lenders), so as to take
effect in accordance with the terms of that clause on the Transfer Date.
3. Transfer fee
The Transferee shall pay to the Facility Agent for the Facility Agent's own
account a transfer fee of (pound) o, as specified in 27.5 (Fee).
4. Transferee representations
The Transferee:
(a) confirms that it has received from the Transferor a copy of the Credit
Agreement, together with all other documents and information which it
has requested in connection with the Credit Agreement;
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(b) confirms that it has not relied, and will not after the date of this
Certificate rely, on the Transferor or any other Finance Party to
check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any of those
documents or that information;
(c) agrees that it has not relied, and will not after the date of this
Certificate rely, on the Transferor or any other Finance Party to
assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Parent
or any other party to the Credit Agreement;
(d) represents and warrants to the Transferor and each other Finance Party
that it has the power to become a party to the Credit Agreement as a
Lender on the terms set out in the Credit Agreement and this
Certificate and has taken all necessary steps to authorise execution
and delivery of this Certificate;
(e) acknowledges the limitations on the Transferor's obligations set out
in clause 27.7 (Limitation of Responsibility of Transferor);
(f) agrees that if any Transfer Rights are rescheduled or renegotiated,
the Transferee and not the Transferor will be subject to the
rescheduled or renegotiated terms; and
(g) confirms that it has duly executed and delivered to the Facility Agent
a Creditor Accession Deed.
5. Transferee covenants
The Transferee undertakes with the Transferor and each other party to the
Credit Agreement that it will perform in accordance with its terms all
those obligations which, by the terms of the Credit Agreement, will be
assumed by it following delivery of this Certificate to the Facility Agent.
6. Exclusion of Transferor's liabilities
Neither the Transferor nor any other Finance Party makes any representation
or warranty nor assumes any responsibility in relation to the legality,
validity, effectiveness, adequacy or enforceability of the Senior Finance
Documents and assumes no responsibility for the financial condition of the
Parent or any other party to the Senior Finance Documents or for the
performance and observance by the Parent or any other Obligor of any of its
obligations under the Senior Finance Documents and all of those conditions
and warranties, whether express or implied by law or otherwise, are hereby
excluded.
7. Novation
On execution of this Certificate by the Facility Agent (on behalf of each
of the parties to this agreement other than the Transferor and the
Transferee), the Transferee will become a party to the Credit Agreement on
and with effect from the Transfer Date in substitution for the Transferor
in relation to those rights and obligations which, by the terms of the
Credit Agreement and this Certificate, are assumed by the Transferee.
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8. Revolving Commitments
To the extent that this Certificate operates to novate Term A Commitment,
Term B Commitments or Revolving Commitments, each Issuing Lender has
consented to that novation in accordance with clause 27.2 (Assignments and
transfers by Lenders).
9. Law
This Certificate (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this Certificate)
shall be governed by and construed in accordance with English Law.
IN WITNESS of which the parties to this Certificate have duly executed this
Certificate on the date which appears at the end of this Certificate.
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Schedule 1 to Transfer Certificate
Transferor's existing Term A Commitment: $o
Transferor's existing Term B Commitment: $o
Transferor's existing [Revolving] Commitment: $o
Portion of Transferor's existing [Term A/B/Commitment/participation in Term
A/B/Term $o Advances] to be transferred:
Portion of Transferor's existing [Revolving] Commitment to be transferred: $o
Portion of Transferor's existing Contingent Liability under any relevant Bank
Guarantee to $o be transferred
[Participation in Revolving Advance(s) to be transferred:
Revolving Advance 1: Participation: $ o Interest Period: o months, Maturity Date: 200o
Revolving Advance 2: Participation: $ o Interest Period: o months, Maturity Date: 200o
[Revolving Advance o :] Participation: $ o Interest Period: o months, Maturity Date: 200o
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Schedule 2 to Transfer Certificate
Particulars relating to the Transferee
Transfer Date:
Lending Office:
Contact Name:
Account for Payments:
Address for Notices:
Telephone:
Facsimile:
Signatories to Transfer Certificate
[Transferor] [Transferee]
By: .................... By: ....................
Date: o Date: o
[Facility Agent]
By: ....................
Date: o
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SCHEDULE 7
Part 1 - Accession Document
THIS DEED is made on
BETWEEN:
(1) o (a company incorporated in o [with registered number o]) (the "New
Obligor");
(2) o (a company incorporated in o [with registered number o]) (the "Parent")
for itself and as agent for the existing Obligors;
(3) o in its capacity as Facility Agent under the Credit Agreement; and
(4) o in its capacity as Security Agent under the Credit Agreement.
WHEREAS:
(A) This deed is entered into in connection with a $o credit agreement (the
"Credit Agreement") between, amongst others, (1) the Parent, (2) Loan
Noteco, (3) the companies named in the Credit Agreement as Borrowers and/or
Guarantors and (4) Barclays Bank PLC and The Royal Bank of Scotland plc as
Joint Mandated Lead Arrangers, (5) the financial institutions defined
therein as Lenders and (6) Barclays Bank PLC as Facility Agent and Security
Agent.
(B) This deed has been entered into to record the admission of the New Obligor
as a [Borrower/Guarantor] under the Credit Agreement and as an Obligor
under the Intercreditor Deed.
IT IS AGREED as follows:
1. DEFINITIONS
Words and expressions defined in the Credit Agreement have the same
meanings when used in this deed.
2. ADMISSION OF NEW OBLIGOR
2.1 The New Obligor agrees to become:
(a) a [Borrower/Guarantor] under the Credit Agreement and agrees to be
bound by the terms of the Credit Agreement as a [Borrower]/Guarantor];
and
(b) an Obligor under the Intercreditor Deed and agrees to be bound by the
terms of the Intercreditor Deed as an Obligor.
2.2 The New Obligor confirms the appointment of the Parent as its agent on the
terms of clause o of the Credit Agreement and clause o of the Intercreditor
Deed and as its process agent for the purposes of clause o of the Credit
Agreement.
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2.3 The New Obligor confirms that its address details for notices in relation
to clause 25 (Notices) are as follows:
Address: o
Facsimile: o
Attention of: o
2.4 The parties to this deed other than the New Obligor confirm their
acceptance of the New Obligor as a [Borrower/Guarantor] for the purpose of
the Credit Agreement and as an Obligor for the purpose of the Intercreditor
Deed.
3. GUARANTEE LIMITED
3.1 The New Obligor's obligations under clause 17 of the Senior Credit
Agreement will not extend to any sum due owing or incurred in relation to
any of the Facilities to the extent utilised for a purpose specified in
clause 2.2(a)(i) to (ii) of the Senior Credit Agreement (the "Offer
Obligations") until such time as the New Obligor has executed and delivers
a Guarantee Increase Deed having first completed the necessary financial
assistance procedures.
3.2 In circumstances where clause 3.1 applies, following the completion of the
necessary financial assistance procedures the New Guarantor will promptly
execute and deliver a Guarantee Increase Deed.
3.3 Until all necessary financial assistance procedures have been completed,
nothing in this deed will require the New Obligor to take or refrain from
taking any action, or exercising any powers which would otherwise
constitute unlawful financial assistance pursuant to Section 60 of the
Irish Companies Act, 1963.
4. REPRESENTATIONS
The New Obligor represents and warrants in the terms set out in 19.2
(Incorporation) to 19.5 (No contravention) inclusive and acknowledges that
the Facility Agent and the Security Agent enter into this Accession
Document in full reliance on those representations and warranties.
5. LAW AND JURISDICTION
5.1 This deed (and any dispute, controversy, proceedings or claim of whatever
nature arising out of or in any way relating to this deed) shall be
governed by and construed in accordance with English law.
5.2 [The New Obligor and Facility Agent hereby irrevocably waive all right to a
trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Accession Document or any Senior Finance Document or the
transactions contemplated thereby.](4)
6. COUNTERPARTS
This Accession Document may be executed in two or more counterparts, each
of which shall constitute an original, but all of which, when taken
together shall constitute one instrument.
IN WITNESS whereof this deed has been executed on the date first above written.
__________
(4) Only relevant to US Obligors
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Signatories to Accession Document
Signed as a deed by [NEW OBLIGOR] acting by a )
director and its secretary/two directors )
)
Director
Secretary/Director
OR:
The Common Seal of )
[NEW OBLIGOR] )
was affixed hereunto in the presence of: )
Director
Secretary/Director
The Parent
[Name]
By: ..........................
for itself and as agent
for and on behalf of
the Existing Borrowers and the
Existing Guarantors
The Facility Agent
[Name]
By: ..........................
for itself and as Facility Agent
on behalf of the Lenders
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The Security Agent
[Name]
By: ..........................
for itself and as Security Agent
on behalf of the Lenders
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Part 2 - Guarantee Increase Deed
To: The Governor and Company of the Bank of Scotland, as Facility Agent
From: [Guarantor] (the "Guarantor")
Dated: o
Dear Sirs,
We refer to an agreement (the "Senior Credit Agreement") dated o 2003 and made,
amongst others, between (1) Parent, (2) Loan Noteco, (3) the companies named in
the Credit Agreement as Borrowers, (4) the companies named in the Credit
Agreement as Guarantors (5) Barclays Bank PLC and The Royal Bank of Scotland plc
as Joint Mandated Lead Arrangers, (6) the financial institutions defined therein
as Lenders and (7) Barclays Bank PLC as Facility Agent and Security Agent.
1. Terms defined in the Senior Credit Agreement shall bear the same meaning
herein.
2. By executing an Accession Document, the Guarantor guaranteed performance of
obligations under the Senior Finance Documents on the terms set out in
clause 17 (Guarantee and Indemnity) of the Senior Credit Agreement. By the
terms of clause 3 of the Accession Document, the Guarantor's obligations
did not extend to any of the Offer Obligations (as defined therein).
3. The Guarantor has now complied with the procedures in section 60 of the
Irish Companies Act, 1963 and as a result may lawfully guarantee the Offer
Obligations.
4. Accordingly, by executing this Deed, the Guarantor confirms and
acknowledges that the guarantee and indemnity obligations undertaken by it
under the Senior Credit Agreement are extended to include, without
limitation, the Offer Obligations with effect from the date of this Deed.
5. Nothing in this Deed will prejudice the Guarantor's existing obligations
under the Senior Finance Documents which will continue in full force and
effect. In particular, but without limitation, all security interests
granted by the Guarantor in favour of the Security Agent will additionally
operate to secure the Guarantor's obligations in respect of the Offer
Obligations.
6. It is intended that this document takes effect as a deed notwithstanding
the fact that a party may only execute this document under hand.
7. This Deed constitutes a Senior Finance Document and shall be governed by
English law.
Executed as a deed by )
[GUARANTOR] )
acting by )
Director
Director/Secretary
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The Common Seal of )
[GUARANTOR] )
was affixed hereunto in the presence of: )
Director
Secretary/Director
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SCHEDULE 8
Mandatory Cost formulae
1. The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Facility Agent shall calculate, as a percentage rate, a
rate (the "Additional Cost Rate") for each Lender, in accordance with the
paragraphs set out below. The Mandatory Cost will be calculated by the
Facility Agent as a weighted average of the Lenders' Additional Cost Rates
(weighted in proportion to the percentage participation of each Lender in
the relevant Advance) and will be expressed as a percentage rate per annum.
3. The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender
to the Facility Agent. This percentage will be certified by that Lender in
its notice to the Facility Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender's participation in all
Advances made from that Lending Office) of complying with the minimum
reserve requirements of the European Central Bank in respect of loans made
from that Lending Office.
4. The Additional Cost Rate for any Lender lending from a Lending Office in
the United Kingdom will be calculated by the Facility Agent as follows:
in relation to a Sterling Advance:
AB+C(B-D)+Ex0.01
-----------------per cent. per annum
100--(A+C)
in relation to an Advance in any currency other than Sterling:
Ex0.01
------ per cent. per annum.
300
Where:
A is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Lender is from time to time
required to maintain as an interest free cash ratio deposit with the
Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Margin and the
Mandatory Cost and, if the Advance is an overdue amount (as defined in
clause 8.5 (Default interest), the additional rate of interest
specified in paragraph (a) of clause 8.5 (Default interest)) payable
for the relevant Interest Period on the Advance.
C is the percentage (if any) of Eligible Liabilities which that Lender
is required from time to time to maintain as interest bearing Special
Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England to the
Facility Agent on interest bearing Special Deposits.
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E is designed to compensate Lenders for amounts payable under the Fees
Rules and is calculated by the Facility Agent as being the average of
the most recent rates of charge supplied by the Reference Banks to the
Facility Agent pursuant to paragraph 7 below and expressed in pounds
per (pound)1,000,000.
5. For the purposes of this Schedule:
"Eligible Liabilities" and "Special Deposits" have the meanings given
to them from time to time under or pursuant to the Bank of England Act
1998 or (as may be appropriate) by the Bank of England;
"Fees Rules" means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force
from time to time in respect of the payment of fees for the acceptance
of deposits;
"Fee Tariffs" means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee or
zero rated fee required pursuant to the Fees Rules but taking into
account any applicable discount rate); and
"Tariff Base" has the meaning given to it in, and will be calculated
in accordance with, the Fees Rules.
6. In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5 per cent. will be included in the formula
as 5 and not as 0.05). A negative result obtained by subtracting D from B
shall be taken as zero. The resulting figures shall be rounded to four
decimal places.
7. If requested by the Facility Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply
to the Facility Agent, the rate of charge payable by that Reference Bank to
the Financial Services Authority pursuant to the Fees Rules in respect of
the relevant financial year of the Financial Services Authority (calculated
for this purpose by that Reference Bank as being the average of the Fee
Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per (pound)1,000,000 of the Tariff Base of that
Reference Bank.
8. Each Lender shall supply any information required by the Facility Agent for
the purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information on
or prior to the date on which it becomes a Lender:
(a) the jurisdiction of its Lending Office; and
(b) any other information that the Facility Agent may reasonably require
for such purpose.
Each Lender shall promptly notify the Facility Agent of any change to the
information provided by it pursuant to this paragraph.
9. The percentages of each Lender for the purpose of A and C above and the
rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Facility Agent based upon the information supplied to it
pursuant to paragraphs 7 and 8 above and on the assumption that, unless a
Lender notifies the Facility Agent to the contrary, each Lender's
obligations in relation to cash ratio deposits and Special Deposits are the
same as those of a typical bank from its jurisdiction of incorporation with
a Lending Office in the same jurisdiction as its Lending Office.
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10. The Facility Agent shall have no liability to any person if such
determination results in an Additional Cost Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8
above is true and correct in all respects.
11. The Facility Agent shall distribute the additional amounts received as a
result of the Mandatory Cost to the Lenders on the basis of the Additional
Cost Rate for each Lender based on the information provided by each Lender
and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Facility Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Additional Cost Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all parties.
13. The Facility Agent may from time to time, after consultation with the
Parent and the Lenders, determine and notify to all Parties any amendments
which are required to be made to this schedule in order to comply with any
change in law, regulation or any requirements from time to time imposed by
the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any other authority which replaces all or
any of its functions) and any such determination shall, in the absence of
manifest error, be conclusive and binding on all parties.
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SCHEDULE 9
Obligors
Part 1 - Initial Obligors
The Parent will execute, on the date of this agreement:
(a) an Irish Debenture;
(b) a Hedging Debenture; and
(c) the Share Pledge.
Loan Noteco will execute an English Debenture on the date of this agreement.
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Part 2 - Target Companies
1. Target will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a Borrower and
a Guarantor and an Obligor under the Intercreditor Deed;
(b) an Irish Debenture (including an equitable mortgage over any
properties owned by it and a charge over shares in any direct
subsidiary);
(c) a Security Document in respect of its shares in Edvantage Software,
Inc.;
(d) a charge over the shares held by it in Riverdeep Group Finance
Limited;
2. Riverdeep Interactive Learning Limited will execute within 21 days of the
Unconditional Date:
(a) an Accession Document pursuant to which it will become a Guarantor and
an Obligor under the Intercreditor Deed;
(b) an Irish Debenture (including an equitable mortgage over any
properties owned by it and a charge over any shares in any direct
Subsidiary);
(c) a Security Document in respect of its shares in Riverdeep, Inc.;
(d) a NY Security Agreement;
3. Riverdeep, Inc. will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a Guarantor and
an Obligor under the Intercreditor Deed;
(b) a Stock Pledge Agreement over any shares in any direct Subsidiary;
(c) a NY Security Agreement;
4. Broderbund (Properties) LLC will execute within 21 days of the
Unconditional Date:
(a) an Accession Document pursuant to which it will become a Guarantor and
an Obligor under the Intercreditor Deed;
(b) a NY Security Agreement;
5. Broderbund LLC will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a Guarantor and
an Obligor under the Intercreditor Deed;
(b) a NY Security Agreement.
6. Riverdeep Group Finance Limited will execute within 21 days of the
Unconditional Date an English Debenture.
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7. Edvantage Software, Inc. will execute within 21 days of the Unconditional
Date a NY Security Agreement.
8. Edvantage Software, Inc. will execute upon the later of (i) 21 days of the
Unconditional Date and (ii) the date of the transfer of the shares in
Riverdeep, Inc. by Riverdeep Interactive Learning Limited referred to in
the KPMG Tax Structure Paper, a Stock Pledge Agreement over any shares in a
direct Subsidiary.
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Part 3 - Target Companies Post Whitewash Security
Each of the companies set out below will execute a Hedging Debenture and a
Guarantee Increase Deed within 90 days from the Unconditional Date:
Target
Riverdeep Interactive Learning Limited
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SCHEDULE 10
Dormant Companies
Fastbreak Limited
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Signatories to the Credit Agreement
The Parent
HERTAL ACQUISITIONS PLC
By: XXXXX XXXXXXXX XXXXXXX XXXXXXXX
Notice Details
Address: 3rd Xxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxx
Xxxxxx 0
Facsimile: 353 1 670 7626
Attention: Xxxx Xxxxxxxx/Xxxxx XxXxxxxx
Guarantors
The Parent
HERTAL ACQUISITIONS PLC
By: XXXXX XXXXXXXX XXXXXXX XXXXXXXX
Notice Details as above
Loan Noteco
HERTAL (INVESTMENTS) LIMITED
By: XXXXX XXXXXXXX XXXXXXX XXXXXXXX
Notice Details as above
The Joint Mandated Lead Arrangers
BARCLAYS LEVERAGED FINANCE
(a division of Barclays Bank PLC)
By: XXXXXX XXXXXXX
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Notice Details
Address: 0xx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile: 020 7699 2770
Attention: Xxxxxx Xxxxxxx
THE ROYAL BANK OF SCOTLAND PLC
By: XXXXX TSOROMOCOS
Notice Details
Address: 0xx Xxxxx
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Facsimile: 020 7375 5265
Attention: Xxxx Xxxxx
Original Term Lenders and Revolving Lenders
BARCLAYS BANK PLC
By: XXXXXX XXXXXXX
Notice Details
Address: 0xx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Facsimile: 020 7699 2770
Attention: Xxxxxx Xxxxxxx
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THE ROYAL BANK OF SCOTLAND PLC
By: XXXXX TSOROMOCOS
Notice Details
Address: 0xx Xxxxx
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Facsimile: 020 7375 5265
Attention: Xxxx Xxxxx
The Facility Agent and Security Agent
BARCLAYS BANK PLC
By: XXXXXX XXXXXXX
Notice Details
Address: 7th Floor
5 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Facsimile: 020 7773 4893
Attention: Xxxxxx Xxxx
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