Big Flower Limited
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Dear Sirs,
We, Bankers Trust Company acting through our branch at [London] (the
"Bank"), set out below the terms and conditions on which we are prepared to
provide to you, Big Flower Limited, (the "Borrower") and to Olwen Direct Mail
Limited ("Olwen"), provided that Olwen, the Bank and the Borrower execute the
Deed of Accession attached to this letter as Appendix C, the following loan
facility:-
1. Amount and Commitment Period
The amount of the facility is L27,000,000 (the "Facility Amount"). The
facility shall be available to the Borrower for drawing by an initial drawing
of L23,287,685.84 and thereafter for subsequent drawings each of a minimum of
L200,000 (except where the remaining undrawn amount of the facility is less
than L200,000 in which case the amount available up to the Facility Amount
may be drawn) and an integral multiple of L200,000 on any day on which banks
in London are open and on which Sterling deposits may be dealt in on the
London inter-bank market and on which commercial banks and foreign exchange
markets are open for business in London and New York City (a "Business Day")
during the period (the "Commitment Period") ending on 30th November, 1997 if:-
1.1 the conditions precedent listed in Clause 7.1 are fulfilled to the
Bank's satisfaction; and
1.2 not later than 5 p.m. (London time) on the Business Day preceding
the date of the relevant drawing, the Bank has received from the Borrower a
notice of drawing in the form attached as Appendix A except that in the case
of the first drawing under the facility, the Borrower may submit its notice
of drawing not later than 2 p.m. on the Business Day of such drawing.
2. Purpose
The Borrower shall use the entire proceeds of each drawing for the
acquisition of Olwen, the refinancing of existing indebtedness of Olwen and
for the general corporate purposes of the Borrower and its subsidiaries
(including working capital), but the Bank need not check that the Borrower
does so.
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3. Repayment, Prepayment and Cancellation
3.1 Subject as otherwise provided in this letter, the principal amount of
all outstanding drawings shall be repaid on 1st December 1997 (the "Final
Maturity Date").
3.2 The Borrower may prepay any drawing or any part thereof which is a
minimum of L200,000 and an integral multiple of L200,000, on the last day of
any period for determining interest in relation to that drawing in accordance
with Clause 4 (each such period and each period for determining interest in
accordance with Clause 10.2, an "Interest Period") if the Borrower provides
the Bank with not less than one Business Day's prior notice of the date and
amount of the prepayment.
3.3 Any notice of prepayment under this letter will oblige the Borrower
to prepay in accordance with that notice. The Borrower may not repay or
prepay all or part of the loan except as expressly provided in this letter.
Any amount prepaid may be reborrowed.
3.4 Any repayment or prepayment shall be made together with all unpaid
interest accrued on the amount of that repayment or prepayment and any other
sum then due under this letter.
3.5 The Borrower may by not less than one Business Day's prior notice to
the Bank cancel all or any part (but if in part in a minimum principal amount
of L200,000 and in an amount which is an integral multiple of L200,000) of
the Bank's unutilised commitment hereunder.
4. Interest
4.1 Interest will be calculated and payable on each drawing by reference
to successive Interest Periods. Interest accrued during an Interest Period
shall be paid by the Borrower to the Bank on the last day of that Interest
Period unless provided otherwise in this letter. Each Interest Period shall
be of one, two, three or four weeks' duration, as selected by the Borrower in
a notice received by the Bank not later than 2 p.m. (London time) on the
Business Day immediately preceding the beginning of that Interest Period
except that:--
(a) any Interest Period which would otherwise end on a non-Business
Day shall instead end on the next Business Day unless it would thereby end
in the next calendar month, in which case it shall end on the immediately
preceding Business Day and each subsequent Interest Period shall end on
the last Business Day in the appropriate month;
(b) subject to the above exceptions, any Interest Period for which no
effective selection notice is received by the Bank shall be of one week's
duration;
(c) if an Interest Period would otherwise overrun the Final Maturity
Date, such Interest Period shall be shortened so that it ends on the Final
Maturity Date.
4.2
(a) The rate of interest applicable in relation to any Interest
Period shall be the rate per annum (as determined by the Bank) equal to
the sum (rounded up to the nearest four decimal points) of:--
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(i) the Margin (namely 1.25%); and
(ii) LIBOR (being on any date the rate at which the Bank is
offered Sterling deposits by prime banks in the London inter-bank
market at or about 11.00 a.m. on such date in an amount equivalent
to the relevant drawing and with a maturity equivalent to the
duration of such Interest Period) in effect on the first day of such
Interest Period; and
(iii) the MLA Costs in relation to that Interest Period or part
thereof as determined in accordance with Appendix B. The Bank shall
notify the Borrower of the MLA Costs applicable to that Interest
Period as soon as practicable after the determination thereof.
(b) However, in relation to any Interest Period for which (i) the
Bank is not offered deposits as contemplated by Clause 4.2.1(ii) or (ii)
the Bank determines that the deposits so offered to the Bank are not
sufficient to enable the Bank to fund (having regard to its other funding
requirements) the amount to which that Interest Period relates, then the
Bank shall, as soon as practicable, notify the Borrower and shall for a
period of up to five Business Days negotiate with the Borrower in good
faith with a view to agreeing a substitute basis for determining the rate
of interest applicable during that particular Interest Period. If a
substitute basis is agreed, it shall take effect retrospectively from
the commencement of that Interest Period. If a substitute basis is not
agreed then with retrospective effect from the commencement of that
Interest Period, the rate of interest applicable to that Interest Period
shall be calculated in accordance with Clause 4.2.1 except that there
shall be substituted for the rate referred to in Clause 4.2.1(ii) the
percentage per annum reasonably determined by the Bank to be that which
expresses the cost to the Bank of funding the relevant drawing for that
Interest Period by whatever means the Bank reasonably determines to be
appropriate.
5. Payments
5.1 Each payment by the Borrower under this letter shall be made in
Sterling so as to be received by the Bank in immediately available cleared
funds, free and clear of any restriction or condition, not later than 2 p.m.
(London time) on the due date by transfer to such account of the Bank as the
Bank may from time to time designate.
5.2 Each such payment pursuant to Clause 5.1 shall be made without any
set-off or counterclaim or any deduction or withholding on account of United
Kingdom tax except to the extent required by law, in which event the Borrower
shall pay the Bank such additional sum as will result in the Bank receiving
on the due date of the relevant payment (free from any liability in relation
to any such deduction or withholding) a net sum equal to the full amount
which would have been receivable had no such deduction or withholding been
required. The Borrower shall on request supply the Bank with evidence
satisfactory to the Bank of the relevant deduction or withholding. However no
such additional sum shall be payable if the Bank ceases to be a bank as
defined in Section 840A of the Income and Corporation Taxes Act 1988 and
which is within the charge to UK corporation tax as regards any interest
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received by it hereunder otherwise than as a result of the introduction of,
change in, or any change in the interpretation, administration or application
of, any law or regulation or any practice or concession of the UK Inland
Revenue occurring after the date of this letter. Without prejudice to the
foregoing provisions of this Clause 5.2, if the Bank is required to make any
payment in respect of taxes on or in relation to any sum received or
receivable hereunder by the Bank or any liability in respect of any such
payment is asserted, imposed, levied or assessed against the Bank, upon
demand by the Bank, the Borrower shall indemnify the Bank against such
payment or liability, together with any interest, penalties and expenses
payable or incurred in connection therewith provided that this indemnity
shall not extend to any liability of the Bank arising from UK corporation tax.
5.3 Any payment which would otherwise be due on a non-Business Day shall
instead be due on the next Business Day.
6. Illegality and Increased Costs
6.1 If (a) the adoption of any applicable law, rule or regulation, any
change therein or any change in the interpretation or administration thereof,
after the date of this letter would make it unlawful for the Bank to perform
all or any of its obligations under this letter or (b) compliance by a Bank
(or its holding company) with any request or directive (whether or not having
the force of law) issued after the date of this letter by any central bank or
fiscal or other monetary authority with which it is customary for banks in
the relevant jurisdiction to comply would prevent the Bank from performing
all or any part of its obligations under this letter, its commitment
hereunder shall be cancelled upon prior written notification by the Bank to
the Borrower of the relevant circumstances, whereupon the Borrower shall, on
the date specified in such notice, repay the outstanding drawings hereunder
together with all accrued interest and all other amounts owing hereunder to
the Bank.
6.2 Subject to Clause 6.3, the Borrower shall on demand by the Bank pay
to the Bank the amount of any increased cost reasonably determined by the
Bank to be incurred by it (or its holding company) as a result of the
introduction of or any change in, or any change in the interpretation or
application of, any law or regulation or directive (including without
limitation any law or regulation or directive relating to taxation, or
reserve asset, special deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary control).
In this Letter "increased cost" means (i) an additional cost incurred by
the Bank (or its holding company) as a result of the Bank having entered
into, or performing, maintaining or funding its obligations under, this
Letter; or (ii) a reduction in any amount payable to the Bank or the
effective return to the Bank under this Letter or to the Bank (or its holding
company) on its capital; or (iii) the amount of any payment made by the Bank
or the amount of any interest or other return foregone by it calculated by
reference to any amount received or receivable by it from the Borrower.
6.3 Clause 6.2 does not apply to any increased cost (a) compensated for
pursuant to Clause 5.2, or (b) attributable to any change in the rate of tax
on the overall net income of the Bank imposed in the jurisdiction in which
its principal office for the time being is situate or (c) compensated for by
the MLA Costs.
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7. Conditions Precedent and Drawdown
7.1 The Bank shall not be obliged to advance any drawing under this
facility unless:--
(a) before the Borrower requests any drawing, the Bank has received
the following, in form and substance satisfactory to the Bank acting
reasonably (and has notified the Borrower upon such receipt that all the
conditions set out in this Clause 7.1 have been met to the satisfaction of
the Bank acting reasonably):
(i) the enclosed copy of this letter, countersigned and dated
on the Borrower's behalf;
(ii) a guarantee from Big Flower Press Holdings, Inc. (the
"Guarantor"), in form and substance agreed between the Bank and the
Borrower;
(iii) a certificate of incumbency in form and substance
satisfactory to the Bank acting reasonably, certified to the Bank's
reasonable satisfaction, attaching:--
(A) the Borrower's Memorandum and Articles of Association;
(B) a resolution of the Borrower's Board of Directors
approving this letter and authorising the countersignature of the
enclosed copy of this letter and the Share Charge and the giving
of any notice or the taking of any other action under or in
connection with this letter and the Share Charge;
(C) the names, titles and specimen signatures of the
persons authorised to take action as specified in Clause
7.1.1(iii)(b) above and those authorised to operate the facility;
(iv) a certificate of incumbency in form and substance
satisfactory to the Bank acting reasonably, certified to the Bank's
reasonable satisfaction, attaching:--
(A) the Guarantor's certificate of incorporation and
bylaws;
(B) a resolution of the Guarantor's Board of Directors
approving the Guarantee and authorising its execution and the
giving of any notice of the taking of any other action under
or in connection with the Guarantee;
(v) a legal opinion in form and substance agreed between the
Bank and the Borrower from Ashurst Xxxxxx Xxxxx, legal advisers to the
Borrower in England;
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(vi) a legal opinion in form and substance agreed between the
Bank and the Borrower from the General Counsel of the Guarantor in New
York;
(vii) evidence that Ashurst Xxxxxx Xxxxx has irrevocably accepted
its designation as the Guarantor's agent to receive service of
process as provided in Section 16.2 of the Guarantee, satisfactory in
form and substance to the Bank acting reasonably; and
(viii) within 45 days of this letter, management accounts of the
Borrower; and
(ix) a certificate issued by the Guarantor to the Bank
certifying compliance with the Credit Agreement or, in the case of any
breach under the Credit Agreement, certifying that such breach has
been waived, in the agreed form attached hereto as Appendix C;
(b) no Event of Default specified in Clause 10.2 (nor any event
which, with the giving of any notice, and/or the expiry of any grace
period, provided for in Clause 10.2, would constitute an Event of Default
(hereinafter referred to as a "Default")) has occurred on or before the
proposed date of the relevant drawing or will occur as a result of the
relevant drawing being made.
7.2 The proceeds of each drawing will be made available to the Borrower
or as the Borrower directs in immediately available cleared funds, free and
clear of any restriction or condition, not later than 2 pm (London time) on
the due date by transfer to such account of the Borrower with such bank in
London as the Borrower shall have specified in the Notice of Drawing.
8. Representation and Warranties
By countersigning the copy of this letter, the Borrower will
represent and warrant to the Bank as follows (each such representation and
warranty to survive such countersignature and the making of any drawing
hereunder):--
8.1 The Borrower is incorporated and existing under the laws of England
as a limited liability company and has full power and authority to enter
into, exercise its rights and perform and comply with its obligations
hereunder and under the Share Charge;
8.2 All action, conditions and things required by the Borrower's
Memorandum and Articles of Association and the laws of England to be taken,
fulfilled and done (including the obtaining of any consents, or the making of
any registrations or filings) in order to:-
(a) enable the Borrower lawfully to agree to be bound by, enter
into, exercise its rights and perform and comply with its obligations
hereunder and under the Share Charge;
(b) to ensure that those obligations are legal, valid, binding and
enforceable; and
(c) to make this letter and the Share Charge and the Borrower's
countersignature hereunder admissible in evidence in the English courts
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have been taken, fulfilled and done;
8.3 The obligations expressed to be assumed by the Borrower hereunder
and under the Share Charge are legal, valid, binding and enforceable;
8.4 Neither the Borrower, the Guarantor nor any of their respective
subsidiaries is in default in respect of any obligation nor does any default
exist in respect of, or under any agreement relating to, any of its
indebtedness for or in respect of moneys borrowed or raised (whether as
principal debtor or otherwise) which default has or could reasonably be
expected to have a material adverse effect on the Borrower's ability to
perform and comply with its obligations hereunder or the Guarantor's ability
to perform and comply with its obligations under the Guarantee;
8.5 No Event of Default or Default (nor any event referred to in Clause
7.1(a)(ix)) has occurred or will occur as a result or making any drawing under
this facility;
8.6 It is not necessary in order to ensure the legality, validity,
enforceability or admissibility in evidence of this letter, the Share Charge
or the Guarantee that any stamp, registration or similar duty or tax be paid
in England and Wales or in the States of Delaware or New York or under the
federal laws of the United States of America on or in relation to such
documents;
8.7 No litigation, arbitration or administrative proceedings are
current or, to its knowledge, pending or threatened, which could reasonably
be expected to be adversely determined or if pursued to their final
conclusions whether or not adversely determined, would have a material
adverse effect on the business or financial condition of the Borrower or its
ability to perform its obligations under this letter or the Share Charge;
8.8 All information given to the Bank in writing by or on behalf of the
Borrower concerning the Borrower, Olwen and their respective businesses,
affairs, assets or liabilities was when given and is on the date hereof (to
the best of the Borrower's knowledge) true and correct in all material
respects and (to the best of the Borrower's knowledge) no matter or fact has
not been disclosed in writing to the Bank which could render any such
information untrue or misleading in any material respect; and
8.9 Following the acquisition of Olwen, it will be the legal and
beneficial owner of the property which is the subject of the Share Charge with
full title guarantee, and the Share Charge will create an Encumbrance of the
type and with the priority that such Share Charge purports to create, over
all such property.
8.10 Each of the representations and warranties in this Clause will be
correct and complied with as though made on and as of the date of any Notice of
Drawing and the date of any drawing hereunder.
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9. Undertakings
By countersigning the copy of this letter, the Borrower will
undertake to the Bank that, so long as any sum remains to be drawn or remains
payable under this facility:--
9.1 It will notify the Bank of the occurrence of any Event of Default
(or of any event referred to in Clause 7.1(a)(ix)) within five Business Days
of becoming aware of the same;
9.2 It will not, and will cause its subsidiaries not to, create, incur,
assume or suffer to exist any Encumbrance on or with respect to any of its
properties, assets or revenues, whether now owned or hereafter acquired, to
secure any Indebtedness (as defined in the Credit Agreement) other than
Permitted Liens (as defined in the Credit Agreement) or as contemplated in
this letter.
9.3 Immediately on the acquisition by it of Olwen, it shall enter into
the Share Charge and provide any documents or other instruments required to
be provided to the Bank pursuant thereto.
9.4 It shall duly and punctually perform and observe all terms,
covenants and conditions on its part to be performed and observed under the
Share Charge and shall not permit Olwen to re-register as an unlimited
company;
9.5 It shall ensure that its payment obligations under this letter
shall at all times be direct, unconditional, and general obligations and
shall at all times rank at least pari passu in right of payment with all
its other outstanding unsubordinated indebtedness;
9.6 It shall keep its business and assets insured and use all
reasonable efforts to procure that the business and assets of its
subsidiaries are insured with reputable underwriters or insurance companies
in the manner and to the extent usual for such business and assets and, from
time to time upon the reasonable request of the Bank and to the extent
practicable, furnish the Bank with evidence as to its compliance with its
obligations under this paragraph; and
9.7 It shall remain at all times a wholly owned subsidiary of the
Guarantor.
10. Events of Default
10.1 At any time after the occurrence (for whatever reason and whether
within or beyond the Borrower's control) of an Event of Default (as defined
below) the Bank, by written notice to the Borrower, may:
(a) terminate the Bank's commitment to lend hereunder;
(b) demand immediate repayment of the outstanding principal amount
of the drawings together with accrued interest (if any) and any other sums
payable hereunder;
(c) give written notice to the Guarantor to pay under the Guarantee;
and/or
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(d) if 30 days after giving notice to the Guarantor under paragraph
(c) above no payment under the Guarantee has been made, enforce all or any
part of its security constituted under the Share Charge.
10.2 The following shall each be an "Event of Default":
(a) The Borrower or the Guarantor fails to pay any principal sum
expressed to be due hereunder or under the Guarantee as and when provided in
this letter or the Guarantee, as applicable, or fails to pay any other
amount within three Business Days of the date such amount falls due
hereunder or under the Guarantee;
(b) Any representation, warranty or statement by the Borrower under
or in connection with this letter or the Share Charge or by the Guarantor
under the Guarantee is not complied with in any material respect, or is or
proves to have been incorrect in any material respect when made;
(c) The Borrower fails to perform or comply with any provisions
of Clauses 2, 4 or 5 of the Share Charge;
(d) The Guarantor fails to perform or comply with any of the
provisions of the Guarantee (other than payment obligations) and such
failure is not remedied within 30 days after notice of that failure has
been given to the Guarantor by the Bank;
(e) The Guarantee or the obligations of the Borrower under this
letter or the Share Charge shall, for any reason whatsoever, cease to be in
full force and effect or any person acting by or on behalf of the Guarantor
shall deny or disaffirm the Guarantor's obligations under the Guarantee;
(f) The security constituted by the Share Charge ceases to be
effective or is materially impaired;
(g) The Indebtedness of the Guarantor under the Credit Agreement
either (a) shall become capable of acceleration in accordance with
Section 10 thereof (as a result of the occurrence of an Event of Default
(as defined in the Credit Agreement), (b) is accelerated or placed on
demand or (c) is not paid when due and before the end of any applicable
grace period;
(h) An Event of Default as defined in Section 10.02 (in respect of
the Guarantor), 10.04, 10.05 or 10.09 of the Credit Agreement shall occur in
relation to the Borrower or the Guarantor (notwithstanding any provision to
the contrary in the Credit Agreement the Borrower is deemed to be a
Subsidiary and not an Insignificant Subsidiary for the purposes of this
Section 10.2(h)).
10.3 If the Borrower does not pay any sum expressed to be payable
hereunder as provided in this letter, the Borrower shall on demand pay
interest on the amount from time to time outstanding in respect of that
overdue sum for the period beginning on its due date and ending on the date
of its receipt by the Bank (both before and after judgment). The rate of
interest applicable shall be the rate per annum equal to the sum of 1% and
the rate which
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would be applicable under Clause 4.2 if that overdue sum were of principal.
If however the overdue sum is of principal and becomes due otherwise than on
the last day of an Interest Period, the first default Interest Period
applicable to that overdue sum shall end on the last day of the Interest
Period first-mentioned in this sentence and the rate of interest applicable
to that sum for that period shall be the sum of 1% and the rate applicable to
it immediately before it became due. Any such interest not paid on demand
shall itself bear interest accordingly.
10.4 The Borrower shall on demand indemnify the Bank against any
funding or other cost, loss, expense or liability (including loss of Margin)
which has been or will be sustained or incurred by the Bank as a result of
any Event of Default, or its receipt or recovery of all or any part of any
drawing or any overdue sum otherwise than on the last day of an Interest
Period relating thereto or any drawing duly requested failing to be made due
to any of the conditions precedent for such drawing specified in Clause 7 not
being satisfied.
11. Expenses
11.1 The Borrower will reimburse the Bank on demand:-
(a) all reasonable expenses (including reasonable legal fees)
incurred by the Bank in preparing and negotiating, executing and completing
the transactions contemplated in this letter, the Share Charge and the
Guarantee and any other documents referred to therein and all expenses
(including reasonable legal fees) incurred by the Bank in enforcing and/or
preserving any of its rights hereunder or under the Guarantee or the Share
Charge; and
(b) any stamp, registration or similar fees or taxes of any kind
payable in connection with this letter, the Guarantee or the Share Charge
and any penalty for late payment thereof.
11.2 The Borrower agrees to pay to the Bank a commitment fee (the
"Commitment Fee") in respect of the Commitment Period computed at a rate
equal to 0.375 per cent. per annum on the utilised commitment from time to
time of the Bank. Accrued Commitment Fee shall be due and payable in arrears
on the Final Maturity Date or such earlier date as the commitment shall be
terminated.
11.3 The Borrower agrees to pay to the Bank an up-front facility fee of
L33,750 upon signing this letter.
12. Accession
12.1 Each of the parties to this facility agrees that after the date of
this letter Olwen may become an Acceding Borrower to this facility on the
terms and conditions set out in this Clause 12, provided that Olwen shall
have no liability under this letter in respect of any drawing made by the
Borrower hereunder or any interest thereon or any other amounts payable
hereunder in respect thereof.
12.2 Olwen may become an Acceding Borrower under this letter if:
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12.2.1 the Borrower gives written notice to the Bank (such notice
to be, mutatis mutandis, in the form of the certificate delivered
pursuant to Clause 7.1(a)(iii), be accompanied by certified copies of
Olwen's most recent management accounts, its most recent audited accounts
and be otherwise in form and substance satisfactory to the Bank, acting
reasonably;
12.2.2 each of the Bank, Olwen and the Borrower executes and
delivers the Deed of Accession (attached to this letter as Appendix C);
12.2.3 the Bank receives a legal opinion from Ashurst Xxxxxx Xxxxx in
form and substance agreed between the Bank and the Acceding Borrower.
12.3 The Acceding Borrower shall use the entire proceeds of each drawing
for its working capital requirements, but the Bank need not check that the
Acceding Borrower does so.
12.4 Subject to the liability of the Acceding Borrower being limited as
aforesaid, following the satisfaction of the conditions specified in Clause
12.2:
12.4.1 Clauses 1, 3.1 to 3.4 (inclusive), 4, 5, 6, 7.2, 10.1, 10.2
and 10.3 of this letter shall apply to the Acceding Borrower and the words
"Borrower" shall be read as "Borrower or the Acceding Borrower, as the case
may be," (except that in Clause 10.1 notice of an Event of Default shall
always be provided to the Borrower);
12.4.2 Clauses 7.1(b), 10.4, 11.2 and 13 shall apply to the Acceding
Borrower and in these provisions the word "Borrower" shall be read as
"Borrower and/or the Acceding Borrower"; and
12.4.3 The Acceding Borrower shall represent and warrant to the
Bank and undertake to the Bank in the terms of Clauses 8 and 9 as if
references to the "Borrower" were references to the "Acceding Borrower" and
references to the Share Charge and Guarantee were deleted.
12.5 For the avoidance of doubt, only this Clause 12 and the provisions
specified in Clauses 12.4.1, 12.4.2 and 12.4.3 shall apply to the Acceding
Borrower and then only so far as imposing any liability on the Acceding
Borrower as aforesaid.
12.6 For the avoidance of doubt, the Borrower shall be jointly and
severally liable with the Acceding Borrower under this letter for all of the
Acceding Borrower's obligations hereunder.
13. Miscellaneous
13.1 In this letter:--
"Acceding Borrower" means Olwen which may become a borrower to this
facility in accordance with the terms and conditions set out in Clause 12.
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"Credit Agreement" means the credit agreement dated as of June 12, 1997
among, inter alia, Big Flower Press Holdings, Inc., as borrower, and Bankers
Trust Company, as Administrative Agent as amended, modified and/or varied
from time to time;
"Encumbrance" means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement or arrangement
having the effect of conferring security including security equivalents such
as finance leases, sale and re-purchase, sale and leaseback, sale of
receivables on a recourse basis, deferred purchases and title retention
agreements other than any such security interest or arrangement arising under
or in relation to the accounts receivable facility arrangements between the
Bank and the Guarantor and provided further that if there are any conflicts
between this letter and such arrangements the accounts receivable facility
arrangements shall prevail;
"Guarantee" means the guarantee described in Clause 7.1.1(ii);
"Guarantor" means Big Flower Press Holdings, Inc.
"Qualifying Bank" means at any time a bank as defined in Section 840A of
the Taxes Xxx 0000 for the purposes of Section 349 of that Act which is
within the charge to UK corporation tax as respects any interest payable or
paid to it under this letter.
"Share Charge" means the charge over the shares of Olwen to be granted
by the Borrower in favour of the Bank; and
"Sterling", "Pounds" and "L" means the lawful currency for the time being
of the United Kingdom;
13.2 Except as expressly provided herein, all notices and other
communications provided for hereunder shall be in writing and shall be by
facsimile or letter and shall be sent:-
13.2.1 to the Borrower at fax no.0000 000 0000 or x/x Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxx House, 5 Xxxxxx Street, London EC2A 2HA (in each
case marked for the attention of Xxxxxxx Xxxxxxx) and copied to Xxxx
Xxxxxxxx at fax no. 000 000 000 0000.
13.2.2 to the Bank at fax no. 0000 000 0000 or to 0 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxx XX0X 0XX marked for the attention of Xxxxx
Xxxxxxxx with a copy to 00 353 1 805 1092 or to: BT Services Ireland
Limited, 0xx Xxxxx, Xxxxx Xxxxx, Xxxxx Xxxx Xxxxxx, Xxxxx Xxxxx Xxxxxx,
Xxxxxx 0, Xxxxxxx (in each case, marked for the attention of Xx Xxx
X'Xxxxxxx, Loans Administration);
or such other fax number or address or marked for such other attention as the
relevant party may from time to time notify the other for the purpose of this
facility. Any notice or communication hereunder shall be deemed received
when sent (if by fax) or when delivered to the appropriate address or two
days after being posted (if by letter) and shall be effective notwithstanding
any change of fax number or address or that it be returned undelivered
(except that, if received on a non-Business Day or after normal business
hours, it shall be deemed
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received on the next Business Day after such receipt). Any notice or other
communication shall be irrevocable.
13.3 All interest and Commitment Fees shall accrue from day to day and be
calculated on the basis of actual days elapsed and a 365 day year.
13.4 Any amount received or recovered by the Bank (whether under this
letter or otherwise) in respect of any sum expressed to be due to it from the
Borrower under this letter in a currency (the "other currency") other than
that in which the relevant obligation is expressed to be payable, whether as
a result of, or enforcement of, a judgment or order of a court or tribunal of
any jurisdiction, in the dissolution of the Borrower or otherwise, shall only
constitute a discharge of the Borrower to the extent the amount in the
currency in which the relevant obligation is expressed to be payable which
the Bank would be able to purchase in accordance with normal banking
procedures with the amount so received or recovered in the other currency
(after any premium or costs of exchange) on the date of that receipt or
recovery (or, if it would not be practicable to make that purchase on that
date, on the first date on which it is practicable to do so). If that amount
in the other currency is less than the amount in the currency in which the
relevant obligation is expressed to be payable to the Bank, the Borrower
shall indemnify it against any loss sustained by it as a result. In such
event, the Borrower shall also indemnify the Bank against the costs of making
any such purchase. These indemnities constitute a separate and independent
obligation from the other obligations in this letter, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by the Bank and shall continue in full force and effect
despite any judgment, order, claim or proof for a liquidated amount in
respect of any sum due under this letter or any judgment or order. No proof
or evidence of any actual loss may be required other than proof of the actual
amount in the currency in which the relevant obligation is expressed to be
payable purchased by the Bank as mentioned above and the date upon which such
purchase was effected.
13.5 In case any one or more provisions of this letter shall be invalid,
illegal or unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby.
13.6 No failure by the Bank to exercise or delay by the Bank in
exercising any right or remedy under this letter will operate as a waiver
thereof, nor will any single or partial exercise by the Bank of any right or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies provided in
this letter are cumulative and not exclusive of any rights or remedies
provided by law.
13.7 The Bank shall be entitled, but not obliged, without notice to the
Borrower to combine, consolidate or merge all or any of the Borrower's
accounts with any liabilities to the Bank and may set-off or transfer any sum
outstanding to the credit of any of the Borrower's accounts (whether or not
then due) or any credit balances on any other accounts with the Bank to which
the Borrower is beneficially entitled in or towards the satisfaction of any
of its liabilities to the Bank and may do so notwithstanding that the
balances on such accounts and the liabilities may not be expressed in the
same currency and the Bank is hereby authorised go use any such sums or
credit balances to effect any necessary conversions at its own rate of
exchange then prevailing.
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13.8 The letter shall benefit and be binding on the Bank and the
Borrower, their respective successors and any permitted assignee or
transferee of some or all of a party's rights or obligations under this
letter. Any reference in this letter to any party shall be construed
accordingly. The Borrower may not assign or transfer all or part of its
rights or obligations under this letter. The Bank may transfer all or part
of its rights and obligations under this letter to a Qualifying Bank with a
lending office in the UK or change its lending office within the UK for the
purposes of this letter with the prior written consent of the Borrower, such
consent not to be unreasonably withheld or delayed. The transfer shall
become effective when the Borrower has been notified of it by the Bank and
has received from the transferee an undertaking (addressed to it) to be bound
by this letter and to perform the obligations transferred to it.
13.9 The Bank's initial lending office for the purposes of this letter is
set out at the commencement of this letter.
13.10 This letter, and the Borrower's agreement to be bound by it, shall
be governed by and construed in accordance with English law.
Please confirm your agreement to the terms and conditions of this letter
by countersigning and dating the enclosed copy of this letter and returning
it to us at the address set out at the beginning of this letter so as to be
received by us by 18th September, 1997.
Yours faithfully,
Bankers Trust Company.................................................
We agree to the terms and conditions of your letter dated 18th September,
1997 of which the above is a copy.
.................................................
for and on behalf of
Big Flower Limited
..................................................
Name: XXXX X. XXXXXXXX
Title: DIRECTOR
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APPENDIX A
FORM OF NOTICE OF DRAWING REFERRED TO IN CLAUSE 1.2
[Date]
Bankers Trust Company acting through its branch at London
Attention: [ ].
In accordance with Clause 1.2 of the facility letter dated 18th
September, 1997 (the "Facility Letter") from the Bank to the Borrower, the
Borrower gives the Bank notice that the Borrower wishes to make a drawing of
-pound- [ ] under that facility on [ ], 1997 (or if
not a Business Day; the next succeeding day which is a Business Day).
The Borrower elects for the interest period relating to the drawing to be
of [ ] week(s).
The Borrower represents, warrants and confirms that:
(A) the representations and warranties contained in Clause 8 of the
Facility Letter and those in the Share Charge and the Guarantee which are
expressed to be made or repeated on the date of this notice of drawing are
true and correct and will be true and correct immediately after the drawing
is made; and
(B) no Event of Default or Default has occurred and is continuing or is
reasonably likely to result from the drawing.
Capitalised terms used herein shall have the respective meanings provided
to such terms in the Facility Letter.
This notice of drawing shall be governed by English law.
Big Flower Limited
By:
--------------------------
Name:
------------------------
Title:
-----------------------
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XXXXXXXX X
CALCULATION OF THE MLA COST
(a) The MLA Cost for a drawing denominated in Sterling is calculated in
accordance with the following formula:-
BY + L (Y - X ) + S (Y - Z)
-----------------------------
100 - (B + S) % per annum = MLA Cost
where on the day of application of the formula:
B is the percentage of the Bank's eligible liabilities which the Bank of
England requires the Bank to hold on a non-interest bearing deposit
account in accordance with its cash ratio requirements;
Y is the rate at which Sterling deposits are offered by the Bank to
leading banks in the London interbank market at or about 11.00 am on
that day for the relevant Interest Period;
L is the percentage of eligible liabilities which the Bank of England
requires the Bank to maintain as secured money with members of the
London Discount Market Association and/or as secured call money with
certain money brokers and gilt-edged primary market makers;
X is the rate at which secured Sterling deposits in the relevant amount
may be placed by the Bank with members of the London Discount Market
Association and/or as secured call money with certain money brokers
and gilt-edged primary market makers at or about 11.00 am on that day
for the relevant Interest Period;
S is the percentage of the Bank's eligible liabilities which the Bank of
England requires the Bank to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank of England on
special deposits.
(b) For the purposes of this Appendix B "eligible liabilities" and
"special deposits" have the meanings given to them at the time of application
of the formula by the Bank of England.
(c) In the application of the formula, B, Y, L, X, S and Z are included
in the formula as figures and not as percentages, eg. If B = 0.5% and Y =
15%, BY is calculated as 0.5 x 15.
(d) The formula is applied on the first day of the relevant Interest
Period.
(e) If the Bank determines that a change in circumstances has rendered
or will render, the formula inappropriate, the Bank acting reasonably shall
determine and shall notify the Borrower of, the manner in which the MLA Costs
will subsequently be calculated. The manner of calculation so notified by
the Bank shall, in the absence of manifest error, be binding on the Borrower.
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APPENDIX C
Deed of Accession
THIS DEED OF ACCESSION is made on 1997
BETWEEN:
(1) OLWEN DIRECT MAIL LIMITED ("Olwen");
(2) BIG FLOWER LIMITED (the "Existing Borrower"); and
(3) BANKERS TRUST COMPANY (the "Bank").
WHEREAS:
(A) This Deed is entered into in connection with a facility letter dated 18th
September 1997 (the "Facility Letter") from the Bank to the Existing Borrower.
(B) The Existing Borrower wishes that Olwen shall become an Acceding Borrower
as contemplated by Clause 12 of the Facility Letter and the Bank consents
thereto.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions
Terms defined in the Facility Letter shall have the same meaning when
used in this Deed.
2. Admission of Acceding Borrower
2.1 Each of the parties to this Deed agrees that Olwen should accede to
the Facility Letter in accordance with Clause 12 therein.
3. Law
This Deed of Accession shall be governed by and construed in all respects
in accordance with English law.
IN WITNESS whereof the parties have caused this Deed to be duly executed on
the date first written above.
Signed as a Deed by )
Olwen Direct Mail Limited )
acting by [ ], a )
Director, and [ ] [a )
Director/the Company Secretary] )
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Signed as a Deed by )
Big Flower Limited )
acting by [ ] a )
Director and [ ] [a )
Director/Company Secretary] )
Signed as a Deed by )
[ ] )
for and on behalf of )
Bankers Trust Company )
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