EXHIBIT 10.35
CONFORMED COPY
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DATE: 21ST MAY, 1997
CASTLE TRANSMISSION INTERNATIONAL LTD
AS BORROWER
CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD
AS GUARANTOR
THE LENDERS LISTED IN SCHEDULE 1
CREDIT SUISSE FIRST BOSTON
AS ARRANGER
X.X. XXXXXX SECURITIES LTD.
AS CO-ARRANGER
CREDIT SUISSE FIRST BOSTON
AS AGENT
_________________________________________________________
LOAN AMENDMENT AGREEMENT
(Pounds)162,500,000 TERM AND REVOLVING LOAN FACILITIES
BEING AMENDED TO A (Pounds)64,000,000 REVOLVING LOAN FACILITY
_________________________________________________________
XXXXXXXXX AND MAY
00 XXXXXXXXXX XXXXXX
XXXXXX
XX0X 0XX
LOAN AMENDMENT AGREEMENT
(Pounds)162,500,000 TERM AND REVOLVING LOAN FACILITIES
BEING AMENDED TO A (Pounds)64,000,000 REVOLVING LOAN FACILITY
DATE: 21st May 1997
PARTIES
1. CASTLE TRANSMISSION INTERNATIONAL LTD (formerly known as Castle
Transmission Services Limited), a company incorporated in England (number
3196207), of Warwick Technology Park, Gallows Hill, Xxxxxxxxx Xxxx, Xxxxxxx
XX00 0XX, as borrower
2. CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD, a company incorporated in
England (number 3242381), of Warwick Technology Park, Gallows Hill,
Xxxxxxxxx Xxxx, Xxxxxxx XX00 0XX, as guarantor
3. THE LENDERS listed in Schedule 1, as lenders
4. CREDIT SUISSE FIRST BOSTON, as agent
5. CREDIT SUISSE FIRST BOSTON, as arranger
6. X.X. XXXXXX SECURITIES LTD., as co-arranger
BACKGROUND
(A) On 28 February 1997 the Loan Agreement was entered into between the parties
to this Agreement. Under the Loan Agreement the Lenders agreed to provide
term and revolving loan facilities of (Pounds)162,500,000 to the Borrower.
These loan facilities are guaranteed by the Guarantor and secured by
charges granted by the Borrower and the Guarantor.
(B) At the request of the Borrower the parties have agreed to amend the terms
of the Loan Agreement and the Charges on the terms of this Agreement.
The parties agree as follows:
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1. INTERPRETATION
1.1 LOAN AGREEMENT
The interpretation provisions contained in Part I of the Loan Agreement are
deemed to be incorporated expressly in this Agreement, and apply to this
Agreement accordingly.
1.2 DEFINITIONS
In this Agreement:
"BONDS" means the (Pounds)125,000,000 Guaranteed Bonds due 2007 issued on
or after the date of this Agreement by Castle Transmission (Finance) plc (a
company incorporated in England and Wales with registered number 3347387).
"CLOSING" means the time of closing of the Bonds.
"DEPOSIT CHARGE AMENDMENT AGREEMENT" means the deposit charge amendment
agreement dated the date of Closing, made between the Borrower and Credit
Suisse First Boston as trustee for the Lenders.
"INTER-COMPANY LOAN AGREEMENT" means the inter-company loan agreement dated
the date of Closing, made in the agreed form between Castle Transmission
(Finance) plc and the Borrower.
"LOAN AGREEMENT" means the loan agreement relating to (Pounds)162,500,000
term and revolving loan facilities dated 28 February 1997, made between the
parties to this Agreement.
"TERM LOAN" has the meaning described in the Loan Agreement as read and
construed prior to its amendment by this Agreement.
"UPDATED BUSINESS PLAN AND FINANCIAL MODEL" means:
(A) the business plan prepared on behalf of the Borrower after the date of
this Agreement in the agreed form; and
(B) the financial model (or models) prepared on behalf of the Borrower
after the date of this Agreement in the agreed form.
1.3 SCOPE
This Agreement is supplemental to and amends the Loan Agreement.
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2. CONDITIONS PRECEDENT
2.1 CONDITIONS PRECEDENT
The Borrower agrees to deliver the following items to the Agent at or
before Closing, in a form satisfactory to the Agent:
(A) A copy of the Memorandum and Articles of Association of the Borrower
in the agreed form. This copy must be certified by a director or the
secretary of the Borrower to be complete, up-to-date and in full force
and effect.
(B) A copy of a resolution of the board of directors of the Borrower in
the agreed form, approving and authorising the signature and delivery
of this Agreement and the Deposit Charge Amendment Agreement. The
copy must be certified by a director or the secretary of the Borrower
to be a true copy of duly passed resolutions each of which is in full
force and effect.
(C) A copy of the Memorandum and Articles of Association of the Guarantor
in the agreed form. The copy must be certified by a director or the
secretary of the Guarantor to be complete, up-to-date and in full
force and effect.
(D) A copy of a resolution of the board of directors of the Guarantor in
the agreed form, approving and authorising the signature and delivery
of this Agreement. The copy must be certified by a director or the
secretary of the Guarantor to be a true copy of a duly passed
resolution which is in full force and effect.
(E) Evidence that the following documents have been signed in the agreed
form:
(i) the subscription agreement relating to the Bonds dated 14 May
1997 made between Castle Transmission (Finance) plc, the
Borrower, the Guarantor, Credit Suisse First Boston (Europe)
Limited and X.X. Xxxxxx Securities Ltd.;
(ii) the trust deed relating to the Bonds dated the date of Closing
Closing made between Castle Transmission (Finance) plc, the
Borrower, the Guarantor and The Law Debenture Trust Corporation
p.l.c.;
(iii) the Deposit Charge Amendment Agreement;
(iv) the Inter-Company Loan Agreement; and
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(v) the undertaking from TeleDiffusion de France International S.A.
described in paragraph 15 of Schedule 3 of the Loan Agreement,
duly signed on behalf of TeleDiffusion de France International
S.A.
(F) A legal opinion from Xxxxxxxxx and May, English legal advisers to the
Agent.
2.2 OPTIONAL PREPAYMENT
Provided that Closing occurs, the Borrower agrees to prepay the Term Loan
by making the following payments to the Agent:
(A) (Pounds)121,076,250, being the net proceeds of the issue of the Bonds.
(B) (Pounds)36,423,750, being all or part of the proceeds of the borrowing
referred to in Clause 2.3.
(C) Any amounts arising under Clause 10.7 of the Loan Agreement. For this
purpose the prepayments described in this sub-clause will be treated
as being optional prepayments under Clause 9.1 of the Loan Agreement.
However, for these purposes the Borrower is not obliged to deliver the
notice described in Clause 9.1 of the Loan Agreement. The Lenders
confirm that no amounts will arise under Clause 10.7 of the Loan
Agreement if Closing occurs before 12.30 p.m. on 21st May, 1997.
These payments will be made at Closing in accordance with the provisions of
Clause 11 of the Loan Agreement. Clause 3.3 also applies to these payments.
2.3 NOTICE OF BORROWING
The Borrower agrees to deliver to the Agent at or before Closing a notice
or notices of borrowing in accordance with the provisions of Clause 6 of
the Loan Agreement (other than Clause 6.1(C) which will not apply). The
notice or notices will request a borrowing of an aggregate amount not less
than the amount described in Clause 2.2(B) to be made as an Advance or
Advances on the day of Closing.
3. AMENDMENT OF THE LOAN AGREEMENT
3.1 NOTICE TO THE LENDERS
This Clause applies if:
(A) Closing occurs;
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(B) the Agent receives the items described in Clause 2.1 at or before
Closing;
(C) the Agent receives the amounts referred to in Clause 2.2(A) and (if
applicable) Clause 2.2(C) at Closing;
(D) the Agent receives the notice or notices of borrowing described in
Clause 2.3 at or before Closing; and
(E) the requirements of Clause 6.4 of the Loan Agreement are satisfied at
Closing. For these purposes Clause 6.4 of the Loan Agreement will be
deemed to have been amended so that it will be read and construed as
set out in Schedule 1 to this Agreement as if those amendments were
already effective.
In this event the Agent will notify the Lenders in writing at Closing.
3.2 EFFECT OF NOTICE
With effect from the Agent giving (or being obliged to give) the notice
described in Clause 3.1, each of the following will occur:
(A) The Loan Agreement will be amended so that it will be read and
construed as is set out in Schedule 1. The Loan Agreement as amended
will remain in full force and effect. References to the Loan
Agreement, however expressed, will be read and construed as references
to both the Loan Agreement as amended by this Agreement and to this
Agreement.
(B) Each Lender will advance its participation in the Advance or Advances
requested in the notice or notices of borrowing described in Clause
2.3 at Closing. These advances will be made in accordance with the
provisions of Clause 11 of the Loan Agreement. Clause 3.3 also
applies to these advances.
(C) The Deposit Charge Amendment Agreement will take effect in accordance
with its terms.
3.3 NETTING OF PAYMENTS
The Borrower has, subject to the terms of this Agreement and the Loan
Agreement, agreed to prepay the amount described in Clause 2.2(B). This
prepayment is to be made using all or part of the proceeds of the borrowing
referred to in Clause 3.2(B). The parties agree that the Borrower's
obligation to prepay the amount described in Clause 2.2(B), and the
Lenders' obligations to advance an equivalent amount under Clause 3.2(B),
will each be deemed to
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be satisfied by the Borrower satisfying its obligations under Clause 2
(other than under Clause 2.2(B)).
4. MISCELLANEOUS
4.1 UNDERTAKING AND REPRESENTATION
(A) The Borrower will procure the preparation of the Updated Business Plan
and Financial Model as soon as reasonably practicable following
Closing, and in any event within 30 days of Closing.
(B) The Updated Business Plan and Financial Model have been prepared on a
reasonable basis using reasonable assumptions and the Borrower does
not have any reason to believe that they contain a misstatement
material in the context of this Agreement. This representation is
given as at the date of the Updated Business Plan and Financial Model
or, if not dated, as at the date they are signed as being in the
agreed form. It is not given as at the date of this Agreement.
4.2 EXPIRY
The obligations and rights constituted by this Agreement will be
extinguished on the date one month after the date of this Agreement if
Closing has not occurred on or prior to that date.
4.3 WAIVER
The Lenders waive any breach of the Loan Agreement which arises as a result
of the agreement by Castle Transmission (Finance) plc, the Borrower and the
Parent to issue and, as the case may be, guarantee the Bonds, and as a
result of the acquisition of Castle Transmission (Finance) plc by the
Borrower.
4.4 LAW
This Agreement is to be governed by and construed in accordance with
English law.
4.5 COUNTERPARTS
There may be several signed copies of this Agreement. There is intended to
be a single Agreement and each signed copy is a counterpart of that
Agreement.
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SIGNATURES
BORROWER
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CASTLE TRANSMISSION INTERNATIONAL LTD
Address: Warwick Technology Park,
Gallows Hill,
Xxxxxxxxx Xxxx,
Xxxxxxx XX00 0XX.
Fax Number: 00000 000000
Attention: Company Secretary
By: XXX XXXXXX
PARENT
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CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD
Address: Warwick Technology Park,
Gallows Hill,
Xxxxxxxxx Xxxx,
Xxxxxxx XX00 0XX.
Fax Number: 00000 000 000
Attention: Company Secretary
By: XXX XXXXXX
ARRANGER
--------
CREDIT SUISSE FIRST BOSTON
By: XXXXX XXXXX XXXXXX XXXXX
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CO-ARRANGER
-----------
X.X. XXXXXX SECURITIES LTD.
By: XXXXX XXXXXXX
LENDERS
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CREDIT SUISSE FIRST BOSTON
Address: Five Xxxxx Xxxxxx, Xxxxxx, X00 0XX
Fax Number: 0000 000 0000
Telex Number: 887 322
Attention: Client Services Unit
By: XXXXX XXXXX XXXXXX XXXXX
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
Address: 00 Xxxxxxxx Xxxxxxxxxx,
Xxxxxx XX0X OJP
Fax Number: 0000 000 0000
Telex Number: 896631 MGT
Attention: Credit Operations
By: XXXXX XXXXXXX
AGENT
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CREDIT SUISSE FIRST BOSTON
Address: Five Xxxxx Xxxxxx,
Xxxxxx X00 0XX
Fax Number: 0000 000 0000
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Attention: Agency Services Unit
By: XXXXX XXXXX XXXXXX XXXXX
SCHEDULE 1: AMENDED LOAN AGREEMENT
----------------------------------
DATE: 28 FEBRUARY, 1997
CASTLE TRANSMISSION INTERNATIONAL LTD
AS BORROWER
CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD
AS GUARANTOR
THE LENDERS LISTED IN SCHEDULE 1
CREDIT SUISSE FIRST BOSTON
AS ARRANGER
X.X. XXXXXX SECURITIES LTD.
AS CO-ARRANGER
CREDIT SUISSE FIRST BOSTON
AS AGENT
__________________________________
(Pounds)64,000,000 REVOLVING LOAN FACILITY
__________________________________
XXXXXXXXX AND MAY
00 XXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
CONTENTS
CLAUSE PAGE
PART I : INTERPRETATION 2
1. INTERPRETATION AND CALCULATIONS 2
PART II : THE REVOLVING FACILITY 10
2. THE REVOLVING FACILITY 10
3. THE LENDERS AND THE BORROWER 10
4. FEES AND EXPENSES 11
5. CANCELLATION 12
PART III : THE LOAN 16
6. ADVANCE OF FUNDS 16
7. INTEREST 17
8. REPAYMENT 19
9. PREPAYMENT 19
PART IV: CHANGES OF CIRCUMSTANCES AND PAYMENTS 22
10. CHANGES OF CIRCUMSTANCES 22
11. PAYMENTS 27
12. LATE PAYMENT 29
13. SHARING AMONG LENDERS 29
PART V : GUARANTEE AND INDEMNITY 31
14. GUARANTEE 31
15. GUARANTOR'S INDEMNITY 33
PART VI : REPRESENTATIONS, COVENANTS AND TERMINATION EVENTS 34
16. REPRESENTATIONS 34
17. INFORMATION COVENANTS 38
18. FINANCIAL COVENANTS 42
19. GENERAL COVENANTS 48
20. TERMINATION EVENTS 55
PART VII : MISCELLANEOUS 59
21. THE AGENT AND THE XX-XXXXXXXXX 00
00. EVIDENCE AND CERTIFICATES 63
23. NOTICES 64
24. ASSIGNMENT AND NOVATION 64
25. WAIVERS, AMENDMENTS AND RELEASES OF SECURITY 67
26. MISCELLANEOUS 68
27. LAW 69
SCHEDULE 1: LENDERS AND COMMITMENTS 70
SCHEDULE 2: COSTS RATE 71
SCHEDULE 3: CONDITIONS PRECEDENT 73
SCHEDULE 4: FORM OF SUBSTITUTION CERTIFICATE 75
SCHEDULE 5: FORM OF NOTICE FOR ADVANCES 77
SCHEDULE 6: FORM OF ADDITIONAL GUARANTOR AGREEMENT 78
SCHEDULE 7: FORM OF CONFIDENTIALITY UNDERTAKING 80
SCHEDULE 8: [deleted] 82
SCHEDULE 9: [deleted] 83
SCHEDULE 10:[deleted] 84
SCHEDULE 11: FORM OF OPINION OF XXXXXXXXX AND MAY 85
SCHEDULE 12: FORM OF OVERDRAFT BANK AGREEMENT 92
AMENDED LOAN AGREEMENT
DATE: 28 February, 1997
PARTIES
1. CASTLE TRANSMISSION INTERNATIONAL LTD (formerly known as CASTLE
TRANSMISSION SERVICES LTD), a company incorporated in England (number
3196207), of Warwick Technology Park, Gallows Hill, Xxxxxxxxx Xxxx, Xxxxxxx
XX00 0XX, as borrower
2. CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD, a company incorporated in
England (number 3242381), of Warwick Technology Park, Gallows Hill,
Xxxxxxxxx Xxxx, Xxxxxxx XX00 0XX, as guarantor
3. THE LENDERS listed in Schedule 1, as lenders
4. CREDIT SUISSE FIRST BOSTON, as agent
5. CREDIT SUISSE FIRST BOSTON, as arranger
6. X.X. XXXXXX SECURITIES LTD. as co-arranger
BACKGROUND
At the request of the Borrower the Lenders are willing to provide a
(Pounds)64,000,000 revolving loan facility to the Borrower on the terms of this
Agreement. The loan facility is to be guaranteed by the Guarantors and secured
by the Charges granted by the Borrower and the Guarantors.
The parties agree as follows:
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PART I : INTERPRETATION
1. INTERPRETATION AND CALCULATIONS
1.1 DEFINITIONS
In this Agreement:
"ADVANCE" means an advance made, or to be made, under Clause 6.
"ADVANCE DATE" means the date, or proposed date, of an Advance.
"AGENT" means Credit Suisse First Boston, in its capacity as agent for the
Lenders, acting through its office at Five Xxxxx Xxxxxx, Xxxxxx X00 0XX or
any other office in England which it may notify to the Borrower and the
Lenders. If there is a change of Agent in accordance with Clause 21.12,
"AGENT" will instead mean the new Agent appointed under that Clause.
"AMORTISATION DATE" has the meaning described in Clause 56.
"APPLICABLE MARGIN" means 0.85%.
"AUTHORISED PERSON" means a person authorised to sign documents on behalf
of a Company under this Agreement by virtue of a resolution of the
directors of that Company a certified copy of which has been delivered to
the Agent. A person will cease to be an "AUTHORISED PERSON" upon notice by
the appointing Company to the Agent.
"AVAILABLE REVOLVING FACILITY COMMITMENT" means the amount of a Lender's
Revolving Facility Commitment which is available to the Borrower. On any
day it is that Lender's Revolving Facility Commitment on that day less that
Lender's aggregate participation in all outstanding Advances.
"BBC" means The British Broadcasting Corporation.
"BONDS" means the (Pounds)125,000,000 Guaranteed Bonds due 2007 expected to
be issued on the First Amendment Date by CT Finance.
"BORROWER" means Castle Transmission International Ltd, the first party to
this Agreement.
"BORROWER'S GROUP" has the meaning described in Clause 18.1.
"BUSINESS DAY" means a day on which banks are open for inter-bank payments
in London.
"BUSINESS PLAN AND FINANCIAL MODEL" means:
(A) the business plan prepared on behalf of the Parent dated 26 November,
1996 in the agreed form; and
(B) the Project Windsor Equity Base Case Model (with revisions) dated 20
January, 1997 and the Senior Bank Debt Base Case Model dated 20
January, 1997 in the agreed form.
"CHARGED ACCOUNT" means the account of the Borrower with the Agent which is
the subject of the deposit agreement and charge on cash deposits dated the
same date as this Agreement and amended with effect from the First
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Amendment Date and made between the Borrower as depositor and Credit Suisse
First Boston as agent and trustee for the Lenders.
"CHARGES" means:
(A) the debenture creating fixed and floating charges dated the same date
as this Agreement and made between the Parent, the Borrower and Credit
Suisse First Boston as trustee for the Lenders;
(B) the deposit agreement and charge on cash deposits dated the same date
as this Agreement and amended with effect from the First Amendment
Date and made between the Borrower as depositor and Credit Suisse
First Boston as trustee for the Lenders;
(C) each deed of accession executed and delivered pursuant to Clause 28.2
of the debenture mentioned in paragraph (A);
(D) any other document creating in any foreign jurisdiction a form of
security similar to that created under the document described in
paragraph (A) above in a form satisfactory to the Agent but which
shall not contain terms materially more onerous than the document
described in paragraph (A) above; and
(E) any other document executed in accordance with the terms of a "CHARGE"
or this Agreement and expressed to be, or to be supplemental to, a
Charge.
"CO-ARRANGER" means each of Credit Suisse First Boston and X.X. Xxxxxx
Securities Ltd, in its capacity as arranger or co-arranger of the
Facilities.
"COMPANY" means any of the Borrower and each Guarantor.
"COMPLETION DATE" means the same date as this Agreement, being the date on
which the Parent acquired the issued share capital of the Borrower under
the Share Sale Agreement.
"CONTRACTS OF SERVICES" means the contracts of services dated the same date
as this Agreement between the Borrower and each of Castle Tower Corporation
and TeleDiffusion de France International S.A..
"COSTS RATE" means a rate per annum determined by the Agent and notified to
the Borrower. This rate will be applied to an outstanding amount for a
particular period. It will be calculated in accordance with Schedule 2.
"CT FINANCE" means Castle Transmission (Finance) plc (a company
incorporated in England and Wales with registered number 3347387).
"DEBT COVERAGE" has the meaning described in Clause 18.1.
"DISTRIBUTION" means any dividend or other distribution (as defined in
section 263(2) of the Companies Xxx 0000, but ignoring section 263(2)(b))
or any loan to shareholders.
"EBITDA" has the meaning described in Clause 18.1.
"EQUITY CONSORTIUM" means Castle Tower Holding Corporation, TeleDiffusion
de France International S.A., Berkshire Partners LLC and Candover
Investments plc.
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"EXCEPTIONAL ITEMS" has the meaning described in Clause 18.1.
"EXCESS CASH FLOW" has the meaning described in Clause 18.1.
"EXTRAORDINARY ITEMS" has the meaning described in Clause 18.1.
"FACILITY TERMINATION DATE" means 31 May 2002 or, if earlier, the date the
Revolving Facility is cancelled in full in accordance with the terms of
this Agreement.
"FINANCIAL INDEBTEDNESS" has the meaning described in Clause 18.1.
"FINANCING DOCUMENT" means each of this Agreement and each Charge.
"FIRST AMENDMENT DATE" has the meaning described in Clause 1.2.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, at any time, accounting
principles generally accepted and adopted in England at such time.
"GROUP" means the Parent and its Subsidiaries.
"GUARANTEE" means the guarantee of amounts due under this Agreement
contained in Clause 14.
"GUARANTOR" means the Parent and each company which has become an
additional guarantor in accordance with Clause 19.1(W).
"HOLDING COMPANY" has the meaning described in section 736 of the Companies
Xxx 0000.
"INDEBTEDNESS FOR BORROWED MONEY" of any person means:
(A) all obligations of that person for borrowed money,
(B) any indebtedness under any acceptance credit opened on behalf of that
person,
(C) the face amount of any bills of exchange (issued for the purposes of
raising finance) for which that person is liable,
(D) all obligations of that person under any bond, debenture, note or
similar instrument (but excluding any of the same which are issued in
connection with the performance of obligations under contracts which
are not payment obligations),
(E) all obligations of that person in respect of any interest rate or
currency swap or forward currency sale or purchase or other form of
interest or currency hedging transaction (including without limit
caps, collars and floors),
(F) all payment obligations of that person under any finance lease,
(G) all liabilities of that person (actual or contingent) under any
guarantee, bond, security, indemnity or other agreement in respect of
any Indebtedness for Borrowed Money of any other person, and
(H) any other liability (actual or contingent) undertaken by that person
for the purpose of raising finance.
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"INFORMATION MEMORANDUM" means the information memorandum prepared to
assist in syndication of the Revolving Facility.
"INTER-COMPANY LOAN AGREEMENT" means the inter-company loan agreement dated
the First Amendment Date, between CT Finance and the Borrower.
"INSTRUCTING GROUP" means Lenders whose Revolving Facility Commitments
exceed 66.6% in aggregate of the total. If, however, an Advance has been
made "INSTRUCTING GROUP" means Lenders whose participations in the Loan
exceed 66.6% in aggregate.
"INTEREST" has the meaning described in Clause 18.1.
"INTEREST PERIOD" means each period described in Clause 7.1.
"LENDER" means a lender listed in Schedule 1 acting through the office
appearing under its name on the signature pages or any other office in the
United Kingdom which it may notify to the Agent. A lender which acquires
an interest in the Revolving Facility by way of assignment or novation will
become a "LENDER" and will act through its office notified to the Agent.
The expression also includes a successor in title to a Lender. A Lender
will cease to be a "LENDER" if it assigns or novates its entire interest in
the Revolving Facility.
"LENDER GROUP COMPANY" means a Lender or any Holding Company of a Lender.
"LIBOR" means a rate per annum determined by the Agent and notified to the
Borrower. This rate will be applied to an outstanding amount for a
particular period. It will be determined as follows:
(A) "LIBOR" will be the offered rate which appears on the Screen for
deposits in the currency of that amount for that period. This rate
will be determined at or about 11.00 a.m. on the first day of the
period.
(B) If no rate appears on the Screen for the necessary currency and
period, "LIBOR" will be based on the rate at which deposits of that
amount and currency are offered to the Reference Banks for that period
by leading banks in the London inter-bank market. Each Reference Bank
will notify the Agent of this rate when requested by the Agent. This
rate will be determined at or about 11.00 a.m. on the first day of the
period. The Agent will calculate the arithmetic mean of these rates
rounded upwards to five decimal places. This will be "LIBOR" for the
period. If fewer than two Reference Banks provide the Agent with
notifications for a particular period, this method of determining
"LIBOR" will not be used for that period and Clause 10.3 applies.
"LOAN" means the aggregate principal amount borrowed and not repaid under
the Revolving Facility.
"MATERIAL CONTRACT" means the Transmission Agreement, the NTL Site Sharing
Agreement, the Share Sale Agreement and any other contract generating 5% or
more of the Borrower's gross revenues (measured annually).
"NET CASH INTEREST" has the meaning described in Clause 18.1.
"NET DISPOSAL PROCEEDS" means, in respect of a disposal, the gross proceeds
of that disposal minus:
(A) reasonable costs of the disposal;
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(B) liabilities (including, without limitation, liabilities to the BBC)
which are required to be discharged as a result of the disposal (other
than liabilities incurred in contemplation of it);
(C) provisions which the directors reasonably determine need to be made
for taxes arising as a result of the disposal; and
(D) where the asset which is the subject of the disposal is being
replaced, the cost of the replacement asset to the extent that it is
acquired for cash within the period 6 months before or after the
disposal.
If the "NET DISPOSAL PROCEEDS" would be a negative number it will be taken
to be zero. Where a disposal is made for non-cash consideration, the gross
proceeds of that disposal will be calculated as the market value of the
assets disposed of, as certified to the Agent by the Borrower and, if the
Agent requests, the Borrower's auditors.
"NTL SITE SHARING AGREEMENT" means the deed dated 10 September, 1991
between National Transcommunications Limited and the BBC relating to site
sharing.
"OVERDRAFT BANK" means any Lender or any affiliate of any Lender which from
time to time provides Overdraft Facilities.
"OVERDRAFT BANK AGREEMENT" means an agreement substantially in the form of
Schedule 12.
"OVERDRAFT FACILITIES" means any overdraft facilities (which may be in
sterling or other currencies) provided to the Borrower by Overdraft Banks
which have signed Overdraft Bank Agreements.
"PARENT" means Castle Transmission Services (Holdings) Ltd, the second
party to this Agreement.
"POTENTIAL TERMINATION EVENT" means an event or state of affairs which is
mentioned in Clause 20.1 but which has not become a Termination Event
because a period has not elapsed or a notice has not been given.
"QUARTER" means a financial quarter of the Borrower's financial year.
"REFERENCE BANKS" means, initially, the principal London offices of Credit
Suisse First Boston, Xxxxxx Guaranty Trust Company of New York and another
Lender selected by the Co-arrangers following consultation with the
Borrower. The Agent, following consultation with the Borrower and the
Lenders, may replace a "REFERENCE BANK" with another Lender or an affiliate
of a Lender. This replacement will take effect when notice is delivered to
the Borrower and the Lenders.
"REVOLVING FACILITY" means the revolving loan facility described in Clause
2.1.
"REVOLVING FACILITY COMMITMENT" means the amount which a Lender has
committed to the Revolving Facility. Each Lender's initial "REVOLVING
FACILITY COMMITMENT" is the amount set out next to its name in Schedule 1.
This may be reduced or revised in accordance with this Agreement. In
addition the amount of a Lender's "REVOLVING FACILITY COMMITMENT" may be
adjusted by assignments and assumptions in accordance with Clause 24.2 and
novations in accordance with Clause 24.3.
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"SCREEN" means the Telerate Page 3750. The Agent may nominate an
alternative source of screen rates if this page is replaced by others which
display the rates for inter-bank deposits offered by leading banks in
London.
"SECURITY" means security of any type created or existing over any asset.
"SECURITY" will also include retention of title arrangements, rights to
retain possession and any arrangement providing a creditor with a prior
right to an asset, or its proceeds of sale, over other creditors in a
liquidation.
"SHARE SALE AGREEMENT" means the Share Sale Agreement dated 23 January,
1997 and made between the BBC and the Parent concerning the acquisition by
the Parent of the Borrower. It also includes any disclosure letters.
"SHAREHOLDERS AGREEMENT" means the Shareholders' Agreement dated 23
January, 1997 and made between Berkshire Fund IV Investment Corp.,
Berkshire Investors LLC, Berkshire Partners LLC, Candover Investments PLC,
Candover (Trustees) Limited, Candover Partners Limited (as general partner
of four partnerships), Castle Tower Holding Corporation, TeleDiffusion de
France International S.A. and the Parent.
"SUBORDINATED LOAN AGREEMENT" means the agreement dated the same date as
this Agreement between the Borrower, the Parent and the Agent relating to
the provision of subordinated loans by the Parent to the Borrower.
"SUBSIDIARY" has the meaning described in section 736 of the Companies Xxx
0000.
"SUBSTITUTION CERTIFICATE" means a document substantially in the form set
out in Schedule 4.
"TANGIBLE NET WORTH" has the meaning described in Clause 18.1.
"TERMINATION EVENT" has the meaning described in Clause 20.1.
"TOTAL INTEREST PAYABLE" has the meaning described in Clause 18.1.
"TOTAL REVOLVING FACILITY COMMITMENTS" means the aggregate of the Revolving
Facility Commitments of all the Lenders.
"TRANSACTION DOCUMENTS" means each Financing Document, each Hedging
Contract, the Share Sale Agreement, the Transmission Agreement, the NTL
Site Sharing Agreement, the Transfer Scheme and the Subordinated Loan
Agreement.
"TRANSFER SCHEME" means the transfer scheme dated 24 February, 1997 and
made by the BBC in favour of, among others, the Borrower for the transfer
of property, rights and liabilities relating to the BBC's transmission
business.
"TRANSMISSION AGREEMENT" means the agreement between the Borrower and the
BBC dated 27 February, 1997 relating to the transmission by the Borrower of
television and radio programmes produced by the BBC.
"TRANSMISSION BUSINESS" means the business previously carried on by the BBC
and assumed by the Borrower under the Transfer Scheme, being the provision
(whether by analogue or by digital means) of broadcasting, transmission and
signal distribution services for radio and television.
"(Pounds)162,500,000 TERM AND REVOLVING LOAN FACILITIES AGREEMENT" means
the (Pounds)162,500,000 term and revolving loan facilities agreement dated
28 February,
8
1997 made between the parties to this Agreement, as read and construed
prior to its amendment.
1.2 INTERPRETATION OF CERTAIN REFERENCES
Unless a contrary intention is indicated:
(A) References to Clauses and Schedules are to Clauses of, and the
Schedules to, this Agreement. References to paragraphs are to
paragraphs in the same sub-clause. References to sub-paragraphs are
to sub-paragraphs in the same paragraph.
(B) References to other documents include those documents as they may be
amended in the future.
(C) References to times are to London time.
(D) References to assets are to present and future assets and include
revenues.
(E) References to "(Pounds)", to "POUNDS" and to "STERLING" are to UK
pounds sterling.
(F) References to fees or expenses include any value added tax on those
fees or expenses.
(G) References to statutes and statutory instruments are to those statutes
and statutory instruments as amended and in force from time to time.
(H) References to any document in "AGREED FORM" are to that document in
the form agreed between the parties, as evidenced by the form of that
document being initialled for the purpose of identification by Xxxxxx
Xxxx and Xxxxxxxxx and May.
(I) References to a "FINANCIAL YEAR" of the Borrower are references to a
year starting on l January and ending on 31 December. This applies
even where the Borrower's statutory accounting reference date is a
date other than 31 December.
(J) References to:
(i) the "SAME DATE AS THIS AGREEMENT", and similar expressions, are
references to 28 February 1997.
(ii) the "FIRST AMENDMENT DATE" are references to the date on which
the first amendment to this Agreement becomes effective, which is
expected to be 21 May 1997.
1.3 HEADINGS
All headings and titles are inserted for convenience only. They are to be
ignored in the interpretation of this Agreement.
9
1.4 CALCULATIONS
Interest and commitment fee will be calculated using the following formula:
I = D x R x A
---
Y
where:
I = interest or commitment fee accrued
D = number of days in the period for which the interest or commitment
fee is to be calculated, including the first day but excluding
the last day
R = the rate of interest or commitment fee, expressed as a fraction
A = the amount on which interest or commitment fee is being
calculated
Y = 365.
Interest and commitment fee will be treated as accruing uniformly over each
period on a daily basis.
In some cases "R" or "A" may change during a period for which interest and
commitment fee is to be calculated. In this case the interest and
commitment fee will be calculated for successive periods and then
aggregated These successive periods will be the periods during which "R"
and "A" were constant.
1.5 REIMBURSEMENTS
If a party wishes to claim reimbursement of any amount to which it is
entitled it will deliver a demand to the reimbursing party. This will set
out the losses, expenses or other amounts to be reimbursed. The reimbursing
party agrees to pay those amounts to the party entitled to them no later
than two Business Days after the delivery of the demand to the reimbursing
party. Where there is an outstanding Termination Event, payment will be due
instead on delivery of this demand.
10
PART II : THE REVOLVING FACILITY
2. THE REVOLVING FACILITY
2.1 AMOUNT AND NATURE
The Revolving Facility is a (Pounds)64,000,000 revolving loan facility
maturing in May 2002 under which Advances will (subject to the terms and
conditions of this Agreement) be made by the Lenders to the Borrower.
2.2 PURPOSE
(A) The Borrower agrees to use the proceeds of the first Advance made on
the First Amendment Date to repay amounts borrowed by the Borrower
under the (Pounds)162,500,000 Term and Revolving Loan Facilities
Agreement. The amount of this Advance will be (Pounds)36,423,750.
Clause 6.2(B) will not apply to this Advance.
(B) The Borrower agrees to use the proceeds of all other Advances for any
of the following purposes:
(i) To finance its working capital requirements and for its general
corporate purposes, in an amount not exceeding (Pounds)46,500,000
at any one time outstanding.
(ii) To finance capital expenditure in respect of digital terrestrial
television (or to repay any outstanding Advance previously drawn
under this sub-paragraph on the last day of the Interest Period
applicable to that Advance) (but without prejudice to sub-
paragraph (i) above).
2.3 EXPIRY OF AVAILABILITY
The Borrower may not borrow under the Revolving Facility after the date
falling one month before the Facility Termination Date.
2.4 SECURITY
All amounts owing under this Agreement will be secured by the Charges.
3. THE LENDERS AND THE BORROWER
3.1 RIGHTS AND OBLIGATIONS
The rights and obligations of each Lender under the Financing Documents are
separate and independent from the rights and obligations of each other
Lender. A Lender may take proceedings against the Borrower or a Guarantor
on its own without joining any other Lender to those proceedings.
11
3.2 FAILURE TO PERFORM
If a Lender fails to perform its obligations the Borrower and the
Guarantors will have rights solely against that Lender. The obligations of
the Borrower and the Guarantors to the Agent, the Co-arrangers and the
other Lenders will not be affected by this failure.
3.3 PARTICIPATIONS
The participation of a Lender in an Advance will be calculated using the
following formula:
P = C x A
-
F
where:
P = the participation of that Lender in the Advance
C = the Available Revolving Facility Commitment of that Lender
on the Advance Date for that Advance
F = the aggregate Available Revolving Facility Commitments of
all the Lenders on that Advance Date
A = the amount of the Advance.
4. FEES AND EXPENSES
4.1 MANAGEMENT FEE
The Borrower agrees to pay a management fee to the Co-arrangers. The amount
of this fee, the timing of payment and the payees are described in a letter
from the Co-arrangers to the Borrower dated the same date as this
Agreement. This fee may be shared amongst the Lenders in accordance with
the agreement between the Co-arrangers and each Lender (but that agreement
shall be of no concern to the Borrower, who shall obtain a good discharge
by making payment in accordance with the above-mentioned letter).
4.2 AGENCY FEE
The Borrower agrees to pay an agency fee to the Agent. The amount of this
fee and the timing of payment are described in a letter from the Agent to
the Borrower dated the same date as this Agreement.
4.3 COMMITMENT FEE
A commitment fee will accrue on the Available Revolving Facility Commitment
of each Lender. This fee will accrue from the date of the commitment letter
signed by the Parent and the Co-arrangers relating to this Agreement until
the date falling one month before the Facility Termination Date.
The rate of the fee will be as follows:
(A) from but excluding the date of the commitment letter signed by the
Parent and the Co-arrangers relating to this Agreement up to and
including the First Amendment Date, 0.50% per annum; and
12
(B) from but excluding the First Amendment Date up to and including the
date falling one month before the Facility Termination Date, 0.425%
per annum.
The Borrower agrees to pay the fee to each Lender in arrear at three-
monthly intervals and on the Facility Termination Date.
4.4 REIMBURSEMENT OF INITIAL EXPENSES
The Co-arrangers and the Agent have incurred and will incur expenses in
connection with the arrangement of the Revolving Facility. The Borrower
agrees to reimburse each of the Co-arrangers and the Agent for the amount
of these expenses. They include the legal fees incurred in the negotiation,
preparation and signature of the Financing Documents. They also include the
fees of environmental advisers and accountants. They also include expenses
incurred (after as well as before the signing of this Agreement) in
perfecting any security constituted by the Charges and as part of the
syndication process of the Revolving Facility arranged by the Co-arrangers.
4.5 DOCUMENTARY TAXES
This sub-clause applies if any registration fee, stamp duty or other
documentary tax is required to be paid on or in connection with a Financing
Document, any document referred to in or contemplated by a Financing
Document or any judgment obtained in connection with a Financing Document.
It also applies if a fee, duty or tax is payable in order for any of these
documents to be valid, binding and enforceable, for the Security under the
Charges to be perfected or for the Financing Documents to be admitted as
evidence in court. In these circumstances the Borrower agrees to pay the
fee, duty or tax together with any interest or penalty for late payment.
Alternatively, the Agent or a Lender may make the payment. If it does so,
the Borrower agrees to reimburse the Agent or that Lender for the amount
paid and the losses and expenses incurred as a result of the payment.
4.6 PROTECTION OF RIGHTS
A Co-arranger, the Agent or a Lender may incur expenses in protecting,
preserving or (if any Company is in breach of its obligations under the
Financing Documents) enforcing its rights under the Financing Documents.
The Borrower agrees to reimburse that Co-arranger, the Agent or that Lender
for the amount of these expenses.
5. CANCELLATION
5.1 VOLUNTARY CANCELLATION
The Borrower may cancel the whole or part of the Total Revolving Facility
Commitments by giving notice to the Agent. This notice will take effect
five Business Days after it is received by the Agent unless a later date is
specified in the notice. In that case the notice will take effect on the
specified date. A cancellation of part of the Total Revolving Facility
Commitments will, however, only take effect if the conditions in Clause 5.2
are satisfied. The Borrower may only cancel a part of the Total Revolving
Facility Commitments which is a minimum amount of (Pounds)1,000,000 and an
integral multiple of (Pounds)500,000.
13
5.2 CONDITIONS PRECEDENT TO VOLUNTARY CANCELLATION
A voluntary cancellation of part of the Total Revolving Facility
Commitments under Clause 5.1 will only be effective if both the following
are true:
(A) The Agent has received a certificate signed by the senior financial
officer or a director of the Borrower. The certificate must relate to
the proposed cancellation. It must state that, after the cancellation
takes effect, the Borrower will have sufficient sources of liquidity
in existence to meet its ongoing working capital and general corporate
requirements. The certificate must be received by the Agent no later
than the time it receives the notice of cancellation.
(B) Reasonable evidence of the sources of liquidity referred to in
paragraph (A) has been delivered to the Agent before the cancellation
is due to take effect. This is only required if Lenders comprising an
Instructing Group request the Agent to demand this evidence. These
requests must be received by the Agent by no later than 5.00 p.m. on
the third Business Day before the date the proposed cancellation would
otherwise take effect.
5.3 MANDATORY CANCELLATION ON DISPOSALS
(A) OBLIGATION TO CANCEL: The Borrower agrees to cancel all or part of the
Total Revolving Facility Commitments in accordance with this sub-
clause.
(B) CIRCUMSTANCES IN WHICH OBLIGATION TO CANCEL ARISES: The Borrower will
be obliged to make a cancellation under this sub-clause following the
disposal of any of the assets of the Borrower or any of its
Subsidiaries (a "DISPOSAL EVENT"). This does not apply to the
following disposals:
(i) A disposal of obsolete assets.
(ii) Disposals realising Net Disposal Proceeds less than
(Pounds)1,000,000 in aggregate in any financial year of the
Borrower. Where the asset which is the subject of the disposal
is being replaced, the Net Disposal Proceeds will be deemed for
the purpose of this sub-paragraph to have been realised on the
later of the date of disposal of that asset and the date of
replacement of that asset (but no later than the date 6 months
after that date of disposal).
(iii) A disposal between the Borrower and any Guarantor (which is a
wholly-owned member of the Borrower's Group) or between
Guarantors (each of which is a wholly-owned member of the
Borrower's Group).
(iv) A disposal by a Subsidiary where each of the following is true:
(a) the Subsidiary is prevented by applicable law from making an
amount equal to the Net Disposal Proceeds available to the
Borrower for it to make any payment resulting from a
Disposal Event,
(b) the Borrower and that Subsidiary have used all reasonable
endeavours to enable an amount equal to the Net Disposal
Proceeds to be made available to the
14
Borrower so that any payment resulting from the Disposal
Event can be made, and
(c) the Borrower or that Subsidiary pays an amount equal to the
Net Disposal Proceeds into a blocked interest-bearing
account held with the Agent or a nominee of the Agent and
charged to the Agent as trustee or agent (or both) for the
Lenders under a document expressed to be a Charge.
(v) Disposals for non-cash consideration. This exception will only
apply to the extent of a maximum amount in Net Disposal Proceeds
of (Pounds)2,500,000 during the period from the date of this
Agreement until the Facility Termination Date.
(C) AMOUNT OF MANDATORY CANCELLATION: The amount of the Total Revolving
Facility Commitments which will be cancelled under this sub-clause
will be an amount equal to the Net Disposal Proceeds.
(D) TIMING OF MANDATORY CANCELLATION: The amount of Total Revolving
Facility Commitments due to be cancelled under this sub-clause will be
cancelled on the date two Business Days after receipt by a member of
the Borrower's Group of the proceeds of the disposal.
Where the disposal proceeds are received as deferred cash
consideration, the due date for cancellation will be deferred until
the date two Business Days after the Borrower or any of its
Subsidiaries realises cash from those proceeds.
Where the disposal proceeds are applied towards the cost of a
replacement asset as described in paragraph (D) of the definition of
"Net Disposal Proceeds" in Clause 1.1, the due date for cancellation
will be deferred (by no more than 6 months) until the date two
Business Days after the replacement asset is acquired (if this occurs
after receipt by a member of the Borrower's Group of the Net Disposal
Proceeds).
5.4 MANDATORY CANCELLATION ON FLOTATION
The Total Revolving Facility Commitments will be cancelled automatically
with effect from the due date for repayment of the Loan under Clause
9.3(D).
5.5 EFFECT OF CANCELLATION
The Borrower may not borrow any part of the Total Revolving Facility
Commitments which has been cancelled or which is the subject of a notice of
voluntary cancellation. When any cancellation takes effect, the Revolving
Facility Commitments of the Lenders will be reduced by an aggregate amount
equal to the reduction of the Total Revolving Facility Commitments. Each
Lender's Revolving Facility Commitment will be reduced in the same
proportion.
5.6 AMORTISATION OF COMMITMENTS
The Total Revolving Facility Commitments will be reduced automatically to
zero in three equal semi-annual instalments. Each reduction will be
calculated by reference to the amount of Total Revolving Facility
Commitments immediately prior to that reduction and the number of remaining
instalments
15
at that time. For these purposes the Total Revolving Facility Commitments
will be deemed to include any part of the Total Revolving Facility
Commitments cancelled under Clause 5.1 since the preceding Amortisation
Date or, where there has not been a prior Amortisation Date, since the
First Amendment Date.
The reductions will take place on the following dates (the "AMORTISATION
DATES"):
Amortisation Date
-----------------
31 May 2001
30 November 2001
31 May 2002
or, if any such day is not a Business Day, the immediately preceding
Business Day.
Each Lender's Revolving Facility Commitment will be reduced in the same
proportion.
16
PART III : THE LOAN
6. ADVANCE OF FUNDS
6.1 NOTICE TO THE AGENT
When the Borrower wishes to borrow under the Revolving Facility it will
deliver a notice to the Agent. This notice must be substantially in the
form of Schedule 5. The notice must specify:
(A) the amount to be borrowed;
(B) the length of the Interest Period;
(C) the date of the borrowing. This date must be no sooner than the first
Business Day after the date the Agent receives the notice. For these
purposes if the Agent receives the notice on a day which is not a
Business Day or after 10.00 a.m. on a Business Day, it will be treated
as having received the notice on the following Business Day; and
(D) the purpose for which the proceeds of the Advance are to be applied.
Where the purpose specified is to finance any capital expenditure
described in Clause 2.2(B)(ii), the notice must provide details of the
proposed expenditure and must be certified by the senior financial
officer of the Borrower.
6.2 LIMITATIONS ON ADVANCES
The following limitations apply to Advances:
(A) No Advance may exceed the amount of the aggregate of the Available
Revolving Facility Commitments of all the Lenders. This limitation
will be applied as at the Advance Date. For this purpose:
(i) any part of the Total Revolving Facility Commitments which is
subject to a notice of voluntary cancellation will be treated as
cancelled;
(ii) any reduction of the Total Revolving Facility Commitments due to
take effect on the Advance Date will be treated as having taken
effect;
(iii) the amount of any Advance due to be repaid on the Advance Date
will be treated as having been repaid; and
(iv) any other Advance due to be made on the Advance Date will be
treated as having been made.
(B) An Advance must be a minimum of (Pounds)1,000,000 and an integral
multiple of (Pounds)500,000 or be the aggregate of the Available
Revolving Facility Commitments of all the Lenders.
(C) The Advance Date of an Advance must be a Business Day and at least one
month before the Facility Termination Date.
17
(D) The Interest Period of each Advance must comply with Clause 7.
(E) There must be no more than seven Advances outstanding at any one time.
For this purpose, as at any Advance Date any Advance due to be repaid
on any Advance Date will be treated as having been repaid on that
Advance Date.
6.3 NOTICE TO THE LENDERS
The Agent agrees to provide promptly details of each notice of borrowing to
each Lender. These details will also include the amount of the Lender's
participation in the Advance.
6.4 CONDITIONS TO BORROWING
The Lenders will only be obliged to make an Advance to the Borrower if:
(A) the Revolving Facility is available in accordance with Clause 2;
(B) a properly completed and signed notice of borrowing has been received
by the Agent;
(C) the representations in Clause 16.1 (other than paragraphs (S), (T),
(U) and (V) thereof) are true on the Advance Date; and
(D) there is no outstanding Termination Event or Potential Termination
Event on the Advance Date.
6.5 OBLIGATION TO ADVANCE FUNDS
If the requirements of this Clause are satisfied each Lender agrees to
advance its participation in the Advance to the Borrower. The Advance will
be made on the date specified in the notice of borrowing.
6.6 CONSEQUENCES OF THE ADVANCE NOT BEING MADE
If the notice of borrowing is delivered but no Advance is made the Lenders
may incur losses and expenses as a result. The losses and expenses may
include those incurred in liquidating or otherwise utilising amounts
borrowed by the Lenders to fund the Advance. They may also include the
losses and expenses incurred in terminating commitments relating to the
funding or incurred in hedging open positions resulting from the Advance
not being made. The Borrower agrees to reimburse each Lender for the amount
of these losses and expenses. This sub-clause does not apply if the Advance
is not made by reason of a default of a Lender.
7. INTEREST
7.1 INTEREST PERIODS
Each Advance will have one Interest Period only.
7.2 DURATION OF INTEREST PERIODS
18
(A) ADVANCES: The Interest Period for each Advance must be a period of 1,
2, 3 or 6 months or any other period not exceeding 12 months which the
Agent (acting on the instructions of all the Lenders) and the Borrower
may agree in writing.
(B) INITIAL 3-MONTH PERIOD: The Interest Period for an Advance which
commences on a date within three months of the First Amendment Date
or, if earlier, the completion of initial syndication of the Revolving
Facility must be a period of 1 month.
7.3 SELECTION OF INTEREST PERIODS
(A) ADVANCES: The Borrower may select the Interest Period for each Advance
in its notice of borrowing.
(B) FAILURE TO SELECT: When the Borrower does not select the Interest
Period in accordance with paragraph (A), the Interest Period will be
three months or such other period as will comply with Clauses 7.2 and
7.4.
7.4 ADJUSTMENT OF INTEREST PERIOD
(A) An Interest Period will end on the last Business Day of a calendar
month if it is for a number of complete months and either:
(i) it commenced on the last Business Day of a calendar month; or
(ii) it commenced on a day for which there is no corresponding day in
the month in which it is due to end.
(B) This paragraph applies when the Interest Period for an Advance would
otherwise begin before but end after an Amortisation Date. In this
case that Interest Period will end on that Amortisation Date. This
paragraph will not apply, however, in the case of an Advance which,
when aggregated with any other Advances outstanding on that
Amortisation Date, would amount to not more than the Total Revolving
Facility Commitments available following the reduction of the Total
Revolving Facility Commitments on that Amortisation Date.
(C) Any Interest Period which would otherwise begin before but end after
the Facility Termination Date will, subject to paragraph (D), end on
the Facility Termination Date.
(D) Any Interest Period which would otherwise end on a day which is not a
Business Day will be extended to the next Business Day, unless that
day is in another calendar month. Where it is in another calendar
month the Interest Period will end on the preceding Business Day.
7.5 RATE OF INTEREST
The rate of interest applicable during an Interest Period will be a rate
per annum equal to LIBOR for that Interest Period plus the Applicable
Margin plus the Costs Rate.
19
7.6 PAYMENT OF INTEREST
(A) The Borrower agrees to pay interest accrued on the outstanding amount
of each Advance in arrear on the last day of the Interest Period in
respect of that Advance. Where an Interest Period is longer than 6
months the Borrower also agrees to pay interest on the day 6 months
after the start of that Interest Period.
(B) The Borrower may give notice to the Agent that it wishes to pay all
accrued interest on the Loan on the last Business Day of its financial
year. This notice must be received by the Agent no later than five
Business Days before that day. In this case the Borrower agrees to
pay that amount of interest on that date. Payments which would
otherwise have been due under paragraph (A) will be adjusted
accordingly.
7.7 NOTIFICATION OF INTEREST RATE
The Agent agrees to notify the Borrower and the Lenders promptly of the
determination of a rate of interest under this Agreement.
8. REPAYMENT
The Borrower agrees to repay each Advance made to it on the last day of the
Interest Period for that Advance. Where on any date on which an Advance is
to be repaid the Borrower borrows a further Advance then the Agent shall,
unless the Borrower requests otherwise, apply the amounts to be advanced in
or towards repayment of the Advance required to be repaid on that date.
This will be treated as satisfying pro tanto the obligation of the Borrower
to repay the relevant Advance and of the Lenders to make the relevant
Advance.
9. PREPAYMENT
9.1 OPTIONAL PREPAYMENT
The Borrower may give notice that it will repay the whole or part of any
Advance on any day prior to the last day of the Interest Period for that
Advance. Clause 10.7 applies to any repayment under this sub-clause. This
notice must state:
(A) the date of prepayment, which will be at least 5 Business Days after
the notice is received by the Agent;
(B) which Advance is affected; and
(C) the amount to be prepaid, which will be a minimum of (Pounds)4,000,000
or the whole of the amount outstanding under that Advance.
The Borrower agrees to prepay that Advance in accordance with its notice.
9.2 MANDATORY PREPAYMENT ON DISPOSALS
(A) OBLIGATION TO PREPAY: The Borrower agrees to prepay the Loan in
accordance with this sub-clause.
20
(B) CIRCUMSTANCES IN WHICH OBLIGATION TO PREPAY ARISES: The Borrower will
be obliged to make a prepayment under this sub-clause where:
(i) the Total Revolving Facility Commitments are cancelled (in whole
or in part) under Clause 5.3; and
(ii) as a result of that cancellation, the Loan would otherwise exceed
the Total Revolving Facility Commitments following the
cancellation.
(C) AMOUNT OF MANDATORY PREPAYMENT: The amount the Borrower is obliged to
repay under this sub-clause will be the amount by which the Loan would
exceed the Total Revolving Facility Commitments as described in Clause
9.2(B)(ii).
The amount required to be repaid under this sub-clause on any occasion
may be less than (Pounds)5,000,000. In this case the amount which
would otherwise be due to be repaid will be reserved, but not repaid.
On the next occasion an amount becomes repayable under this sub-clause
the amount reserved will be added to that amount and the aggregate
will be repayable if it exceeds (Pounds)5,000,000. If it does not
exceed (Pounds)5,000,000 the aggregate amount will be reserved and the
previous sentence will apply to this aggregate reserved amount. The
Borrower may elect to repay any amount which would otherwise be
reserved under this paragraph. In this case it will repay that amount
(and any amount previously reserved and not repaid under this
paragraph) in accordance with paragraph (D) and that amount will not
be reserved.
(D) TIMING OF MANDATORY PREPAYMENT: Subject to paragraph (E), the amount
repayable under this sub-clause will become due for repayment on the
date the applicable cancellation occurs under Clause 5.3(D).
Clause 10.7 applies to any repayment under this sub-clause.
(E) BREAK COSTS: The Borrower may certify to the Agent that a repayment
required under this sub-clause is due on a date other than the last
day of the Interest Period applicable to the amount being repaid.
The Borrower's obligation to make a repayment under this sub-clause
will be deferred until the last day of the Interest Period applicable
to the amount being repaid. This deferral will only apply, however,
if the Borrower deposits in the Charged Account an amount equal to the
amount which it would otherwise have been obliged to repay (save to
the extent the prepayment obligation will be discharged by an amount
already standing to the credit of the Charged Account). This deposit
must be made on or before the date the repayment would otherwise have
been due.
9.3 MANDATORY PREPAYMENT ON FLOTATION
(A) OBLIGATION TO PREPAY: The Borrower agrees to prepay the Loan in
accordance with this sub-clause.
(B) CIRCUMSTANCES IN WHICH OBLIGATION TO PREPAY ARISES: The Borrower will
be obliged to make a prepayment under this sub-clause upon the shares
21
of the Borrower, the Parent or any Holding Company of the Borrower or
the Parent becoming the subject of an initial public offering in
connection with the application by the relevant company for the
admission of its shares to listing on any stock exchange or its shares
being made available for the first time for dealing through any public
dealings facility.
(C) AMOUNT OF MANDATORY PREPAYMENT: The amount the Borrower is obliged to
repay under this sub-clause will be the full amount of the Loan.
(D) TIMING OF MANDATORY PREPAYMENT: The amount repayable under this sub-
clause will become due for repayment on the earlier of:
(i) the date of receipt of the sale or issue proceeds by a member of
the Group or any shareholder in any member of the Group; and
(ii) the date of listing becoming effective.
Clause 10.7 applies to any repayment under this sub-clause.
(E) EFFECT OF PREPAYMENT: A prepayment of the Loan under this sub-clause
will reduce the Total Revolving Facility Commitments to zero.
9.4 NO OTHER PREPAYMENT
The Borrower may not repay the Loan early except in the manner permitted or
required by this Agreement.
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PART IV: CHANGES OF CIRCUMSTANCES AND PAYMENTS
10. CHANGES OF CIRCUMSTANCES
10.1 ILLEGALITY
(A) NOTICE: Each Lender may notify the Borrower if it has reasonable
cause to believe it is or will be acting illegally in relation to the
Revolving Facility. The illegality may relate to the performance of
the Lender's obligations, the maintenance of the Revolving Facility or
the Lender's funding arrangements. Each Lender confirms it is not
acting illegally in relation to the Revolving Facility on the First
Amendment Date.
(B) CANCELLATION AND PREPAYMENT: If a Lender delivers a notice of
illegality the Available Revolving Facility Commitment of that Lender
will be cancelled on the date of that notice. If the Lender certifies
that, because of a legal requirement applicable to the Lender, the
participation of the Lender in the Loan must be repaid before the last
day of any applicable Interest Period, the Borrower agrees to repay
the participation on the earlier date specified by the Lender. Clause
10.7 applies to any cancellation or repayment under this sub-clause.
10.2 INCREASED COSTS
(A) TYPES OF INCREASED COSTS: This sub-clause applies where all of (i),
(ii) and (iii) are true:
(i) Either:
(a) there is a change in a legal requirement applicable to a
Lender Group Company or in any other requirement with which
it is accustomed to comply, or a change in its
interpretation or application; or
(b) a Lender Group Company complies with a direction or request
of an authority with whose directions or requests it is
accustomed to comply.
(ii) As a result, any of the following occurs:
(a) a Lender Group Company incurs an expense;
(b) a Lender Group Company's effective return from the Revolving
Facility or on its overall capital is reduced;
(c) any amount payable to a Lender Group Company is reduced; or
(d) a Lender Group Company does not recover an amount which
would otherwise have been paid to it.
No account will be taken of tax on the overall net income
(including overall net profit or gains) of a Lender, or a Lender
Group Company, in the country in which it has its principal
23
office or the office through which it is acting for the purposes
of this Agreement. Any loss, reduction or expense wholly
reflected in the Costs Rate, or which is recoverable under
Clause 10.4 (or would have been so recoverable but for Clause
10.5) will also not be taken into account.
(iii) The losses, reductions and expenses arising as a result are
wholly or partly attributable to the Lender's participation in
the Revolving Facility or the arrangements made by a Lender in
funding its participation in the Revolving Facility.
(B) NOTICE: Each Lender may notify the Borrower if it becomes aware that
this sub-clause applies. This notice will contain reasonable detail
of the circumstances which have caused this sub-clause to apply.
(C) PAYMENT OF ADDITIONAL AMOUNTS: The Borrower agrees to reimburse each
Lender for the losses, reductions and expenses described in paragraph
(A).
(D) PREPAYMENT AND CANCELLATION: If a Lender delivers a notice under
paragraph (B):
(i) the Borrower may deliver to that Lender a notice of prepayment.
The Borrower agrees to prepay the participation of that Lender
in the Loan five Business Days after the Lender receives this
notice (or on any later date or dates specified in the notice).
Clause 10.7 applies to this prepayment; and/or
(ii) the Borrower may deliver to that Lender a notice of
cancellation. That Lender's Revolving Facility Commitment will
be reduced to zero on the date of delivery of that notice.
(E) BASLE EXCEPTION: Paragraph (C) will not oblige the Borrower to
compensate any Lender in respect of itself or any other Lender Group
Company for any losses, reductions and expenses described in paragraph
(A)(ii) which result from the implementation, as at the First
Amendment Date, of the matters set out in the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and Capital
Standards" (the "BASLE REPORT"), the Directive of the Council of the
European Communities on a Solvency Ratio for Credit Institutions
(89/647/EEC of 18th December, 1989) (the "SOLVENCY DIRECTIVE") or the
Directive of the Council of the European Communities on Own Funds of
Credit Institutions (89/299/EEC of 17th April, 1989) (the "OWN FUNDS
DIRECTIVE") in each case as amended prior to the date of this
Agreement. This exception will not apply if the losses, reductions
and expenses described in paragraph (A)(ii) result from any change
after the First Amendment Date in, or in the interpretation or
application of, the Basle Report, the Solvency Directive or the Own
Funds Directive.
10.3 MARKET DISRUPTION
(A) NATURE OF MARKET DISRUPTION: This sub-clause applies if any of (i),
(ii), or (iii) are true:
24
(i) Lenders with Available Revolving Facility Commitments exceeding
35% of the aggregate Available Revolving Facility Commitments
notify the Agent that they believe that LIBOR would not reflect
fairly the cost to them of funding their participations in any
relevant Advance (the "AFFECTED ADVANCE"). For the purpose of
making this computation, the Agent will disregard a notice from
a Lender in circumstances where the Borrower has satisfied the
Agent (supported by any evidence that the Agent may reasonably
request) that the only reason why LIBOR would not reflect fairly
the cost to that Lender of funding its participation in an
Advance is a deterioration in that Lender's credit standing.
(ii) LIBOR cannot be determined for any affected Advance because no
rate appears on the Screen for sterling and the relevant
Interest Period and fewer than two Reference Banks provide
quotations.
(iii) Lenders with Available Revolving Facility Commitments exceeding
35% of the aggregate Available Revolving Facility Commitments
notify the Agent that they are unable to fund their
participations in any affected Advance in the London inter-bank
market.
(B) NOTICE: The Agent agrees to notify the Borrower and the Lenders if
this sub-clause applies.
(C) ALTERNATIVE INTEREST RATE ARRANGEMENTS: If the Agent delivers a
notice of market disruption each of the following applies:
(i) The means of determining the rate of interest applicable to the
affected Advance will be suspended. Instead the Borrower agrees
to pay interest to the Lenders in respect of the affected
Advance in the manner requested by the Agent in accordance with
this clause. A request by the Agent may specify periods to be
used for the computation of interest which periods will, in
aggregate, equal the Interest Period for the affected Advance.
It must also specify the rate of interest to apply for a period.
This rate will be the rate determined by the Agent to reflect
the cost to each Lender of funding for the period plus the
Applicable Margin plus the Costs Rate. In order to assist the
Agent in this determination each Lender agrees to provide to the
Agent any information which the Agent may request. If this
information is received by the Agent within any time period
specified by the Agent it will be taken into account by the
Agent in making its determination.
(ii) The Borrower and the Agent will negotiate the terms of an
alternative arrangement for determining the rate of interest for
the affected Advance. The negotiations will be carried on in
good faith. Neither party is bound to continue the negotiations
after the date 30 days after the Borrower receives the Agent's
notice. If agreement is reached and if it is approved by all the
Lenders the rate of interest in respect of the affected Advance
will be determined in accordance with the agreement. Sub-
paragraph (i) will not apply to the extent that it is expressly
excluded by this agreement.
25
(iii) If the circumstances described in paragraph (A) cease to apply
the Agent will notify the Borrower and the Lenders. The notice
will specify the transitional arrangements proposed by the Agent
which as far as possible will be in accordance with the normal
interest rate fixing provisions of this Agreement. The Borrower
agrees to pay interest in respect of the affected Advance to the
Lenders in the manner described in this notice unless a
different arrangement is agreed by the Agent and the Borrower
and approved by all the Lenders. In this case the Borrower
agrees to pay interest in respect of the affected Advance to the
Lenders in the manner agreed.
(D) PREPAYMENT: If this sub-clause applies, the Borrower may deliver a
notice of prepayment in respect of the affected Advance to the Agent.
The Borrower agrees to prepay the affected Advance five Business Days
after the Agent receives this notice (or on any later date or dates
specified in the notice). Clause 10.7 applies to this prepayment.
(E) WITHDRAWAL: If this sub-clause applies, the Borrower may notify the
Agent before 12.30 p.m. on the Advance Date relating to the affected
Advance that it wishes to withdraw the notice of borrowing relating to
the affected Advance. In this case that notice of borrowing will be
treated as having not been made. Clause 6.6 will not apply in these
circumstances.
10.4 WITHHOLDINGS
(A) WITHHOLDINGS AND DEDUCTIONS: This sub-clause applies if the Borrower
or a Guarantor is required by law, or by any requirement of a taxing
authority with which it is obliged to comply, to make a payment under
this Agreement net of a withholding or deduction.
(B) NOTICE: The Borrower agrees to notify the Agent if it becomes aware
that this sub-clause applies.
(C) GROSSING UP: The Borrower and each Guarantor agrees to increase the
amount of any payment from which it has to withhold or deduct any sum.
This increase will ensure that the person entitled to the payment will
receive, after that sum has been deducted or withheld, the amount it
would have received had no sum had to be withheld or deducted.
(D) PAYMENT OF TAX: The Borrower and each Guarantor will pay to the
appropriate authority all amounts withheld or deducted by it and
certify to the Agent's reasonable satisfaction that it has withheld or
deducted those sums and paid them to that authority. If a receipt or
other evidence of payment can be obtained from that authority without
incurring unreasonable cost or expense, the Borrower or that Guarantor
agrees to deliver this to the Agent as soon as reasonably practicable.
(E) PREPAYMENT AND CANCELLATION: If this clause applies to payments by
the Borrower:
(i) the Borrower may deliver to the Agent a notice of prepayment.
This notice may relate to any part of the Loan which is subject
(or the interest on which is subject) to the withholding or
26
deduction. The Borrower agrees to prepay the Loan (or the part
of it which is affected) five Business Days after the Agent
receives this notice (or on any later date or dates specified in
the notice). Clause 10.7 applies to this prepayment; and/or
(ii) the Borrower may deliver to the Agent a notice of cancellation.
This notice may relate to any part of the Total Revolving
Facility Commitments which, if drawn, would be subject (or the
interest on which would be subject) to the withholding or
deduction. Such part of the Total Revolving Facility Commitments
will be reduced to zero on the date of delivery of that notice.
(F) REFUND OF TAX CREDITS: If the Borrower makes a payment under Clause
10.4(C) (a "TAX PAYMENT") the relevant Lender or, as the case may be,
the Agent agrees to notify the Borrower if it has obtained a refund of
tax or obtained and used a credit against tax on its overall net
income (a "TAX CREDIT") which that Lender or, as the case may be, the
Agent is able to identify as attributable to that Tax Payment. To the
extent that it can in its absolute discretion without any adverse
consequences for it, that Lender or, as the case may be, the Agent
shall reimburse the Borrower such amount as the Lender or, as the case
may be, the Agent determines to be the proportion of that Tax Credit
as will leave the Lender or, as the case may be, the Agent (after that
reimbursement) in no better or worse position in respect of its tax
liabilities than it would have been in if no Tax Payment had been
required. No Lender or, as the case may be, Agent shall be obliged to
disclose any information regarding its tax affairs and computations,
and this sub-clause does not affect the right of any Lender or, as the
case may be, Agent to arrange its tax affairs as it thinks fit.
10.5 INLAND REVENUE TREATMENT OF THE LENDERS
The Borrower will not be required to pay increased amounts under Clause
10.4 in respect of a payment of interest to a Lender in either of the
following cases:
(A) At the date the principal amount on which that interest accrued was
advanced that Lender was not a bank for the purposes of section 349(3)
of the Income and Corporation Taxes Xxx 0000.
(B) The person beneficially entitled to that payment of interest at the
time it is paid is not within the charge to United Kingdom corporation
tax in respect of that interest.
This sub-clause only applies so far as a withholding or deduction is due to
the circumstances described in paragraph (A) or (B) above. It does not
apply where the circumstances described in paragraph (A) or (B) above arise
as a result of a change in law or concession or a change in the
interpretation or application of law or concession. The Lender agrees to
notify the Agent if paragraph (A) or (B) above applies.
10.6 CONFIRMATIONS FROM LENDERS
The Borrower or the Agent may request a Lender to confirm whether or not
the circumstances described in Clause 10.5(A) or (B) exist. Each Lender
agrees to provide the confirmation requested as soon as reasonably
practicable.
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10.7 PREPAYMENT
This sub-clause applies if the Borrower is obliged to repay the Loan or any
part of it under this Clause, Clause 9 or Clause 20.2. In this event the
Borrower agrees to pay on the date repayment is due interest accrued on the
Loan (or the amount to be repaid) up to that date. If the date repayment
is due is not the last day of the Interest Period applicable to the amount
being repaid, the Borrower will reimburse each affected Lender for the
losses and expenses that Lender has incurred, or will incur, as a result.
These losses and expenses may include those incurred in liquidating or
otherwise utilising amounts borrowed by the Lender to fund its
participation in the Loan (or the amount repaid). They may also include
losses and expenses incurred in hedging open positions resulting from the
repayment.
10.8 MITIGATION
This sub-clause does not affect the obligations of the Borrower under the
other sub-clauses of this Clause. If this Clause applies to a Lender, that
Lender will take all steps reasonably open to it and, as the case may be,
will procure that any Lender Group Company takes all steps reasonably open
to it, to reduce the additional amounts payable by the Borrower under this
Clause or to avoid or reduce the impact of the circumstances referred to in
it. These steps may include the transfer of the Lender's rights and
obligations under this Agreement to another branch or bank acceptable to
the Borrower. The Lender or Lender Group Company will not, however, be
obliged to do anything which in its opinion would or might have an adverse
effect on it.
11. PAYMENTS
11.1 METHOD AND TIMING OF PAYMENTS
All payments under this Agreement must be made in immediately available
funds in pounds. Each payment must be received by noon on the due date.
Each payment must be for value on the due date.
11.2 PAYMENTS THROUGH THE AGENT
(A) NORMAL ARRANGEMENTS: All payments by the Borrower or by a Lender
under this Agreement will be made through the Agent. Each payment
will be made to the account of the Agent with The Royal Bank of
Scotland plc, Correspondent Banking Branch, 0-00 Xxxxx Xxxxx Xxxxxx,
Xxxxxx XX0X 0XX, account name Credit Suisse First Boston, account
number 00000000, CHAPS Xxxx 00 00 00. The Agent will pay on an amount
received as soon as practicable.
(B) ALTERNATIVE ARRANGEMENTS: If the Agent believes that it is, or will
be, illegal or impossible for it to pay on to a Lender in accordance
with paragraph (A), it agrees to notify the Borrower and that Lender.
In this case the Borrower and that Lender may agree alternative
arrangements for payments to be made to that Lender. Paragraph (A)
will not apply to the extent excluded by those alternative
arrangements. That Lender agrees to provide notice of the
arrangements to the Agent and will notify the Agent of payments in
accordance with Clause 13.1.
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(C) APPLICATION OF DEPOSIT PAYMENTS: The Borrower is not required to make
payments in accordance with this sub-clause to the extent that an
amount is debited from the Charged Account in accordance with Clause
3(C) of the document described in paragraph (B) of the definition of
"Charges" in Clause 11.
11.3 PAYMENTS TO THE BORROWER
Each payment by the Agent to the Borrower will be made to such account of
the Borrower with such bank as the Borrower may notify to the Agent from
time to time.
11.4 PAYMENTS TO THE LENDERS
Each payment by the Agent to a Lender will be made to the account of that
Lender notified to the Agent for this purpose.
11.5 CHANGE OF ACCOUNT
The Borrower or a Lender may change its receiving account by not less than
five Business Days' notice to the Agent. The Agent may change its
receiving account by giving not less than five Business Days' notice to the
Borrower and the Lenders.
11.6 REFUNDING OF PAYMENTS BY THE AGENT
This sub-clause applies if the Agent makes a payment out in the mistaken
belief that it has received or will receive an incoming payment on a
particular day. In this case the person which received the payment from
the Agent agrees to return it. It will also reimburse the Agent for all
losses and expenses incurred by the Agent as a result of funding the
payment. This sub-clause does not affect the rights of the person which
received the payment against the person which failed to make the payment to
the Agent.
11.7 NON-BUSINESS DAYS
If a payment would be due on a non-Business Day the payment obligation will
be deferred until the next Business Day. Interest and commitment fee will
be adjusted accordingly.
11.8 PAYMENT IN FULL
All payments by the Borrower will be made in full and without set off or
counterclaim. No payment will be made net of a withholding or deduction,
unless this is required by law or by any requirement of a taxing authority
with which it is obliged to comply. In this event Clause 10.4 applies.
11.9 SET-OFF
If a Company owes money under this Agreement which is due and payable the
person to whom it is owed may set-off this obligation against any moneys
owed by that party to that Company. The moneys owed by that party may be
in a different currency, arise on a separate transaction or involve another
branch. This sub-clause applies even where amounts owed to that Company
are not due and payable, if there is an outstanding Termination Event or
Potential Termination Event. Where amounts are in different currencies the
29
person to whom money is owed under this Agreement may convert amounts into
the same currency using the then current exchange rate. If a Lender sets
off an obligation under this Agreement, that Lender agrees promptly to
notify the Company concerned in accordance with Clause 23.3. The notice
will provide details of the amount set off.
12. LATE PAYMENT
12.1 DEFAULT INTEREST
The Borrower agrees to pay interest on all amounts unpaid under this
Agreement after their due date for payment. This interest will be computed
by reference to successive periods selected by the Agent. The first of
these periods will start on the due date for payment of the unpaid amount.
The rate of interest applicable during each of these periods will be a rate
per annum equal to 1% plus LIBOR for that period plus the Applicable Margin
plus the Costs Rate. This interest will be paid in arrear on the last day
of each of these periods and on the date of payment of the unpaid amount.
This interest will be payable after as well as before judgment.
12.2 INDEMNITY
If the Borrower fails to make a payment on the due date the Borrower agrees
to reimburse the person entitled to the payment for the losses and expenses
(including loss of profit) that person incurs, or will incur, as a result.
The computation of these losses and expenses will take into account any
amount received under Clause 12.1.
13. SHARING AMONG LENDERS
13.1 NOTICE
If an amount due to a Lender (the "RECIPIENT") under this Agreement is
discharged other than by payment through the Agent the Lender agrees to
notify the Agent and the Borrower in accordance with Clause 23.3. This may
occur because of the exercise of a right of set-off, by virtue of a
combination of accounts or because of a voluntary or involuntary payment by
the Borrower or a Guarantor direct to that Lender. The notification will
provide details of the amount discharged and will be delivered no later
than ten Business Days after the discharge.
13.2 DETERMINATION BY THE AGENT
Where a Lender has issued a notice under Clause 13.1 the Agent will
determine what payments, if any, are due under Clause 13.4. This
determination will be made on the basis of the information contained in all
the notices delivered to the Agent under Clause 13.1. The determination
will be notified to the Borrower and the Lenders.
13.3 LITIGATION
In determining the amount due under Clause 13.4 no account will be taken of
an amount due to a Lender which has declined to participate in legal
proceedings which resulted in the payment described in Clause 13.1. This
30
only applies if that Lender could have joined in the proceedings or could
have instituted its own proceedings, but failed to do so.
13.4 PAYMENT TO THE AGENT
The Recipient agrees to pay to the Agent an amount calculated as follows:
P = D (X - Y)
where
P = the amount payable to the Agent
D = the aggregate amount due to the Recipient out of which an
amount has been discharged
X = the fraction of D which has been discharged
Y = the fraction which has been discharged, if any, of the
aggregate amount due to the Lender which has the greatest
proportion of that amount still outstanding.
This amount will be paid no later than five Business Days after receipt of
a notice from the Agent under Clause 13.2.
13.5 OBLIGATIONS OF THE BORROWER AND THE GUARANTORS
Any amount due to the Recipient which would otherwise have been discharged
as described in Clause 13.1 will be treated as not having been discharged
to the extent of an amount which is or will be payable under Clause 13.4 as
a result. Accordingly the Borrower and each Guarantor agree to pay this
amount to the Recipient as if it had not been discharged. This payment is
required to be made whether or not the Agent has issued a determination
under Clause 13.2.
13.6 DISTRIBUTION
The Agent agrees to distribute to the Lenders the amount received by it
under Clause 13.4 as if that amount had been received from the Borrower in
discharge of an amount due under this Agreement. The Borrower will then be
treated as having paid that amount.
13.7 RECOVERY
This sub-clause applies if an amount discharged as described in Clause 13.1
is recovered from, or is required to be repaid by, the Recipient. In this
case each Lender which received the benefit of a payment made under Clause
13.4 agrees to repay to the Recipient the amount it received. Each of
these Lenders will also reimburse the Recipient for any losses or expenses
which the Recipient has incurred in connection with the discharged amount
or its recovery or repayment. The rights and obligations of the parties
shall be restored to the position before any payment became due under
Clause 13.4.
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PART V : GUARANTEE AND INDEMNITY
14. GUARANTEE
14.1 GUARANTEE
Each Guarantor guarantees the due and punctual performance of all
obligations of the Borrower under this Agreement and each Overdraft
Facility. This guarantee is unconditional and irrevocable.
14.2 AGREEMENT TO PAY
Each Guarantor agrees to pay on demand each amount due by the Borrower
which is unpaid. The demand may be made at any time on or after the due
date for payment. Payment will be made in the same currency as the amount
due by the Borrower.
14.3 CONTINUING GUARANTEE
This guarantee is a continuing guarantee. No payment or other settlement
will discharge any Guarantor's obligations until the Borrower's obligations
have been discharged in full.
14.4 OTHER GUARANTEES AND SECURITY
This guarantee is in addition to, and independent of, any other guarantee
or security.
14.5 ENFORCEMENT
This guarantee may be enforced before any steps are taken against the
Borrower or any other Guarantor or under any other guarantee or Security.
14.6 PRESERVATION OF RIGHTS
This guarantee will only be discharged by (i) the making of payment (in the
case of this Agreement, in accordance with Clause 11) in full by the
Borrower or any of the Guarantors or (ii) the receipt otherwise of payment
in full. It will not be discharged by any other action, omission or fact.
Each Guarantor's obligations will, therefore, not be affected by:
(A) The obligations of the Borrower being or becoming void, invalid,
illegal or unenforceable.
(B) Any change, waiver or release of the Borrower's obligations.
(C) Any concession or time being given to the Borrower.
(D) The winding-up or re-organisation of the Borrower.
(E) Any change in the condition, nature or status of the Borrower.
(F) Any of the above events occurring in relation to another Guarantor or
any other guarantor or provider of Security or its obligations.
32
(G) Any failure to take, retain or enforce any other guarantee or
Security.
(H) Any circumstances affecting or preventing recovery of amounts due by
the Borrower.
(I) Any other matter which might discharge a Guarantor.
Any receipt from any person other than a Guarantor will reduce the
outstanding balance only to the extent of the amount received.
14.7 REPRESENTATIONS OF A GUARANTOR
Each Guarantor confirms that it does not have the benefit of any Security
in respect of this guarantee or the indemnity in Clause 15.
14.8 COVENANTS OF A GUARANTOR
Each Guarantor agrees as follows:
(A) SECURITY: It will not have the benefit of any Security in respect of
this guarantee or the indemnity in Clause 15.
(B) EXERCISE OF RIGHTS: It will not, for so long as a Termination Event
or Potential Termination Event has occurred and is outstanding:
(i) take the benefit of any right against the Borrower or any other
person in respect of amounts paid under this guarantee; or
(ii) claim or exercise against the Borrower any right to any payment
(whether or not in connection with this Agreement).
(C) COMPETING PROOF: An Instructing Group may request a Guarantor to
submit a proof for amounts due to it by the Borrower or any other
guarantor. Each Guarantor agrees to submit a proof promptly in
accordance with this request if it is entitled to do so. All amounts
received in respect of this proof will be held by that Guarantor on
trust for the Agent and the Lenders.
The obligations in this sub-clause will cease to have effect when the
Revolving Facility has ceased to be available and there are no amounts
outstanding under this Agreement.
14.9 SUSPENSE ACCOUNT
Any amount received under this guarantee may be placed on suspense account
(bearing interest at a commercial rate, which interest shall be credited to
the account). Suspense accounts may be held by the Agent or by a Lender.
While the amounts are in the suspense account the Agent or any Lender may
claim and recover amounts from the Borrower, another Guarantor and any
other guarantor as if the amount in the suspense account had not been
received. Amounts may be taken out of a suspense account by the person
holding that account at any time for application against the amounts
outstanding under this Agreement or return to the payer of such amounts.
33
14.10 DISCHARGE CONDITIONAL
Any settlement with, or discharge of, a Guarantor will be subject to a
condition. This condition is that the settlement or discharge will be set
aside if any prior payment, or any other guarantee or security, is set
aside, invalidated or reduced. In this event each Guarantor agrees to
reimburse each Lender and the Agent for the value of the payment,
guarantee or security which is set aside, invalidated or reduced.
14.11 PRINCIPAL DEBTOR
Each Guarantor agrees to pay any amount which is expressed to be due from
the Borrower but which is not recoverable from a Guarantor as a
guarantor. Any amount due under this sub-clause will be recoverable from
each Guarantor as though the obligation had been incurred by that
Guarantor as sole or principal debtor, but otherwise on the same terms as
the obligation was expressed to be incurred by the Borrower. This sub-
clause is in addition to each Guarantor's obligations as a guarantor. The
payment by the Borrower or any Guarantor of any amount payable by virtue
of this sub-clause will (subject to Clause 14.10) discharge pro tanto the
obligations on each Guarantor to pay the amounts expressed to be payable
by it under this sub-clause.
15. GUARANTOR'S INDEMNITY
15.1 INDEMNITY
This Clause applies if the Borrower fails to make a payment expressed to
be due under this Agreement on the due date. In this event each Guarantor
agrees to reimburse the person entitled to the payment for the losses and
expenses (including loss of profit) that person incurs, or will incur, as
a result. Each Guarantor also agrees to reimburse each Lender and the
Agent for all losses and expenses arising from any obligations of the
Borrower being or becoming void, invalid, illegal or unenforceable.
15.2 AMOUNT OF LOSS
For the purposes of this Clause a Lender and the Agent will be treated as
having suffered a loss equal to the amount expressed as being due to it
by the Borrower, but which is unpaid (taking into account any amounts
paid under Clause 14). If this treatment is incorrect the Lender or the
Agent will produce evidence of its loss.
34
PART VI : REPRESENTATIONS, COVENANTS AND TERMINATION EVENTS
16. REPRESENTATIONS
16.1 REPRESENTATIONS
Each Company confirms that each of the following is true as at the date of
this Agreement (except in the case of paragraph (U), which is confirmed as
at the date described in that paragraph):
(A) NATURE OF COMPANY: It is a company duly incorporated and validly
existing under the laws of its country of incorporation.
(B) POWERS OF COMPANY: It has power to own its assets and conduct its
business as it is to be conducted after the Completion Date. It also
has corporate power to sign and deliver those of the Transaction
Documents to which it is a party (and which it has signed and
delivered) and to exercise its rights and perform its obligations
under those of the Transaction Documents to which it is a party.
(C) AUTHORISATIONS: The signature and delivery on its behalf of those of
the Transaction Documents to which it is a party (and which it has
signed and delivered) and the exercise of its rights and the
performance of its obligations under the Transaction Documents have
been duly authorised by it.
(D) BINDING OBLIGATIONS: This Agreement has been and, when executed, the
other Transaction Documents (other than the NTL Site Sharing
Agreement) to which it is a party will be duly signed and delivered by
it. Its obligations described in the Financing Documents to which it
is a party, when executed, will be its valid and binding obligations
in accordance with their terms, subject to the reservations contained
in paragraph 8 of the opinion of Xxxxxxxxx and May (the form of which
is set out in Schedule 11) and in any legal opinion delivered under
Clause 19.1(W)(iii) relating to its obligations under the Transaction
Documents. Its material obligations under the other Transaction
Documents to which it is a party, when executed, will be its valid and
binding obligations in accordance with their terms.
(E) LEGALITY AND CONTRAVENTIONS: The signature and delivery on its behalf
of the Transaction Documents to which it is a party and the exercise
of its rights and performance of its obligations under such
Transaction Documents and the creation of Security by it under the
Charges (if applicable):
(i) are not prohibited by applicable law, regulation or order or by
its constitutional documents;
(ii) do not require any approval, filing, registration or exemption
(other than the perfection of the Security constituted by the
Charges by means of registration at H.M. Land Registry, the Land
Register, the Register of Sasines, Companies House and the Trade
Marks Registry, or as disclosed in any legal opinion delivered
under Clause 19.1(W)(iii) relating to its obligations under the
Transaction Documents); and
35
(iii) are not prohibited by, and do not constitute an event of
default under, and do not result in an obligation to create
Security under, any document or arrangement to which it is a
party and which is material in the context of this Agreement.
(F) RANKING OF OBLIGATIONS: Its obligations under the Financing Documents
are secured by the Charges. The Charges will, when executed (and
subject to the required registrations being made and to any Security
permitted by Clause 19.1(C)(ii) and (iii)), constitute a first
priority security interest which is valid and enforceable over the
assets referred to in the Charges, subject to the reservations (other
than reservation 8(G)) contained in paragraph 8 of the opinion of
Xxxxxxxxx and May (the form of which is set out in Schedule 11) and in
any legal opinion delivered under Clause 19.1(W)(iii) relating to its
obligations under the Transaction Documents. Amounts due under this
Agreement will, for security purposes, rank at least equally with
amounts due under the Overdraft Facilities. No amounts have been
repaid by the Borrower under the Subordinated Loan Agreement, and no
amounts are repayable until all amounts expressed to be owed under the
Financing Documents and the Overdraft Facilities have been paid in
full and the Revolving Facility is no longer available.
(G) NO TERMINATION EVENT: No Termination Event or Potential Termination
Event has occurred and is continuing and none will occur as a result
of the exercise of its rights or the performance of its obligations
under the Financing Documents or as a result of the acquisition by the
Borrower of the Transmission Business on the Completion Date.
(H) ACCOUNTS: The audited financial statements and (if prepared) the
consolidated audited financial statements most recently delivered
under Clause 17.1 give a true and fair view of the results of each
Company's operations and the financial position of the Group taken as
a whole and the Borrower's Group taken as a whole. These financial
statements were prepared in accordance with Generally Accepted
Accounting Principles consistently applied except to the extent that
the accompanying notes provide a description of a different treatment.
(I) LITIGATION: There exists no litigation which is reasonably likely to
have an unfavourable outcome materially adversely affecting (in the
case of the Borrower) its ability to perform its obligations under the
Financing Documents or (in the case of any other Company) the
Guarantors' ability (taken as a whole) to perform the Guarantors'
obligations under the Financing Documents or, in the case of the
Borrower, its ability to perform its material obligations under the
Transmission Agreement. This representation does not apply to any
litigation disclosed in the legal due diligence report from Xxxxxx
Xxxx described in paragraph 11 of Schedule 3.
(J) SECURITY: No Security exists over any of its assets, except as
permitted by Clause 19.1(C).
(K) REPRESENTATIONS IN THE CHARGES: The representations given by it in
the Charges are true as at the time they are made and repeated.
36
Each Guarantor confirms that the following is true:
(L) GUARANTEEING POWERS: It has the power to guarantee the whole of the
sums available under this Agreement. The borrowing of the full amount
available under this Agreement does not contravene or exceed any
guaranteeing limitation on it (or its directors) under its
constitutional documents or any other document to which it is a party
and which is material in the context of this Agreement.
Each of the Borrower and the Parent confirms that each of the following is
true:
(M) BORROWING POWERS: The Borrower has the power to borrow the whole of
the sums available under this Agreement. The borrowing of the full
amount available under this Agreement does not contravene or exceed
any borrowing limitation on it (or its directors) under its Memorandum
and Articles of Association or any other document to which it is a
party and which is material in the context of this Agreement.
(N) NO MATERIAL ADVERSE CHANGE:
(i) There has been no change in financial condition of the Borrower
or (taken as a whole) the Parent and the Borrower's Group having
a material adverse impact on the Borrower's or (taken as a whole)
the Guarantors' ability to perform its or their payment
obligations under the Financing Documents since the last date as
at which each of the covenants in Clause 18.2 were measured. The
assessment of whether the change in financial condition is
material will be measured against the covenants tested on that
date.
(ii) In addition no event or circumstance has occurred and is
continuing affecting the business or operations of the Borrower
and (taken as a whole) the Parent and the Borrower's Group and
having a material adverse impact on the Borrower's or (taken as a
whole) the Guarantors' ability to perform its or their payment
obligations under the Financing Documents. The assessment of
whether there has been a material adverse impact will be measured
against the business or operations of the Borrower and (taken as
a whole) the Parent and the Borrower's Group on the Completion
Date after the acquisition of the Transmission Business.
(O) AGREEMENTS EFFECTIVE: Each of the Share Sale Agreement, the
Shareholders Agreement, the Transmission Agreement and the Contracts
for Services has been duly executed by all parties and is in full
force and effect, each of the NTL Site Sharing Agreement and the
Transfer Scheme is in full force and effect, and the Bonds and any
guarantees given by any person in respect of CT Finance's obligations
under the Bonds are binding obligations.
(P) LICENCES, ETC.: All licences, consents and authorisations necessary
for the Borrower to conduct the Transmission Business, and for the
members of the Borrower's Group to conduct the other material
businesses operated by the Borrower's Group (taken as a whole), are in
full force and effect.
37
(Q) BORROWINGS: No member of the Borrower's Group has any Indebtedness
for Borrowed Money, or has issued any guarantees, indemnities or other
similar assurances, except as permitted under Clause 19.1(K) or as
agreed by the Agent (acting on the instructions of an Instructing
Group).
(R) TRANSMISSION AGREEMENT REPRESENTATIONS: The representations given by
the Borrower in the Transmission Agreement are true in all material
respects as at the time they are made.
(S) NO PREVIOUS TRADING: Neither the Borrower nor the Parent has traded
prior to (in the case of the Borrower) the date the Transfer Scheme
takes effect and (in the case of the Parent) the date of the Share
Sale Agreement. At the Completion Date:
(i) neither of them has any liabilities or commitments other than
those arising in connection with the Transaction Documents and
(in the case of the Borrower) the Transmission Business; and
(ii) neither of them owns any assets other than those arising or
transferred under the Transaction Documents.
(T) EFFECT OF TRANSACTION DOCUMENTS: Following the completion of the
Share Sale Agreement on the Completion Date the Borrower:
(i) will own or lease, free of all Security except as permitted by
Clause 19.1(C), the assets transferred by the BBC under the
Transfer Scheme;
(ii) these assets will enable it to conduct the Transmission
Business substantially as conducted prior to the Completion
Date and to perform its obligations under the Transmission
Agreement and the NTL Site Sharing Agreement; and
(iii) the Transaction Documents provide for amounts and timings of
payments which, taken as a whole, are consistent with the
assumptions and basis of the Business Plan and Financial Model.
(U) INFORMATION MEMORANDUM: The information incorporated in the
Information Memorandum is true and correct in all material respects.
No material information has been omitted and the financial projections
contained in the Information Memorandum have been prepared on a
reasonable basis using reasonable assumptions. This representation is
given as at the date of the Information Memorandum or, if it is not
dated, the date it is issued to syndicate banks (and not as at the
date of this Agreement).
The Parent confirms that the following is true:
(V) BUSINESS PLAN AND FINANCIAL MODEL: The Business Plan and Financial
Model have been prepared on a reasonable basis using reasonable
assumptions and the Parent does not have any reason to believe that
they contain a misstatement material in the context of this Agreement.
38
16.2 REPETITION
All of the representations in Clause 16.1 except those in paragraphs (S),
(T), (U) and (V) will be deemed repeated on the making of each Advance.
This repetition will be with reference to the facts on that day.
16.3 SURVIVAL OF REPRESENTATIONS
Each of the representations made under this Agreement shall survive the
making of each Advance (but are only repeated to the extent referred to in
Clause 16.2).
16.4 LENDER REPRESENTATIONS
Each Lender represents that each of the following is true:
(A) In respect of a payment of interest to that Lender, that Lender was,
at the date the principal amount on which that interest accrued was
advanced, a bank for the purposes of section 349(3) of the Income and
Corporation Taxes Xxx 0000.
(B) In respect of a payment of interest to that Lender, the person
beneficially entitled to that payment of interest at the time it is
paid is within the charge to United Kingdom corporation tax in respect
of that interest.
(C) That Lender is a bank for the purposes of section 349(3) of the Income
and Corporation Taxes Xxx 0000.
The representations in this sub-clause do not apply where the
representations would be untrue as a result of a change in law or Inland
Revenue concession or a change in the interpretation or application of law
or Inland Revenue concession.
17. INFORMATION COVENANTS
17.1 PERIODIC REPORTS
Each of the Borrower and the Parent agrees to deliver each of the following
to the Agent as soon as they become available and, in any event, by the
latest date indicated:
DOCUMENT/INFORMATION LATEST DATE
------------------- -----------
(a) Annual audited accounts of each 90 days (or, in the case of
Company including profit and the financial year ending 31
loss account, balance sheet and December 1997, 120 days)
cash flow statement after the end of that
financial year
39
DOCUMENT/INFORMATION LATEST DATE
-------------------- -----------
(b) Annual audited consolidated accounts of the 90 days (or, in the case of
Borrower's Group and of the Group, including the financial year ending 31
profit and loss account, balance sheet and cash December 1997, 120
flow statement days) after the end of that
financial year
(c) Quarterly unaudited management accounts of 45 days after the end of
each Company certified to be correct by the each quarter of its financial
Borrower's senior financial officer, including year
profit and loss account, balance sheet, cash flow
statement and statement of capital expenditure
(d) Quarterly consolidated unaudited management 45 days after the end of
accounts of the Borrower's Group and of the each quarter of its financial
Group certified to be correct by the Borrower's year
senior financial officer, including profit and loss
account, balance sheet, cash flow statement and
statement of capital expenditure
(e) Monthly management accounts of each 30 days after the end of
Company certified to be correct by the each calendar month
Borrower's senior financial officer, including
profit and loss account, balance sheet, cash flow
statement and statement of capital expenditure
(f) Monthly consolidated management accounts of 30 days after the end of
the Borrower's Group and of the Group certified each calendar month
to be correct by the Borrower's senior financial
officer, including profit and loss account, balance
sheet, cash flow statement and statement of
capital expenditure (distinguishing between capital
expenditure which is financed from operating
income and capital expenditure which is funded
from new equity or borrowing)
(g) A certificate, signed by the senior financial At the time of delivery of
officer of the Borrower stating: the Borrower's Group's
quarterly financial
(i) the amount of Financial Indebtedness statements delivered
on the last day of the Quarter under paragraph (d)
(ii) the aggregate of EBITDA for that
Quarter and the preceding one (if any)
40
DOCUMENT/INFORMATION LATEST DATE
-------------------- -----------
(h) Annual budget for the Borrower's Group, 60 days after the start of
including projected profit and loss account, each of its financial years
balance sheet, cash flow statement and statement
of capital expenditure (distinguishing between
capital expenditure which is to be financed from
operating income and capital expenditure which
is to be funded from new equity or borrowing)
(i) Annual budget for the Parent adopted by the 60 days after the start of
Board of Directors of the Parent each of its financial years
(j) A certificate regarding compliance with the At the time of delivery of
financial covenants in Clause 18.2 setting out the each set of the Borrower's
necessary computations. This certificate is to be Group's quarterly financial
signed by a director of the Borrower statements delivered
under paragraph (d)
(k) A certificate regarding: At the time of delivery of
each set of annual
(i) compliance with the financial covenants consolidated financial
in Clause 18.2; and statements for the
Borrower's Group
(ii) the amount of capital expenditure in delivered under paragraph (b)
that financial year (distinguishing
between capital expenditure which is
financed from operating income and
capital expenditure which is funded
from new equity or borrowing)
setting out the necessary computations. This
certificate is to be signed by a director of
the Borrower
(l) A statement signed by the auditors of the At the time of delivery of
Borrower regarding compliance with the financial each set of annual
covenants in Clause 18.2 consolidated financial
statements for the
Borrower's Group
delivered under
paragraph (b)
(m) The Completion Balance Sheet (as defined in the 5 Business Days after it is
Share Sale Agreement) agreed or becomes effective
41
DOCUMENT/INFORMATION LATEST DATE
-------------------- -----------
(n) A certificate of Net Disposal Proceeds, setting 5 Business Days after the
out the necessary computations. This certificate date of any disposal which
is to be signed by the senior financial officer results in a requirement to
of the Borrower make a Disposal Prepayment
under Clause 9.2(B)
(o) A certificate of acquisition price, setting out the 5 Business Days after the
necessary computations. This certificate is to be date of any acquisition of a
signed by the senior financial officer of the business as described in
Borrower Clause 19.1(L)
(p) Details of any treasury transaction as required by As soon as reasonably
Clause 19.1(O) practicable following the
entering into of the
transaction
In each case the Borrower and the Parent agree to deliver the number of
copies requested by the Agent.
The obligations to deliver the documents described in paragraphs (c), (d),
(e), (f) and (i) above, insofar as they relate to the Parent or the Group
(other than the Borrower's Group), do not apply if, in the period to which
those documents relate (or would relate if they existed), (i) all of the
Parent's Subsidiaries are members of the Borrower's Group and (ii) the
Parent has no business other than that of holding shares in the Borrower.
17.2 GAAP
The Borrower confirms and agrees that all financial statements to which
Clause 17.1 applies will be prepared in accordance with applicable law and
Generally Accepted Accounting Principles consistently applied except to
the extent that the accompanying notes provide a description of a
different treatment.
17.3 REQUESTS
The Agent may request any Company to deliver to the Agent information
about it or its assets, business or financial condition or any other
matter. Each Company agrees to deliver promptly to the Agent the
information reasonably requested. No Company will be obliged to deliver
any information under this sub-clause if that delivery is prohibited by
law or by direction of H.M. Government.
17.4 TERMINATION EVENTS AND OTHER EVENTS
The Borrower agrees to notify the Agent promptly of:
(A) the occurrence of a Termination Event or Potential Termination Event
upon becoming aware of such occurrence;
(B) any events or developments that would be reasonably likely to result
in the termination of, or any material amendment to, the Transmission
42
Agreement or any licence, consent or authorisation required for the
purposes of the Transmission Business, upon becoming aware of the
same;
(C) any proposal to amend or waive any Material Contract (save for minor
amendments); and
(D) the occurrence of any event of default or put event under the Bonds
upon becoming aware of such occurrence.
17.5 OTHER INFORMATION
Each of the Parent and the Borrower agrees to deliver to the Agent (to the
extent not already delivered under this Agreement):
(A) all information provided to any shareholder in the Parent in its
capacity as such; and
(B) all information provided to any holder of the Bonds in its capacity
as such.
17.6 CHANGE OF ACCOUNTING TREATMENT
(A) This sub-clause applies if there is a change in the manner in which
the financial statements of a Company or of the Group are prepared or
in the accounting principles or standards applied in the preparation
of those accounts.
(B) If this sub-clause applies or will apply the Borrower agrees to
notify the Agent. The Borrower and the Agent will then negotiate in
good faith with a view to making any necessary changes to this
Agreement to reflect the change described in paragraph (A). Neither
party is bound to continue the negotiations after the date 30 days
after the Agent receives the Borrower's notice.
(C) If this sub-clause applies, and agreement is not reached under
paragraph (B) above, the Borrower agrees to deliver, with each set of
financial statements delivered to the Agent, a reconciliation
(audited in the case of audited financial statements). This
reconciliation will show the amounts utilised for the purposes of
computations required for the purposes of this Agreement as they
would have been if no change had occurred. The amounts in this
reconciliation will then be used for computations required for the
purposes of this Agreement instead of the corresponding amounts in
the financial statements delivered under Clause 17.1.
18. FINANCIAL COVENANTS
18.1 DEFINITIONS
(A) In this Agreement:
"BORROWER'S GROUP" means:
43
(i) if the Borrower has no Subsidiaries, the Borrower; and
(ii) if the Borrower has Subsidiaries, the Borrower and its
Subsidiaries taken as a whole.
"DEBT COVERAGE" for a period means the ratio of Financial
Indebtedness at the end of that period to EBITDA for that period. For
this purpose, amounts outstanding under the Revolving Facility drawn
as Advances to finance the Borrower's working capital requirements
(up to an aggregate maximum of (Pounds)10,000,000) will, to the
extent otherwise included, be deducted from Financial Indebtedness.
"EBITDA" for any period means the profit of the Borrower's Group for
that period:
(i) before taking into account all Extraordinary Items (whether
positive or negative) but after taking into account all
Exceptional Items (whether positive or negative);
(ii) before deducting tax, including advance corporation tax,
mainstream corporation tax and their equivalents in any
relevant jurisdiction;
(iii) before deducting amortisation of any goodwill arising from the
acquisition of the Transmission Business and the amortisation
of any acquisition costs (to the extent these are
capitalised);
(iv) before deducting any costs incurred in relation to the
acquisition of the Transmission Business (to the extent that
these are expensed);
(v) before taking into account Interest accrued, whether or not
paid, deferred or capitalised during that period;
(vi) after deducting any gain, and adding back any loss, relative
to book value arising on the sale, lease or other disposal of
any asset during that period and after deducting any gain, and
adding back any loss, arising on revaluation of any asset
during that period, in each case to the extent that it would
otherwise be taken into account;
(vii) before deducting depreciation;
(viii) before deducting any Exceptional Items in relation to
provisions made for any reorganisation resulting from the
acquisition of the Transmission Business and made within 18
months of the Completion Date.
"EXCEPTIONAL ITEMS" has the meaning given to it in FRS 3 issued by
the Accounting Standards Board, but excluding any Extraordinary
Items.
"EXCESS CASH FLOW" for any financial year (the "CURRENT FINANCIAL
YEAR" means EBITDA for the current financial year:
(i) plus all non-cash charges deducted in establishing EBITDA for
the current financial year, unless those non-cash charges are
provisions for cash expenditure due to be made in the next
financial year;
44
(ii) plus any non-cash charges deducted in establishing EBITDA for
the previous financial year which were provisions for cash
expenditure in the current financial year, but where that cash
expenditure was not made in the current financial year;
(iii) plus the amount of any tax rebate or credit in respect of any
advance corporation tax, mainstream corporation tax or
withholding tax or their equivalents in any relevant
jurisdiction actually received in cash by any member of the
Borrower's Group during the current financial year;
(iv) minus the Net Disposal Proceeds received during the current
financial year to the extent applied in (or reserved for)
prepayment of the Loan pursuant to Clause 9.2;
(v) minus Net Cash Interest for the current financial year;
(vi) minus all advance corporation tax, mainstream corporation tax
and withholding tax or their equivalent in any relevant
jurisdiction actually paid or falling due for payment during
the current financial year (but excluding any amount paid in
the current financial year which was included in the Excess
Cash Flow computation for a previous financial year because it
fell due in that previous financial year);
(vii) minus the aggregate principal amount of Indebtedness for
Borrowed Money (other than of a revolving nature) falling due
for repayment in the current financial year;
(viii) minus all capital expenditure to the extent financed from
operating income and not funded from new equity or borrowing.
"EXTRAORDINARY ITEMS" has the meaning given to it in FRS 3 issued by
the Accounting Standards Board, and includes those items listed in
paragraph 20 thereof.
"FINANCIAL INDEBTEDNESS" on any date means the amount of Indebtedness
for Borrowed Money of the Borrower's Group on that date. For this
purpose:
(i) any amounts under paragraph (E) of the definition of
"Indebtedness for Borrowed Money" in Clause 1.1 will be
excluded;
(ii) only the principal element of obligations (accounted for as
such in accordance with Generally Accepted Accounting
Principles) in respect of any finance lease to which a member
of the Borrower's Group is a party as lessee will be taken
into account under paragraph (F) of that definition;
(iii) no amount of Interest will be included; and
(iv) no amount outstanding under the Subordinated Loan Agreement
will be included.
"INTEREST" means interest and amounts in the nature of interest.
45
"NET CASH INTEREST" for any period means the Interest due and payable
during that period as an obligation of any member of the Borrower's
Group (whether or not paid or capitalised during or deferred for
payment after such period), but adjusted to take account of:
(i) any amount receivable or payable during that period by any
member of the Borrower's Group (after deducting all taxes
applicable to that Interest receivable) under interest rate or
currency hedging agreements or instruments; and
(ii) any amount constituting Interest receivable during that period
by any member of the Borrower's Group (after deducting all
taxes applicable thereto) in respect of any investment, deposit
or loan,
in either case under which all parties are in compliance with their
material obligations.
"TANGIBLE NET WORTH" means at any time the amount (including share
premium amount) paid up or credited as paid on the issued share
capital of the Borrower:
(i) plus the principal amount outstanding under the Subordinated
Loan Agreement;
(ii) plus the amount standing to the credit, or minus the amount
standing to the debit, of the capital and revenue reserves of
the Borrower;
(iii) plus any amount standing to the credit and minus any amount
standing to the debit of the profit and loss account of the
Borrower;
(iv) minus any amount attributable to goodwill or any other
intangible asset;
(v) minus any amount attributable to a revaluation of assets after
the Completion Date;
(vi) minus, to the extent included in reserves, deferred taxation.
"TOTAL INTEREST PAYABLE" for any period means the Interest due and
payable during that period as an obligation of any member of the
Borrower's Group, adjusted to take account of any amount constituting
Interest receivable or payable during that period by any member of
the Borrower's Group (after deducting all taxes applicable to that
Interest receivable) under interest rate and/or currency hedging
agreements or instruments under which all parties are in compliance
with their material obligations.
(B) (i) All the terms defined in paragraph (A) are to be determined in
accordance with the Generally Accepted Accounting Principles
and are to be computed from:
(a) the financial statements of the Borrower (if the Borrower
has no Subsidiaries); or
(b) the consolidated financial statements of the Borrower and
its Subsidiaries (if the Borrower has Subsidiaries),
46
in each case, delivered pursuant to Clause 17.1.
(ii) For the purposes of Clause 18.1 no item shall be deducted or
credited more than once in any calculation.
18.2 FINANCIAL COVENANTS
The Borrower agrees to ensure that the following financial covenants are
complied with:
(A) The ratio of EBITDA to Total Interest Payable, computed on the basis
of the aggregate EBITDA and aggregate Total Interest Payable for the
last four Quarters (or the number of Quarters ending on or after 31
March 1997 if there have not been four complete Quarters since the
Completion Date) and tested each Quarter, is not to be less than:
Quarter ending Required Ratio
-------------- --------------
31 December 1997 2.00 : 1
31 March 1998 2.00 : 1
30 June 1998 2.00 : 1
30 September 1998 2.00 : 1
31 December 1998 2.25 : 1
31 March 1999 2.25 : 1
30 June 1999 2.50 : 1
30 September 1999 2.50 : 1
31 December 1999 2.50 : 1
31 March 2000 2.50 : 1
30 June 2000 2.50 : 1
30 September 2000 2.50 : 1
31 December 2000 2.50 : 1
31 March 2001 3.00 : 1
30 June 2001 3.00 : 1
30 September 2001 3.00 : 1
31 December 2001 3.00 : 1
31 March 2002 3.50 : 1
(B) Debt Coverage computed on the basis of the aggregate EBITDA for the
last four Quarters (or the number of Quarters ending on or after 31
March 1997 if there have not been four complete Quarters since the
Completion Date, in which case the aggregate EBITDA will be grossed
up to produce an annual figure) and tested each Quarter (using the
47
amount of Financial Indebtedness on the last day of that Quarter), is
not to be more than:
Quarter ending Required Ratio
-------------- --------------
30 September 1997 6.00 : 1
31 December 1997 6.00 : 1
31 March 1998 6.00 : 1
30 June 1998 6.00 : 1
30 September 1998 5.50 : 1
31 December 1998 5.50 : 1
31 March 1999 5.00 : 1
30 June 1999 5.00 : 1
30 September 1999 4.50 : 1
31 December 1999 4.50 : 1
31 March 2000 4.50 : 1
30 June 2000 4.50 : 1
30 September 2000 4.00 : 1
31 December 2000 4.00 : 1
31 March 2001 3.50 : 1
30 June 2001 3.50 : 1
30 September 2001 3.50 : 1
31 December 2001 3.50 : 1
31 March 2002 3.50 : 1
(C) Tangible Net Worth tested at the end of each Quarter is not to be less
than:
Quarter ending Required amount
-------------- ---------------
(Pounds)
--------
31 December 1997 46,000,000
31 March 1998 46,000,000
30 June 1998 46,000,000
30 September 1998 46,000,000
48
Quarter ending Required amount
-------------- ---------------
(Pounds)
--------
31 December 1998 47,500,000
31 March 1999 47,500,000
30 June 1999 47,500,000
30 September 1999 47,500,000
31 December 1999 50,000,000
31 March 2000 50,000,000
30 June 2000 50,000,000
30 September 2000 50,000,000
31 December 2000 55,000,000
31 March 2001 55,000,000
30 June 2001 55,000,000
30 September 2001 55,000,000
31 December 2001 60,000,000
31 March 2002 60,000,000
19. GENERAL COVENANTS
19.1 COVENANTS
Each Company (or, if the relevant paragraph so provides, the Borrower)
agrees that, unless otherwise agreed by the Agent (acting on the
instructions of an Instructing Group):
(A) RANKING OF OBLIGATIONS: It will ensure that its obligations under
this Agreement are at all times secured by the Charges to which it is
a party.
(B) COMPLIANCE: It will exercise its rights and perform its obligations
under the Financing Documents without contravention of applicable
laws. If approvals are required to do this it will obtain and maintain
them and will comply with their terms. It will also make any necessary
filings in respect of the Financing Documents unless these are
required to be, or are, made by another person.
(C) NEGATIVE PLEDGE: It will not create or allow to exist any Security
over any of its assets. This prohibition does not, however, apply to
the following:
(i) Security created by the Charges.
(ii) Liens or rights of set-off arising in the ordinary course of
trading or by operation of law.
49
(iii) Title retention or hire purchase arrangements in respect of
goods. These arrangements must arise in the ordinary course of
trading and on customary terms.
The exceptions in sub-paragraphs (ii) and (iii) do not permit any
Security to be created over the Borrower's rights under the
Transmission Agreement. This paragraph applies to the Parent to the
extent only that it relates to the shares which the Parent holds in
the Borrower.
(D) DISPOSAL OF ASSETS: It will not dispose of any of its assets. This
does not apply to disposals:
(i) on an arm's length basis;
(ii) of obsolete or unused assets or as waste; or
(iii) between the Borrower and any Guarantor (which is a wholly-owned
member of the Borrower's Group) or between Guarantors (each of
which is a wholly-owned member of the Borrower's Group).
No disposal of any of the Borrower's rights under the Transmission
Agreement may be made by virtue of any of sub-paragraphs (i), (ii) or
(iii). In addition, a disposal is only permitted under sub-paragraphs
(i), (ii) or (iii) if the Borrower will be able to carry on the
Transmission Business substantially as before. For this purpose the
Agent is entitled to rely on a certificate from the Borrower (signed
by a director of the Borrower) to this effect.
For the purposes of this paragraph, the grant of a lease or licence
(other than a lease or licence given as part of a site sharing
arrangement in the ordinary course of business) is treated as a
disposal. Any disposal which would otherwise be permitted under sub-
paragraph (iii) above is not permitted to the extent that each of the
following applies:
(a) the Net Disposal Proceeds of any disposal of that asset by
the acquiror would not, by reason of applicable law, be
capable of being made available to the Borrower for the
purposes of making a Disposal Prepayment which would
otherwise be payable under Clause 9.2 as a result of that
disposal by the acquiror, and
(b) at the time of the original disposal to the acquiror any
Company was aware or should have been aware that the Net
Disposal Proceeds would not be available to the Borrower for
the purpose of making that Disposal Prepayment.
This paragraph does not apply to the Parent, who may dispose of its
assets as it sees fit.
(E) COMPLIANCE WITH LAWS: It will comply with all applicable laws and
regulations, and the terms of all permits, authorisations and
licences. This paragraph includes, amongst other things, compliance
with environmental laws, regulations, permits, authorisations and
licences. If there is a breach of such a permit, authorisation or
licence, but that breach is capable of remedy and the permit,
authorisation or licence
50
has not been terminated or revoked, there will not be a breach of this
paragraph. This paragraph does not apply to the Parent.
(F) INSURANCE: It will maintain insurance relating to its assets and
activities against those risks and at those levels which are
consistent with the insurance maintained by similar businesses. It
also agrees to provide to the Agent evidence of all insurance
arranged. This paragraph does not apply to the Parent.
(G) MAINTENANCE OF REPRESENTATIONS: It will take all steps necessary to
ensure that those representations in Clause 16.1 which are deemed to
be repeated by reason of clause 16.2 remain true and correct when so
deemed to be repeated.
(H) AGREEMENTS WITH RELATED PARTIES: It will ensure that all agreements
between it and any member of the Equity Consortium or any other
shareholder of the Parent or any member of the Group are on an arm's
length basis on commercial terms (other than agreements with the
Borrower or wholly-owned Subsidiaries of the Borrower which have
become Guarantors in accordance with Clause 19.1(W)). This paragraph
does not apply to the Parent.
(I) ENFORCEMENT OF MATERIAL CONTRACTS: It will ensure that all material
rights under all Material Contracts are enforced in accordance with
their terms.
(J) PERFORMANCE OF MATERIAL CONTRACTS: It will perform its obligations
under Material Contracts in all material respects in accordance with
their terms. Defaults under the Transmission Agreement giving rise to
charges of service credits under the Transmission Agreement of less
than (Pounds)500,000 per annum are to be treated as not material.
(K) BORROWINGS: It will not have any Indebtedness for Borrowed Money, or
issue any guarantees, indemnities or other similar assurances (each
being for the purposes of this paragraph a "GUARANTEE"), except:
(i) amounts due under: (a) this Agreement; and (b) the Overdraft
Facilities (as long as the amount outstanding does not exceed
(Pounds)2,500,000);
(ii) amounts due under finance leases where the aggregate principal
elements of obligations in respect of those leases does not
exceed (Pounds)2,500,000 in aggregate;
(iii) guarantees of the Borrower's obligations under this Agreement;
(iv) amounts borrowed by the Borrower or a Guarantor (which is a
wholly-owned member of the Borrower's Group) from a Guarantor
(which is a wholly-owned member of the Borrower's Group) or
from the Borrower;
(v) guarantees by the Borrower or a Guarantor (which is wholly-
owned member of the Borrower's Group) of obligations (which are
not prohibited by the terms of the Financing Documents) of a
Guarantor (which is a wholly-owned member of the Borrower's
Group) or of the Borrower;
51
(vi) amounts due in respect of finance provided by suppliers of
goods and services in the ordinary course of business and not
exceeding (Pounds)1,000,000 in aggregate;
(vii) amounts due from the Borrower to the Parent under the
Subordinated Loan Agreement;
(viii) guarantees of CT Finance's obligations under the Bonds. This
applies to guarantees relating to the first issue of bonds
under the Bonds. It does not apply to guarantees relating to
any issue of further or other bonds;
(ix) amounts due from the Borrower to CT Finance under the Inter-
Company Loan Agreement; and
(x) guarantees of other amounts not exceeding (Pounds)500,000 in
aggregate at any one time.
This paragraph does not apply to the Parent, who may have Indebtedness for
Borrowed Money, or issue guarantees, as it sees fit.
(L) ACQUISITIONS: It will not acquire any business or make any investment
in any company. This paragraph does not, however, prohibit any of the
following:
(i) Acquisitions of businesses related to the Transmission Business
to the extent that the aggregate purchase prices do not exceed
an amount equal to the cumulative balance of Excess Cash Flow
since the Completion Date less the aggregate amount of other
acquisitions permitted by virtue of this sub-paragraph (i).
(ii) Acquisitions of businesses related to the Transmission Business
to the extent that the cumulative aggregate of the purchase
prices of these acquisitions over the life of the Revolving
Facility does not exceed (Pounds)20,000,000.
(iii) The acquisition by the Borrower of CT Finance.
This paragraph does not apply to the Parent, who may acquire
businesses or make investments in companies as it sees fit.
(M) INVESTMENTS: It will not invest any surplus cash other than in cash
deposits with UK clearing banks or in cash equivalent investments. For
the purpose of this paragraph "CASH EQUIVALENT INVESTMENTS" means
investments in:
(i) marketable obligations of or guaranteed by any of the United
Kingdom, the Republic of France or the United States of America
or issued by an agency of any thereof and backed by any of the
same;
(ii) certificates of deposit, notes and acceptances issued by banks
which are authorised institutions under the Banking Xxx 0000 or
which are European authorised institutions under the Banking
Coordination (Second Council Directive) Regulations 1992 and
which are entitled to accept deposits in the United Kingdom or
by building societies under the Building Societies Xxx 0000, so
long as such bank or building society's long term senior debt
52
immediately prior to the making of such an investment is rated
not less than A- by Standard & Poor's Corporation or not less
than A3 by Xxxxx'x Investors Services Inc., or (where a bank or
building society is rated by both Standard & Poor's Corporation
and by Xxxxx'x Investors Services Inc.) is rated not less than
A-by Standard & Poor's Corporation and not less than A3 by
Xxxxx'x Investors Services Inc.;
(iii) commercial paper with not more than 187 days to maturity
provided that immediately prior to the making of such an
investment the issuer (or guarantor) of the commercial paper is
rated for short term obligations not less than A1 by Standard &
Poor's Corporation or not less than P1 by Xxxxx'x Investors
Services, Inc., or (where a bank or building society is rated
by both Standard & Poor's Corporation and by Xxxxx'x Investors
Services Inc.) is rated not less than A1 by Standard & Poor's
Corporation and not less than P1 by Xxxxx'x Investors Services
Inc.; or
(iv) any Indebtedness for Borrowed Money issued by persons with a
rating of A+ or higher by Standard & Poor's Corporation or A1
or higher by Xxxxx'x Investors Services Inc.,
provided that any investment made pursuant to sub-paragraphs (ii),
(iii) and (iv) above in or guaranteed by a single bank, building
society or other body corporate in excess of (Pounds)2,500,000 shall
not be permitted.
(N) LOANS: It will not provide loans or other credit, other than:
(i) normal trade credit;
(ii) loans not exceeding (Pounds)500,000 in aggregate; and
(iii) loans to the Borrower or a Guarantor (which is a wholly-owned
member of the Borrower's Group) permitted by Clause 19.1(K).
This paragraph does not apply to the Parent, who may provide loans or
other credit as it sees fit.
(O) TREASURY TRANSACTIONS: It will not enter into any interest rate swap,
cap, ceiling, collar or floor or any swap, future or option in
relation to currency or equity or any commodity contract or option (in
any of these cases, whether over the counter or exchange traded) or
any similar treasury transaction, other than:
(i) spot foreign exchange contracts entered into in the ordinary
course of business (other than for speculative purposes); and
(ii) the hedging of actual or projected foreign exchange exposures
arising in the ordinary course of its business.
Where a Company enters into one of the transactions permitted by sub-
paragraphs (i) or (ii) it will provide details of that transaction to
the Agent as soon as reasonably practicable. No details need be
provided, however, of any transaction involving a notional or actual
principal amount of less than (Pounds)10,000,000.
53
This paragraph does not apply to the Parent, who may enter into
treasury transactions as it sees fit.
The Borrower agrees that, unless otherwise agreed by the Agent (acting on
the instructions of an Instructing Group):
(P) CARRY ON BUSINESS: It will carry on the Transmission Business. This
business will be conducted in accordance with applicable law.
(Q) [deleted]
(R) INTELLECTUAL PROPERTY: It will maintain all intellectual property
rights required for the purposes of the Transmission Business in all
appropriate jurisdictions.
(S) DISTRIBUTION: It will not make any Distribution, and it will not pay
any amounts in respect of interest or principal under the Subordinated
Loan Agreement.
(T) CHANGE OF BUSINESS: It will not change the nature of its business or,
taken as a whole, that of its Subsidiaries.
(U) ACCOUNTING REFERENCE DATE: Its first accounting reference date is or
will be 8 November, 1997. Its next accounting reference date will be
31 December, 1997. Thereafter it will retain 31 December as its
accounting reference date and will make no change to the duration of
any of its financial years.
(V) SERVICE CONTRACT: It will use all reasonable endeavours to enter
within thirty days of the Completion Date into a service contract with
Xxxx Xxxx in a form reasonably satisfactory to the Agent.
(W) SUBSIDIARIES: It will ensure that each of its Subsidiaries becomes a
guarantor of amounts due under this Agreement. When a company needs to
be a Guarantor for the purposes of this paragraph the Borrower agrees
to ensure that:
(i) that company duly executes and delivers an Additional Guarantor
Agreement substantially in the form set out in Schedule 6 (and
for this purpose the Borrower is authorised to execute the
Additional Guarantor Agreement on behalf of each Company);
(ii) that company duly executes a document of a type described in
paragraphs (C) or (D) of the definition of "Charges" in Clause
1.1; and
(iii) there is delivered to the Agent evidence reasonably
satisfactory to the Agent that the Additional Guarantor
Agreement and the document referred to in sub-paragraph (ii)
above are valid and binding on that Company and (in the case of
the document referred to in sub-paragraph (ii) above) creates
first ranking security (subject to Security permitted under
Clause 19.1(C)(ii) and (iii)). This evidence may include items
equivalent to those described in paragraphs 4, 5 and 6 of
Schedule 3.
54
Each of the requirements in sub-paragraphs (i), (ii) and (iii) above
must be satisfied within 30 days of a company becoming a Subsidiary of
the Borrower. The obligations contained in this paragraph do not apply
to CT Finance or to any Subsidiary of the Borrower whose sole business
is to hold and administer pension funds on behalf of the employees of
companies in the Group.
The Parent agrees that, unless otherwise agreed by the Agent (acting on the
instructions of an Instructing Group):
(X) BORROWER AS A SUBSIDIARY: It will ensure that the Borrower remains
its wholly-owned Subsidiary .
(Y) FULLY PAID SHARES: It will ensure that all shares owned by it or by
any member of the Borrower's Group in all its Subsidiaries are charged
to the Agent and that all those shares are fully paid, have no
liability attaching to the holder and, as against the Agent upon
enforcement of the Charges, are free from any restriction on transfer
and any rights of pre-emption. It will also ensure that the share
certificates for all those shares are delivered to the Agent as soon
as reasonably practicable after the relevant company obtains
possession of those share certificates in its name or in the name of
its nominee.
Each of the Borrower and the Parent agrees that, unless otherwise agreed by
the Agent (acting on the instructions of an Instructing Group):
(Z) SUBORDINATED LOAN AGREEMENT: It will not amend or waive any term of
the Subordinated Loan Agreement. This paragraph does not, however,
prohibit an increase in the principal amount available to the Borrower
under the Subordinated Loan Agreement.
The Borrower agrees that, unless otherwise agreed by the Agent (acting on
the instructions of an Instructing Group):
(AA) BONDS: It will procure that:
(i) (save for the correction of typographical inconsistencies or
manifest errors) the terms and conditions of the Bonds are not
amended or waived in any way at the request of CT Finance (or
any other member of the Group); and
(ii) CT Finance's obligations under the Bonds are not defeased to
any other person, and no other person is substituted for or
assumes the obligations of CT Finance in respect of the Bonds.
(BB) CT FINANCE AS SUBSIDIARY: It will ensure that CT Finance remains its
wholly-owned Subsidiary.
(CC) INTER-COMPANY LOAN AGREEMENT: It will procure that:
(i) the terms of Inter-Company Loan Agreement are not amended or
waived in any way;
(ii) (save, in the case of the Borrower, for the Charges) neither
party to the Inter-Company Loan Agreement assigns its rights or
novates its rights and obligations under the Inter-Company Loan
Agreement; and
55
(iii) no payment is made under the Inter-Company Loan Agreement which
is greater, or is made earlier, than is required to be made
under the terms of the Inter-Company Loan Agreement.
19.2 DURATION OF COVENANTS
The obligations under this Clause and Clauses 17 and 18 will cease to have
effect when the Revolving Facility has ceased to be available and there are
no amounts outstanding under the Revolving Facility.
20. TERMINATION EVENTS
20.1 TERMINATION EVENTS
Each of the following is a Termination Event:
(A) NON-PAYMENT: A Company fails to pay an amount due under a Financing
Document unless the reason for the failure is technical or
administrative. In that case there will be a Termination Event only if
that amount is not paid by that or any other Company within 3 Business
Days of the due date.
(B) OTHER DEFAULTS: A Company fails to perform any of its other
obligations under a Financing Document. There will not, however, be a
Termination Event under this paragraph if the failure is capable of
remedy and is cured within 14 days of the Borrower becoming aware of
the failure.
(C) UNTRUE REPRESENTATIONS: Any statement made, or deemed repeated, in a
Financing Document or in any document delivered by a Company under a
Financing Document is untrue or misleading when that statement is
made.
(D) CROSS DEFAULT: Any Indebtedness for Borrowed Money of a Company other
than under a Financing Document:
(i) is not paid or repaid when due for payment or repayment or
within any applicable grace period; or
(ii) is, or becomes capable of being, declared due and payable
before its stated date of payment in accordance with its terms
and by reason of an event of default (however described).
There will not be a Termination Event under this paragraph unless the
aggregate amount of the Indebtedness for Borrowed Money to which (i)
or (ii) applies exceeds (Pounds)500,000.
(E) INSOLVENCY AND REORGANISATION: Any procedure is commenced with a view
to the winding-up or re-organisation of a Company or with a view to
the appointment of an administrator, receiver or trustee in bankruptcy
in relation to a Company or any of its assets. This procedure may be a
court procedure or any other step which under applicable law is a
possible means of achieving any of those results. It will not be a
Termination Event, however, if any procedure is commenced with a view
to the insolvent winding-up of a Company and
56
this procedure is contested in good faith and dismissed within 28 days
of its commencement.
(F) ENFORCEMENT OF SECURITY: The holder of any Security over any of a
Company's assets commences the enforcement of that Security in
accordance with its terms. This will not be a Termination Event if the
aggregate amount secured by the Security is (Pounds)100,000 or less.
(G) ATTACHMENT OR DISTRESS: Any assets of a Company are subject to
attachment, sequestration, execution or any similar process in respect
of Indebtedness for Borrowed Money of more than (Pounds)100,000.
(H) INABILITY TO PAY DEBTS: A Company:
(i) is unable to pay its debts as they fall due within the meaning
of section 123(1) of the Insolvency Xxx 0000 unless, in the
case of section 123(1)(a) only, a statutory notice has been
withdrawn, stayed or dismissed within 21 days;
(ii) admits its inability to pay its debts as and when they fall due
or seeks a composition or arrangement with its creditors or any
class of them; or
(iii) suspends payments of its debts as they fall due,
or the value of the assets of a Company is less than the amount of its
liabilities, taking into account its contingent and prospective
liabilities at their valued amounts, calculated in accordance with
Generally Accepted Accounting Principles.
(I) INSOLVENCY EQUIVALENCE: Anything analogous to any of the events
described in paragraphs (E) to (H) (inclusive) occurs in any relevant
jurisdiction.
(J) UNLAWFULNESS OR REPUDIATION: It is unlawful for a Company to comply
with, or it repudiates, its material obligations under a Transaction
Document.
(K) CESSATION OF BUSINESS: The Borrower ceases or threatens to cease to
carry on a material part of the Transmission Business, or any member
of the Borrower's Group ceases or threatens to cease to carry on any
other material business operated by the Borrower's Group (taken as a
whole).
(L) CHANGE OF CONTROL: Any event or circumstance described in Clause
13.5.1 of the Transmission Agreement occurs and subsists as a result
of which the BBC is entitled to terminate the Transmission Agreement
(in the agreed form and whether or not it exercises its rights to
terminate) by virtue of Clause 13.5.1 of the Transmission Agreement.
For the purposes of this paragraph (save where sub-paragraph (iii)
applies) any amendment made to the Transmission Agreement or the
Commitment Agreement (as defined in the Share Sale Agreement), and any
waiver or consent granted by the BBC, will be disregarded. However,
there will not be a Termination Event under this paragraph in any of
the following cases:
57
(i) If all the Lenders have given their prior written consent.
(ii) If the event or circumstance is a flotation of shares as
described in Clause 9.3(B).
(iii) If:
(a) the BBC is not entitled to terminate the Transmission
Agreement by virtue of that event or circumstance because
the Transmission Agreement or the Commitment Agreement (as
defined in the Share Sale Agreement) has been amended from
the agreed form or the BBC has granted a waiver or
consent; an d
(b) the Agent (acting on the instructions of an Instructing
Group) has given its prior written consent.
(M) MATERIAL ADVERSE CHANGE: Either of the following occurs:-
(i) There is a change in financial condition of the Borrower or
(taken as a whole) the Parent and the Borrower's Group having a
material adverse impact on the Borrower's or (taken as a whole)
the Guarantors' ability to perform its or their payment
obligations under the Financing Documents since the last date
as at which each of the covenants in Clause 18.2 were measured.
The assessment of whether the change in financial condition is
material will be measured against the covenants tested on that
date.
(ii) An event or circumstance occurs and is continuing affecting the
business or operations of the Borrower and (taken as a whole)
the Parent and the Borrower's Group and having a material
adverse impact on the Borrower's or (taken as a whole) the
Guarantors' ability to perform its or their payment obligations
under the Financing Documents. The assessment of whether there
has been a material adverse impact will be measured against the
business or operations of the Borrower and (taken as a whole)
the Parent and the Borrower's Group on the Completion Date
after the acquisition of the Transmission Business.
(N) LITIGATION: A Company is involved in litigation which is reasonably
likely to have an unfavourable outcome materially adversely affecting
the Borrower's or, taken as a whole, the Guarantors' ability to
perform its or their obligations under the Financing Documents or, in
the case of the Borrower, to perform its material obligations under
the Transmission Agreement.
(O) FAILURE OF PURPOSE: The Borrower cannot use the proceeds of the
Revolving Facility for the purposes described in Clause 22.
(P) ILLEGALITY OR TERMINATION OF THE TRANSMISSION AGREEMENT: The
Transmission Agreement is terminated or ceases to be in full force and
effect or it becomes illegal for the BBC to perform its obligations
under the Transmission Agreement.
58
(Q) DEFAULT BY THE BBC: The BBC is due to pay, but has not paid, amounts
under the Transmission Agreement in an aggregate amount exceeding the
default limit applying at that time. The "DEFAULT LIMIT" is initially
(Pounds)4,000,000 outstanding any one time and will be adjusted in
accordance with Schedule 2 of the Transmission Agreement. The Agent
may rely on a certificate of the Borrower as to the prevailing default
limit.
(R) FORCE MAJEURE: Any event or circumstances constituting a "Force
Majeure" (as defined in the Transmission Agreement) occurs. This will
only be a Termination Event if it has a material adverse impact on the
ability of the Borrower or, taken as a whole, the Guarantors to
perform its or their payment obligations under the Financing
Documents.
(S) BONDS: The Bonds are redeemed or repurchased in whole or in part at
any time prior to their final maturity for any reason. This does not
apply to redemptions or repurchases of part where that part, when
aggregated with any other such redemptions or repurchases, amounts to
not more than (Pounds)500,000 in principal amount.
20.2 CONSEQUENCES OF A TERMINATION EVENT
If a Termination Event occurs and is continuing the Agent may by notice to
the Borrower:
(A) cancel the Revolving Facility; or
(B) demand immediate repayment of the Loan,
or both. The Agent agrees to deliver a notice under this sub-clause if an
Instructing Group instructs the Agent to do so. In the case of cancellation
the Lenders will be under no further obligation to make an Advance. In the
case of a demand for repayment the Borrower agrees to pay the Lenders in
accordance with the notice.
20.3 INDEMNITY
If there is a Termination Event the Borrower agrees to reimburse the Agent
and each Lender for the losses and expenses the Agent or that Lender
incurs, or will incur, as a result. Clause 10.7 also applies.
20.4 CURRENCY INDEMNITY
This sub-clause applies where a payment due by a Company under or in
connection with a Financing Document is made in a currency other than
pounds. To the extent that the amount received, when converted into pounds,
is less than the amount due the Borrower agrees to reimburse the person
entitled to the payment for the difference. For the purposes of the
computation of this amount that person will apply to the amount received a
rate of exchange prevailing on the date of receipt. If, however, that
person is unable to use the amount received to buy pounds on the date of
receipt, the rate of exchange prevailing on the first date on which that
person could buy pounds will be used instead. The obligation in this sub-
clause is a separate and independent obligation.
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PART VII : MISCELLANEOUS
21. THE AGENT AND THE CO-ARRANGERS
21.1 APPOINTMENT
The Agent is appointed as an agent by each Lender. The Agent is not acting
as agent of any Company under this Agreement except for the limited purpose
of signing Substitution Certificates in accordance with Clause 24.3.
21.2 AUTHORITY
The Agent is authorised to exercise the rights, powers, discretions and
duties which are specified by the Financing Documents. The Agent may also
act in a manner reasonably incidental to these matters.
21.3 DUTIES
In addition to the obligations of the Agent set out elsewhere in the
Financing Documents the Agent agrees as follows:
(A) NOTICES: The Agent will as soon as reasonably practicable notify each
Lender of the contents of each notice received from a Company under
the terms of a Financing Document. If the notice only affects
particular Lenders the Agent may elect to notify only those Lenders,
in which case it will do so as soon as reasonably practicable.
(B) OTHER DOCUMENTS: When a Company delivers to the Agent any other
document required to be delivered under a Financing Document the Agent
will as soon as reasonably practicable provide a copy to each Lender.
The Borrower agrees to reimburse the Agent for the costs of preparing
any copies required for this purpose.
(C) TERMINATION EVENTS: The Agent will notify each Lender of any
Termination Event or Potential Termination Event. This obligation
will not arise, however, until the Agent receives express notice with
reasonable supporting evidence of the Termination Event or Potential
Termination Event. Until this time the Agent is entitled to assume
that there is no Termination Event or Potential Termination Event.
The Agent is not required to make inquiries. Information referred to
in Clause 2111 does not have to be disclosed under this sub-clause.
(D) INFORMATION: The Agent will request the Borrower to deliver to the
Agent under Clause 173 any information reasonably requested by a
Lender.
21.4 POWERS
In addition to the powers of the Agent set out elsewhere in the Financing
Documents the Agent has the following powers:
(A) PROFESSIONAL ADVISERS: The Agent may instruct professional advisers
to provide advice in connection with the Revolving Facility.
60
(B) AUTHORITY FROM INSTRUCTING GROUP: The Agent may take any action which
is not inconsistent with the Financing Documents and which is
authorised by an Instructing Group.
(C) VIEWS OF INSTRUCTING GROUP: In exercising any of its rights, powers
or discretions the Agent may seek the views of an Instructing Group.
If it exercises those rights, powers or discretions in accordance with
those views the Agent will incur no liability.
(D) PROCEEDINGS: The Agent may institute legal proceedings against a
Company in the name of those Lenders which authorise it to take those
proceedings.
(E) COMPLIANCE WITH LAW: The Agent may take any action necessary for it
to comply with applicable laws.
(F) OVERDRAFTS: The Agent may sign any Overdraft Bank Agreement and the
Subordinated Loan Agreement.
The Agent is not required to exercise any of these powers and will incur no
liability if it fails to do so. In the context of legal proceedings the
Agent may decline to take any step until it has received indemnities or
security satisfactory to it.
21.5 RELIANCE
The Agent is entitled to rely upon each of the following:
(A) Advice received from professional advisers.
(B) A certificate of fact received from a Company and signed by an
Authorised Person.
(C) Any communication or document believed by the Agent to be genuine.
The Agent will not be liable for any of the consequences of relying on
these items.
21.6 EXTENT OF AGENT'S DUTIES
(A) NO OTHER DUTIES: The Agent has no obligations or duties other than
those expressly set out in the Financing Documents and the Overdraft
Bank Agreements.
(B) ILLEGALITY AND LIABILITY: The Agent is not obliged to do anything
which is illegal or which may expose it to liability to any person.
(C) NOT TRUSTEE: The Agent is not acting as a trustee for any purpose in
connection with this Agreement, except for its role described in
Clause 21.13, 21.14 and 21.15, and as described in the Overdraft Bank
Agreements.
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21.7 RESPONSIBILITY OF THE LENDERS
Each Lender is responsible for its own decision to become involved in the
Revolving Facility and its decision to take or not take action under the
Revolving Facility. It should make its own credit appraisal of each
Company and the terms of the Revolving Facility. Neither the Agent nor
either of the Co-arrangers makes any representation that any information
provided to a Lender before or after the date of this Agreement is true.
Accordingly each Lender should take whatever action it believes is
necessary to verify that information. In addition neither the Agent nor
either Co-arranger is responsible for the legality, validity or adequacy
of any Financing Document or the efficacy of the Security under the
Charges. Each Lender will satisfy itself on these issues.
21.8 LIMITATION OF LIABILITY
(A) AGENT: The Agent will not be liable to the Lenders for any action or
non-action under or in connection with the Financing Documents unless
caused by its gross negligence or willful misconduct.
(B) DIRECTORS, EMPLOYEES AND AGENTS: No director, employee or agent of
the Agent will be liable to a Lender or a Company in relation to the
Financing Documents. Each Lender and each Company agrees not to seek
to impose this liability upon them.
21.9 BUSINESS OF THE AGENT
Despite its role as agent of the Lenders the Agent may:
(A) participate as a Lender in the Revolving Facility or as an Overdraft
Bank,
(B) carry on all types of business with any Company, and
(C) act as agent for other groups of lenders to any Company or other
borrowers.
21.10 INDEMNITY
Each Lender agrees to reimburse the Agent for all losses and expenses
incurred by the Agent as a result of its appointment as Agent or arising
from its activities as Agent. These losses and expenses will take into
account amounts reimbursed to the Agent by the Borrower. The liability of
each Lender under this sub-clause will be limited to the share of the
total losses and expenses which corresponds to that Lender's share of the
Available Revolving Facility Commitments or, if an Advance has been made
and is outstanding, the Loan. If the losses or expenses are attributable
to an activity of the Agent which relates to only some of the Lenders the
Agent may instead notify the Lenders of a different sharing arrangement.
In this case the limit of liability of a Lender under this sub-clause
will be determined by the Agent. The Lenders are not liable for losses
and expenses arising from the gross negligence or willful misconduct of
the Agent.
21.11 CONFIDENTIAL INFORMATION
The Agent is not required to disclose to the Lenders any information:
62
(A) which is not received by it in its capacity as Agent, or
(B) which it receives, with its consent, on a confidential basis.
21.12 RESIGNATION AND REMOVAL
The Agent may resign by giving notice to the Borrower and the Lenders.
The Agent may be removed by notice given by an Instructing Group to the
Agent and the Borrower. In either event the following apply:
(A) APPOINTMENT BY INSTRUCTING GROUP: An Instructing Group may appoint a
new Agent after consultation with the Borrower.
(B) APPOINTMENT BY THE RESIGNING AGENT: If the Agent has resigned and the
Instructing Group has not appointed a new Agent within 30 days after
the resigning Agent's notice, the resigning Agent may appoint a new
Agent after consultation with the Borrower.
(C) MODE OF APPOINTMENT: A new Agent will be appointed by notice to the
Borrower and the Lenders. A new Agent cannot be appointed without its
consent.
(D) TIMING OF APPOINTMENT: If the Agent has resigned, the new Agent will
become Agent at a time agreed between the new Agent and the resigning
Agent. If no time is agreed the new Agent will become Agent 10
Business Days after the notice referred to in paragraph ((C)). Any
resignation or removal of the Agent will not be effective until a new
Agent has been appointed and accepted its appointment.
(E) EFFECT OF APPOINTMENT: Upon a new Agent becoming Agent the
resigning/removed Agent will cease to be Agent. Accordingly it will
be discharged from its obligations and duties as Agent. It will,
however, continue to be able to rely on the terms of this Clause in
respect of all matters relating to the period of its appointment. The
new Agent will assume the role of Agent. It will have all the rights,
powers, discretions and duties of the Agent provided for in this
Agreement.
(F) TRANSITION: The resigning/removed Agent and the new Agent agree to
co-operate to ensure an orderly transition. The resigning/removed
Agent agrees to deliver or make available to the new Agent all
records, files and information held by it as Agent. This obligation
will not require the resigning/removed Agent to disclose any
confidential information. the resigning/removed Agent also agrees to
transfer the benefit of the Charges, and all rights relating to the
Charges, to the new Agent. The Borrower agrees to co-operate, to the
extent reasonably necessary, with this transfer. If required by the
new Agent the Borrower agrees to execute new Charges in favour of the
new Agent on identical terms as the then existing Charges.
21.13 OBLIGATION TO PAY TO THE AGENT
Each Company agrees to pay to the Agent on demand each amount due and
payable by that Company to a Lender under any of the Financing Documents.
This obligation will be satisfied to the extent that the amount is paid
to the Lender in accordance with Clause 11.2. It does not affect the
rights of the
63
Lender or the obligation of the Company to the Lender. A payment of an
amount under this sub-clause will, however, satisfy that Company's
obligation to pay that amount to the Lender.
21.14 HOLDING AS SECURITY TRUSTEE
The Agent agrees that it holds the benefit of:
(A) Clause 21.13; and
(B) the Charges and all Security arising from the Charges,
as trustee on behalf of:
(i) the Lenders; and
(ii) each Overdraft Bank.
All the Agent's rights and claims arising under the items mentioned in
paragraphs (A) and (B) are vested in it on this basis.
21.15 SECURITY
(A) PERFECTION OF SECURITY AND TITLE: The Agent:
(i) is not liable for any failure, omission or defect in perfecting
the Security constituted by any Charge;
(ii) may accept without enquiry the title to the property over which
Security is intended to be created by any Charge.
(B) CUSTODY: The Agent is not under any obligation to hold any title
deeds, security documents or any other documents in connection with
the property charged by any Charge or to take any steps to protect
or preserve these documents. The Agent may permit a Company to
retain all these documents in its possession or may deposit them
with a nominee or custodian. This paragraph does not apply to
documents held in relation to a legal mortgage over, or over an
interest in, real property or shares.
21.16 THE CO-ARRANGERS
The Co-arrangers have no continuing role in connection with the Revolving
Facility and are not liable in respect of any matter concerning the
Revolving Facility. They are not the agents for any Lender.
22. EVIDENCE AND CERTIFICATES
22.1 EVIDENCE OF DEBT
The Agent will maintain in its books an account showing all liabilities
accrued and payments made in relation to the Financing Documents. Details
of amounts outstanding recorded in this account will be evidence of each
Company's obligations unless there is shown to be an error.
64
22.2 CERTIFICATES
Each certificate delivered under this Agreement must contain reasonable
detail of the matters being certified. Certificates delivered by the Agent
or a Lender will be evidence unless there is shown to be an obvious error.
23. NOTICES
23.1 NATURE OF NOTICES
No notice delivered by a Company under this Agreement may be withdrawn or
revoked. Each notice delivered by a Company must be unconditional. It
must also be signed by an Authorised Person.
23.2 DELIVERY OF NOTICES
A notice under this Agreement will only be effective if it is in writing
and is received. Telexes and faxes are permitted.
23.3 NOTICES THROUGH THE AGENT
Each notice from a Company or a Lender will be delivered to the Agent. The
Agent agrees to pass on the details of notices received by it to the
appropriate recipient as soon as reasonably practicable.
23.4 ADDRESS DETAILS
Notices will be delivered to the address of the intended recipient as set
out on the signature page. A Company or a Lender may change its address
details by notice to the Agent. The Agent may change its address details
by notice to each Company and each Lender.
24. ASSIGNMENT AND NOVATION
24.1 COMPANY
The rights of a Company under this Agreement are personal to it.
Accordingly they are not capable of assignment.
24.2 ASSIGNMENT BY A LENDER
A Lender may assign in whole or in part its rights under this Agreement if
(i) at the same time the proposed assignee assumes the whole or (as the
case may be) the relevant part of the Lender's obligations under this
Agreement to the satisfaction (acting reasonably) of the Agent and the
Borrower and (ii) it obtains the written consent of the Borrower in
advance. The Borrower agrees that it will not unreasonably withhold this
consent. If the Borrower does not reply to a written request for consent
within 10 Business Days it will be treated as having given its consent. No
consent is required where the assignment:
(A) is to another Lender;
(B) is to an affiliate or Subsidiary or Holding Company of the assignor;
65
(C) occurs when there is an outstanding Termination Event; or
(D) is part of the syndication process arranged by the Co-arrangers.
The principal amount to be assigned must equal or exceed the minimum
assignment amount described in Clause 24.7 and following the assignment
each Lender must satisfy the minimum hold requirement described in Clause
24.6. Neither the Agent nor any Lender will be obliged to treat any person
to whom a Lender makes an assignment as an assignee until that person
agrees to pay to the Agent the fee mentioned in Clause 24.3((C)). The
restrictions on minimum assignment amounts and minimum hold requirements
described in this sub-clause do not apply to assignments by a Lender to an
affiliate, Subsidiary or Holding Company of that Lender (as long as they
are not granted in contemplation of that affiliate, Subsidiary or Holding
Company ceasing to be an affiliate, Subsidiary or Holding Company of that
Lender). Any subsequent assignee of that affiliate, Subsidiary or Holding
Company must satisfy the minimum hold requirements of Clause 246. The
restriction on minimum assignment amounts does not apply to assignments by
a Lender to another Lender.
24.3 NOVATION BY A LENDER
A Lender (the "EXISTING LENDER") may be released from its obligations and
surrender its rights under this Agreement to the extent that exactly
corresponding obligations and rights are assumed by another lender (the
"NEW LENDER") in accordance with the following:
(A) The principal amount to be novated must equal or exceed the minimum
novation amount described in Clause 24.7 and following the novation
each Lender must satisfy the minimum hold requirement described in
Clause 24.6. The restrictions on minimum novation amounts and minimum
hold requirements described in this paragraph (A) do not apply to
novations by a Lender to an affiliate, Subsidiary or Holding Company
of that Lender (as long as they are not granted in contemplation of
that affiliate, Subsidiary or Holding Company ceasing to be an
affiliate, Subsidiary or Holding Company of that Lender). Any
subsequent novatee of that affiliate, Subsidiary or Holding Company
must satisfy the minimum hold requirements of Clause 246. The
restriction on minimum novation amounts does not apply to novations by
a Lender to another Lender.
(B) The Existing Lender must obtain the prior written consent of the
Borrower to the proposed novation. The Borrower agrees that it will
not unreasonably withhold this consent. If the Borrower does not reply
to a written request for consent within 10 Business Days it will be
treated as having given its consent. No consent is required where the
novation:
(i) is to another Lender;
(ii) is to an affiliate or Subsidiary or Holding Company of the
assignor;
(iii) occurs when there is an outstanding Termination Event; or
(iv) is part of the syndication process arranged by the Co-arrangers.
66
(C) Once the Borrower's written consent is obtained (or treated as
obtained), the Existing Lender will deliver to the Agent a
Substitution Certificate. This must be signed by both the Existing
Lender and the New Lender and be properly completed. It must have
attached to it the Borrower's consent. Alternatively it must have
attached to it the Existing Lender's request for a consent and a
certificate of an officer of the Existing Lender to the effect that
such request was received by the Borrower and that no reply was
received within 10 Business Days. The Existing Lender will also
arrange for the payment of a processing fee to the Agent. The amount
of this fee is (Pounds)750 (plus any reasonable expenses) unless the
Agent has notified the Lenders of a different amount which has been
agreed with an Instructing Group. No fee is payable where the
novation is part of the syndication process arranged by the Co-
arrangers.
(D) The Agent will sign the Substitution Certificate no later than 5
Business Days after its receipt and the payment of the processing fee.
This signature will be made on behalf of the other Lenders and the
Companies as well as itself. Each Lender and each Company irrevocably
authorises the Agent to sign in this manner.
(E) The Substitution Certificate will take effect on the date it
specifies. On this date:
(i) The Existing Lender is released from its obligations and
surrenders its rights to the extent described in the Certificate.
(ii) The New Lender assumes obligations and rights exactly
corresponding to those released and surrendered by the Existing
Lender.
The Revolving Facility Commitment of the Existing Lender will be
reduced accordingly and the New Lender will assume a Revolving
Facility Commitment of the amount of the corresponding reduction.
24.4 DISCLOSURE OF INFORMATION
A Lender may disclose to an assignee or New Lender, or to a proposed
assignee or New Lender, any information received by the Lender under or in
connection with the Financing Documents, including a copy of each of those
documents. A Lender may not disclose this information to any of these
persons unless that person has executed a confidentiality undertaking
substantially in the form set out in Schedule 7.
24.5 LIMITATION ON CERTAIN OBLIGATIONS OF BORROWER
This sub-clause applies to any novation or assignment by a Lender and any
change of office through which a Lender is acting. If, at the time it is
effected, circumstances exist which would oblige the Borrower to pay to the
New Lender, assignee or Lender under Clause 10 any sum in excess of the sum
(if any) which it would have been obliged to pay to the Existing Lender,
assignor or that Lender under Clause 10 in the absence of that novation,
assignment or change, the Borrower shall not be obliged to pay that excess.
67
24.6 MINIMUM HOLD REQUIREMENT
The minimum hold requirement described in this Clause is as follows. In
respect of each Lender, that Lender's Revolving Facility Commitment or, if
its Revolving Facility Commitment is zero, the amount of that Lender's
participation in the Loan (the "ACTUAL PARTICIPATION") must be at least the
required amount. For this purpose the required amount is determined as
follows:
8,000,000
R=-----------x TAP
64,000,000
where:
R = the required amount in pounds
TAP = the aggregate Actual Participations for all the Lenders
24.7 MINIMUM ASSIGNMENT AMOUNT AND MINIMUM NOVATION AMOUNT
Each of the minimum assignment amount and the minimum novation amount
described in this Clause is determined as follows:
MA = R
-
2
where:
MA = the minimum assignment amount or, as the case may be, the
minimum novation amount
R = the required amount, determined in accordance with Clause 24.6
24.8 NO SUB-PARTICIPATIONS
Each Lender agrees that it will not sub-participate its participation in
the Loan. This prohibition does not apply to sub-participations granted
to:-
(A) an affiliate or Subsidiary or Holding Company of that Lender (as long
as they are not granted in contemplation of that affiliate, Subsidiary
or Holding Company ceasing to be an affiliate, Subsidiary or Holding
Company of that Lender); or
(B) another Lender.
25. WAIVERS, AMENDMENTS AND RELEASES OF SECURITY
25.1 WRITING REQUIRED
A waiver or amendment of a term of this Agreement will only be effective if
it is in writing.
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25.2 AUTHORITY OF THE AGENT
If authorised by an Instructing Group the Agent may grant waivers and agree
amendments of any Financing Document with any Company. These waivers and
amendments will be granted on behalf of the Lenders and be binding on all
of them, including those which were not part of the Instructing Group.
This sub-clause does not authorise the Agent to grant any waiver or agree
any amendment affecting any of the following:
(A) The identity of any Company.
(B) The amount of the Revolving Facility.
(C) The amount or method of calculation of interest or commitment fee.
(D) The manner, currency or timing of repayment of the Loan or of the
payment of any other amount.
(E) The definition of "Facility Termination Date".
(F) The definition of "Instructing Group".
(G) The obligations of the Lenders.
(H) Any requirement (including the one in this sub-clause) that all the
Lenders or a certain proportion of them consent to a matter or deliver
a notice.
(I) Clauses 3, 13 or 24.1.
(J) Subject to Clause 253, the release of any Security constituted by the
Charges.
Waivers or amendments affecting these matters require the consent of all
Lenders.
25.3 RELEASE OF SECURITY FOR PERMITTED DISPOSALS
The Agent is authorised by the Lenders to effect the release of any
Security constituted by the Charges over any assets which are disposed of
by a Company as permitted by Clause 19.1(D).
25.4 EXPENSES
The Borrower agrees to reimburse the Agent and each Lender for the expenses
they incur as a result of any proposal made by the Borrower to waive or
amend a term of this Agreement or to release any Security.
26. MISCELLANEOUS
26.1 EXERCISE OF RIGHTS
If the Agent or a Lender does not exercise a right or power when it is able
to do so this will not prevent it exercising that right or power. When it
does
69
exercise a right or power it may do so again in the same or a different
manner. The Agent's and the Lenders' rights and remedies under this
Agreement are in addition to any other rights and remedies they may have.
Those other rights and remedies are not affected by this Agreement.
26.2 COUNTERPARTS
There may be several signed copies of this Agreement. There is intended to
be a single Agreement and each signed copy is a counterpart of that
Agreement.
27. LAW
This Agreement is to be governed by and construed in accordance with
English law.
70
SCHEDULE 1:
LENDERS AND COMMITMENTS
LENDER REVOLVING FACILITY
------
COMMITMENT
-------------------
(Pounds)
Credit Suisse First Boston 32,000,000
Xxxxxx Guaranty Trust Company of New 32,000,000
New York
------------------
(Pounds)64,000,000
71
SCHEDULE 2:
COSTS RATE
1. DEFINITIONS
In this Schedule:
"COSTS PERIOD" means a period for which interest is being computed under
this Agreement. If this period is longer than 3 months it will be divided
by the Agent into successive Costs Periods of no longer than 3 months.
"DETERMINATION DAY" means the first day of a Costs Period.
"ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings given to
them for Bank of England purposes.
2. CALCULATION OF THE COSTS RATE
On each Determination Day the Agent will calculate the Costs Rate for the
Costs Period starting on that day as follows:
R = CL + D(L - B) + S(L - I)
------------------------
100 - (C + S)
where:
R is the Costs Rate, expressed as a rate per annum, for that Costs
Period.
C is the percentage of the Agent's Eligible Liabilities which the Agent
is required to maintain as non-interest bearing cash deposits with the
Bank of England.
L is the percentage rate per annum at which sterling deposits are
offered to the Agent by prime banks in the London inter-bank market at
or about 11.00 a.m. on the Determination Day.
D is the percentage of the Agent's Eligible Liabilities which the Agent
is required to maintain as secured deposits with certain financial
institutions. This percentage is to be treated as 5% unless the Agent
reasonably determines that there is evidence that the percentage
should have a different value.
B is the lower of L and the best percentage rate per annum offered to
the Agent in the London Discount Market for callable deposits in
sterling for the Costs Period at or about 11.00 a.m. on the
Determination Date.
S is the percentage of the Agent's Eligible Liabilities which the Agent
is required to maintain as Special Deposits with the Bank of England.
I is the lower of L and the rate of interest, expressed as a percentage
rate per annum, paid by the Bank of England on Special Deposits.
Percentages will be entered in the formula as absolute numbers. The result
of the application of the formula will be rounded upwards to four decimal
places. If the formula produces a negative additional percentage, the
additional percentage will be taken as zero. The calculations made by the
Agent will be conclusive and binding in the absence of obvious error.
72
3. CHANGE OF REQUIREMENTS
The Agent may amend or replace the formula if it ceases to reflect
accurately the costs banks carrying on business in London would incur in
making the Revolving Facility available to the Borrower. An amended or
replacement formula will take effect in accordance with the terms of a
notice given by the Agent to the Borrower.
73
SCHEDULE 3:
CONDITIONS PRECEDENT TO DRAWING ON THE COMPLETION DATE
1. A copy of the Memorandum and Articles of Association of the Borrower in the
agreed form. This copy must be certified by a director or the secretary of
the Borrower to be complete, up-to-date and in full force and effect.
2. A copy of a resolution of the board of directors of the Borrower approving
the Facilities and the acquisition of the Transmission Business,
authorising the signature and delivery of the Financing Documents to which
it is a party and approving the borrowing of the aggregate Available
Commitments. The resolution must also appoint persons to sign notices on
behalf of the Borrower under the Financing Documents to which it is a
party. The copy must be certified by a director or the secretary of the
Borrower to be a true copy of duly passed resolutions each of which is in
full force and effect.
3. Specimen signatures of all persons authorised by the resolutions referred
to in paragraph 2 above. These signatures must be certified by a director
or the secretary of the Borrower to be genuine.
4. A copy of the Memorandum and Articles of Association of the Parent in the
agreed form. This copy must be certified by a director or the secretary of
the Parent to be complete, up-to-date and in full force and effect.
5. A copy of a resolution of the board of directors of the Parent approving
the Guarantee and the acquisition of the Borrower and authorising the
signature and delivery of this Agreement and the Share Sale Agreement. The
copy must be certified by a director or the secretary of the Guarantor to
be a true copy of a duly passed resolution which is in full force and
effect.
6. A legal opinion from Xxxxxxxxx and May, English legal advisers to the
Agent, substantially in the form set out in Schedule 11.
7. Evidence that the Parent has received (in a closing account with the Agent)
not less than (Pounds)102,200,000, representing the net cash proceeds of an
equity subscription made in or to the Parent by the Equity Consortium on
the terms and conditions of the Shareholders Agreement.
8. A certificate of a director of the Borrower to the effect that Completion
(as defined in the Share Sale Agreement) has occurred in accordance with
the Share Sale Agreement and that the share transfers and certificates are
held in escrow in accordance with Clause 5.2.1 of the Share Sale Agreement.
9. A letter in the agreed form from the Group's insurance brokers to the Agent
confirming that the insurance arrangements required by the Transaction
Documents are in place with respect to the Transmission Business and the
Borrower's operations and assets.
10. Property Title Report and Certificates, and the Supplemental Certificate in
respect thereof, from Linklaters & Paines on material properties addressed
to the Agent, in the agreed form.
11. Evidence that the following documents have been signed in agreed form and
copies delivered to the Agent prior to the making of the initial Advance:
(a) Share Sale Agreement;
(b) Shareholders' Agreement;
74
(c) Fee Letters from Co-Arrangers and Agent, each counter-signed by the
Borrower;
(d) Charges specified in sub-paragraphs (A) and (B) of the definition of
"Charges" in Clause 1.1;
(e) Transmission Agreement;
(f) Transfer Scheme;
(g) NTL Site Sharing Agreement;
(h) Contracts for Services;
(i) Commitment Agreement (as defined in the Share Sale Agreement); and
(j) Subordinated Loan Agreement.
12. Share certificates in respect of all the issued share capital in the
Borrower, and blank stock transfer forms duly executed by the Parent in
respect of those share certificates.
13. A copy of the share register of the Borrower showing the Parent as the
registered holder of the entire issued share capital of the Borrower. This
copy must be certified by a director or the secretary of the Borrower to be
complete and up-to-date, as at the Completion Date.
14. Completed Land Registry cover in respect of the properties listed in
Schedule 1 of the debenture described in paragraph (A) of the definition of
"Charges" in Clause 1.1.
15. Undertakings in the agreed form from Castle Tower Holding Corporation and
TeleDiffusion de France International S.A. concerning continued ownership
of their interest in the Parent.
16. The acknowledgement set out in Schedule 3 to the Charge specified in
paragraph (A) of the definition of "Charges" in Clause 1.1, signed on
behalf of the BBC.
17. Service contract relating to Xxxxxx Xxxxx, in a form reasonably
satisfactory to the Agent.
For the purposes of paragraphs 6, 12 and 13 it will be sufficient for the
documents concerned to be held to the order of the Agent subject only to the
release of the share certificates as described in Clause 5.2.1 of the Share Sale
Agreement. This paragraph only applies, however, if the Agent receives evidence
that at or before the time the Term Loan Advances are made the BBC will have
received the portion of the Debt Repayment (as defined in the Share Sale
Agreement) not provided by the Term Loan Advances.
75
SCHEDULE 4:
FORM OF SUBSTITUTION CERTIFICATE
CASTLE TRANSMISSION INTERNATIONAL LTD
(Pounds)64,000,000 REVOLVING LOAN FACILITY UNDER LOAN AGREEMENT DATED
28 FEBRUARY, 1997 (AND AMENDED [ ], 1997)
SUBSTITUTION CERTIFICATE
To: [Name and address of the Agent]
This certificate is delivered to you for the purposes of Clause 24.3 of the Loan
Agreement under which you are currently Agent.
Name of Existing Lender: ____________________________
Name of New Lender: ____________________________
Details of substitution:
[Insert details distinguishing between undrawn commitment and participation in
the Loan and other amounts due under the Revolving Facility]
Date of effect of substitution: ____________________
The substitution described above will take effect in accordance with Clause 24.3
of the Loan Agreement.
The Existing Lender and the New Lender agree as follows:
1. The New Lender is responsible for its own decision to become involved in
the Revolving Facility. It should make its own credit appraisal of the
Companies and the terms of the Revolving Facility. Neither the Existing
Lender nor the Agent makes any representation that any information provided
to the New Lender before or after the date of this certificate is true.
Accordingly the New Lender should take whatever action it believes is
necessary to verify that information. In addition neither the Existing
Lender nor the Agent is responsible for the legality, validity or adequacy
of the Loan Agreement. The New Lender will satisfy itself on these issues.
2. There is no obligation on the Existing Lender to accept any novation or
assignment back of the rights and obligations referred to in this
certificate. The Existing Lender accepts no obligation to indemnify the New
Lender for any losses incurred as a result of a failure by the Borrower or
any Guarantor to perform its obligations or for any other losses. The New
Lender acknowledges this is the case.
The New Lender represents that each of the following is true:
(A) In respect of any payment of interest to be made to it, that New Lender
was, at the date the principal amount on which that interest accrued was
advanced, a bank for the purposes of section 349(3) of the Income and
Corporation Taxes Xxx 0000.
(B) In respect of any payment of interest to be made to it, the person
beneficially entitled to that payment of interest at the time it is paid is
within the charge to United Kingdom corporation tax in respect of that
interest.
76
(C) That Lender is a bank for the purposes of section 349(3) of the Income and
Corporation Taxes Xxx 0000.
The above representations do not apply where the representations would be untrue
as a result of a change in law or Inland Revenue concession or a change in the
interpretation or application of law or Inland Revenue concession.
This certificate is to be governed by and construed in accordance with English
law.
Existing Lender New Lender
--------------- ----------
[Name of Existing Lender] [Name of New Lender]
By: By:
Agent (on behalf of the other Lenders, the Companies and itself)
-----
[Name of Agent]
By:
Date:
----
Notice details for New Lender
(if it is not already a
Lender):
Address:
Fax Number:
Telex Number:
Attention:
77
SCHEDULE 5:
FORM OF NOTICE FOR ADVANCES
To: [Name of Agent]
Attention: [ ]
From: Castle Transmission International Ltd Date: [ ]
Dear Sirs,
(Pounds)64,000,000 REVOLVING LOAN FACILITY UNDER
------------------------------------------------
LOAN AGREEMENT DATED 28 FEBRUARY, 1997
--------------------------------------
(AND AMENDED [ ], 1997)
-------------------------------------------
1. We refer to the above agreement between yourselves as Agent, us as Borrower
and various other parties (the "Agreement"). Terms defined in the Agreement
have the same meaning in this notice.
2. We would like to draw an Advance of (Pounds)[ ] on [ date ].
3. The Interest Period should be [ ] months./*/
4. Please pay the above Advance to account number [ ] with
[ ] in favour of ourselves.
5. We confirm that, today and on the Advance Date:
(a) the representations in Clause 16.1 of the Agreement (other than
paragraphs (S), (T), (U) and (V)) are true, and
(b) there is and will be no outstanding Termination Event or Potential
Termination Event.
6. The purpose of the Advance is [ ].
Yours faithfully,
for and on behalf of
Castle Transmission International Ltd
_______________________
/*/ [Note: any Interest Period commencing on a date within three months of the
First Amendment Date (or, if earlier, the completion of initial syndication
of the Revolving Facility) must be for a period of one month only].
78
SCHEDULE 6:
FORM OF ADDITIONAL GUARANTOR AGREEMENT
ADDITIONAL GUARANTOR AGREEMENT
------------------------------
DATE :
PARTIES
1. [ ], a company incorporated in [ ]
(number [ ]), of [address] (the "NEW GUARANTOR")
2. CASTLE TRANSMISSION INTERNATIONAL LTD, a company incorporated in England
(number 3196207) whose registered office is at Warwick Technology Park,
Gallows Hill, Xxxxxxxxx Xxxx, Xxxxxxx XX00 0XX, on its own behalf and on
behalf of each of the existing Guarantors (each as defined in the Loan
Agreement referred to below)
3. CREDIT SUISSE FIRST BOSTON (the "AGENT"), on its own behalf and on behalf
of each of the Lenders (as defined in the Loan Agreement)
BACKGROUND
A Loan Agreement (the "LOAN AGREEMENT") was made on 28 February, 1997 (and
amended on [ ], 1997) between (1) Castle Transmission
International Ltd as borrower, (2) Castle Transmission Services (Holdings) Ltd
as guarantor, (3) the lenders named in the Loan Agreement, (4) Credit Suisse
First Boston as Agent, (5) Credit Suisse First Boston as arranger and (6) X.X.
Xxxxxx Securities Ltd. as co-arranger. Under the terms of the Loan Agreement the
Lenders agreed to provide to the Borrower a (Pounds)64,000,000 revolving loan
facility.
Under Clause 19.1(W) of the Loan Agreement the New Guarantor needs to become a
guarantor.
The parties agree as follows:
1. INTERPRETATION
Unless a contrary intention is indicated, words and expressions defined in
the Loan Agreement will have the same meanings when used in this Agreement.
References to the Loan Agreement are to that agreement as amended or
supplemented.
2. INCORPORATION OF ADDITIONAL GUARANTOR
With effect from the date of this Agreement the New Guarantor will:
(a) become a party to the Loan Agreement as if it had been an original
signatory as a guarantor; and
(b) become a "Guarantor" within the definition in Clause 1.1 of the Loan
Agreement.
The New Guarantor, each other Company, each Lender and the Agent agrees to
be bound by the Loan Agreement on this basis.
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3. REPRESENTATIONS BY THE NEW GUARANTOR
The New Guarantor confirms in respect of itself that the representations in
Clause 16.1(A) to (L) inclusive of the Loan Agreement if stated at the date
of this Agreement with reference to the New Guarantor and the facts
subsisting on the date of this Agreement, are true.
4. CONSTRUCTION
This Agreement and the Loan Agreement will be read and construed as one
document. References in the Loan Agreement to the Loan Agreement (however
expressed) will be read and construed as references to the Loan Agreement
and this Agreement.
5. NOTICES
The notice details of the New Guarantor for the purpose of Clause 23.4 are
as follows:
[ ]
Fax number: [ ]
Telex number: [ ]
Attention: [ ]
6. LAW
This Agreement is to be governed by and construed in accordance with
English law. The New Guarantor intends to execute this Agreement as a deed
and agrees to execute and deliver it as a deed. [Jurisdiction clause and
appointment of agent for the service of process to be inserted in the case
of a New Guarantor incorporated outside England.]
SIGNATURES
[Name of New Guarantor]
Executed as a deed by the signatures
of a director and the secretary or of
two directors of the company
By: (Director)
By: (Director/Secretary)
Castle Transmission International Ltd
By:
[Name of Agent]
By:
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SCHEDULE 7:
FORM OF CONFIDENTIALITY UNDERTAKING
Castle Transmission International Ltd (the "BORROWER")
(Pounds)64,000,000 REVOLVING LOAN FACILITY UNDER LOAN AGREEMENT DATED
28 FEBRUARY, 1997 (AND AMENDED [ ], 1997)
(THE "FACILITY AGREEMENT")
In connection with your interest in the (Pounds)64,000,000 Revolving Loan
Facility for the Borrower (the "FACILITY") constituted by the Facility
Agreement, you (the "RECIPIENT") may be provided with certain information and
material by ourselves (being an existing lender (the "EXISTING LENDER") under
the Facility.
The Recipient agrees with the Existing Lender (for itself and as trustee for the
benefit of the Borrower) that:-
1. For the purposes of this confidentiality agreement, "CONFIDENTIAL
INFORMATION" means all information disclosed by the Existing Lender (or any
of its agents, representatives or advisers) concerning the Facility, the
Borrower or any member of the group of companies of which the Borrower is a
member. However, it does not include information which (i) is already in
the Recipient's possession at the time of disclosure, or (ii) is at the
time of its disclosure, or which later becomes, part of the public domain.
2. The Recipient will treat the Confidential Information, and the fact that
negotiations are taking place, as confidential. The Recipient agrees to
disclose the Confidential Information only to those of the Recipient's
agents, representatives and advisers who need the Confidential Information
for the purpose of evaluating the Facility. The Confidential Information
shall not be used by any such person for any other purpose.
3. The Recipient will return (or, as regards Confidential Information
disclosed to its agents, representatives and advisers, endeavour to return)
the Confidential Information to the Existing Lender, without retaining any
copies or summaries of it, promptly upon the written request of the
Existing Lender. Alternatively the Recipient may promptly arrange for the
destruction of the Confidential Information and supply written evidence to
the Existing Lender of such destruction. However, to the extent that
Confidential Information has been incorporated (either fully or partially)
into analyses, compilations, studies or other documents prepared by the
Recipient, the Recipient need not return or destroy that information
provided that it treats that information as confidential in accordance with
paragraph 2 above.
4. The Recipient (or any of its agents, representatives or advisers) may be
required to disclose Confidential Information for the purposes of any
judicial, administrative or governmental proceeding. In this case the
Recipient will promptly notify the Existing Lender and the Borrower.
However, if on legal advice the Recipient (or any of its agents,
representatives or advisers) is compelled to make disclosure of
Confidential Information or else stand liable for contempt or other censure
or penalty, it is not under any obligation to delay disclosure (i) in order
to notify the Existing Lender and the Borrower before disclosure, if giving
that notice before disclosure is not practicable, or (ii) once it has
notified the Existing Lender and the Borrower, for any reason whatever.
5. Any questions concerning the Confidential Information must be directed by
the Recipient exclusively to the Existing Lender. The Recipient will not
81
approach the Borrower or any member of its group without prior written
consent of the Existing Lender.
6. The Recipient understands that the Existing Lender (and its agents,
representatives or advisers) is not making any representation or warranty
as to the accuracy or completeness of the Confidential Information, and
neither, save to the extent set out in the Facility Agreement, is the
Borrower or any other member of the group of companies of which the
Borrower is a member. The Existing Lender (for itself and on behalf of its
agents, representatives and advisers and, save to the extent set out in the
Facility Agreement, the Borrower and the other members of the group of
companies of which the Borrower is a member) disclaims any and all
liability arising from the Recipient's use of the Confidential Information.
7. The obligations imposed on the parties under this confidentiality agreement
will terminate on the date two years after the date on which the Recipient
signs this confidentiality agreement below.
8. This confidentiality agreement shall be governed by and construed in
accordance with English law, and the Recipient hereby irrevocably submits
for the benefit of the Existing Lender and the Borrower and the other
members of the group of companies of which the Borrower is a member to the
jurisdiction of the courts of England in connection with any dispute
related to or brought under it.
...............................................
For and on behalf of
[Existing Lender] (on its own
behalf and as trustee for the
benefit of the Borrower and the
other members of the group of
companies of which the
Borrower is a member)
...............................................
For and on behalf of
[Recipient]
Date .......................................
82
SCHEDULE 8
[Deleted]
83
SCHEDULE 9
[Deleted]
84
SCHEDULE 10
[Deleted]
85
SCHEDULE 11:
FORM OF OPINION OF XXXXXXXXX AND MAY
Credit Suisse First Boston,
Five Xxxxx Xxxxxx,
Xxxxxx X00 0XX. 28th February, 1997
for itself as Agent and for the Lenders
(as defined in the Facility Agreement referred to below)
Dear Sirs,
INTRODUCTION
------------
1. This opinion as to English law is addressed to you in connection with:-
(A) the "FACILITY AGREEMENT", being the (Pounds)162,500,000 term and
revolving loan facilities agreement dated 28th February, 1997 and made
between (1) Castle Transmission Services Ltd. (the "Borrower"), (2)
Castle Transmission Services (Holdings) Ltd. (the "Parent"), (3) the
banks and financial institutions listed in Schedule 1 of the Facility
Agreement (the "Lenders"), (4) Credit Suisse First Boston as arranger,
(5) X.X. Xxxxxx Securities Ltd. as co-arranger and (6) Credit Suisse
First Boston as agent;
(B) the "DEBENTURE", being the debenture creating fixed and floating
charges as security in respect of the Facility Agreement dated 28th
February, 1997 and made between (1) the Borrower, (2) the Parent (as
guarantor) and (3) Credit Suisse First Boston (as trustee for the
Lenders); and
(C) the "DEPOSIT CHARGE", being the deposit agreement and charge on cash
deposits dated 28th February, 1997 and made between (1) Credit Suisse
First Boston (as trustee for the Lenders) and (2) the Borrower.
2. We have acted as English legal advisers on your behalf in connection with
the Facility Agreement, the Debenture and the Deposit Charge.
3. We have not made any investigation of, and do not express any opinion on,
the law of any jurisdiction other than England.
4. Terms and expressions defined in the Facility Agreement have the same
meanings when used in this opinion.
DOCUMENTS AND INVESTIGATIONS
----------------------------
5. For the purposes of this opinion, we have examined the following:
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(A) A signed copy of each of the Facility Agreement, the Debenture and the
Deposit Charge.
(B) A copy, certified by the company secretary of the Borrower to be a
true, complete and up-to-date copy, of the Memorandum and Articles of
Association of the Borrower.
(C) A copy, certified by the company secretary of the Parent to be a true,
complete and up-to-date copy, of the Memorandum and Articles of
Association of the Parent
(D) A copy, certified by the company secretary of the Borrower to be a
true, complete and up-to-date copy, of resolutions of a meeting of the
board of directors of the Borrower held on 28th February, 1997.
(E) A copy, certified by the company secretary of the Parent to be a true,
complete and up-to-date copy, of resolutions of a meeting of the board
of directors of the Parent held on 28th February, 1997.
(F) The entries shown on the microfiche (obtained by us from Companies
House, London on 27th February, 1997) of the file of each of the
Borrower and the Parent maintained at Companies House (the
"MICROFICHE").
(G) The certificates (the "SHARE CERTIFICATES") in respect of the shares
(the "SHARES") in the Borrower.
ASSUMPTIONS
-----------
6. We have assumed the following:-
(A) (i) That the information disclosed by the Microfiche and by enquiries
made by us on 27th February, 1997 of the Central Registry of Winding-
up Petitions is accurate and complete, (ii) that the information has
not since been altered or added to and (iii) that the Microfiche and
such enquiries did not fail to disclose any information relevant for
the purposes of this opinion.
(B) That the board minutes examined by us truly record the proceedings
described therein of a duly convened, constituted and conducted
meeting of the board of directors of each of the Borrower and the
Parent and that the resolutions passed and authorisations given
thereat have not subsequently been amended, revoked or superseded.
(C) That the statements made in each of the certificates of the Borrower's
company secretary and the Parent's company secretary referred to in
paragraph 5 above are accurate and complete.
(D) That neither the Borrower nor the Parent has passed any voluntary
winding up resolution, that no petition has been presented or order
made by a court for the winding up, dissolution or administration of
the Borrower or the Parent and that no receiver, administrative
receiver, trustee, administrator or similar officer has been appointed
in relation to the Borrower or the Parent or any of their assets or
revenues.
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(E) That each of the parties (other than the Borrower and the Parent) to
the Facility Agreement, the Debenture and the Deposit Charge has the
capacity, power and authority to enter and perform those agreements.
(F) That all documents submitted to us as copies conform to the originals.
(G) That all signatures are genuine.
(H) That each of the Facility Agreement, the Debenture and the Deposit
Charge has been duly executed and delivered by each of the parties
thereto.
(I) That no law of any jurisdiction outside England would render such
execution or delivery illegal or ineffective and that, in so far as
any obligation under the Facility Agreement, the Debenture and the
Deposit Charge falls to be performed in, or is otherwise subject to,
any jurisdiction other than England, its performance will not be
illegal or ineffective by virtue of the law of that jurisdiction.
(J) That the Shares have been duly transferred by the BBC to the Parent
and that the BBC was immediately before such transfer, and the Parent
is immediately after such transfer, the absolute legal and beneficial
owner of the Shares.
(K) That the Share Certificates are the only certificates in respect of
the Shares and that the Shares referred to in those Share Certificates
represent the whole of the issued share capital of the Borrower.
(L) That the Debenture and Deposit Charge will be delivered for
registration with the Registrar of Companies in accordance with
Chapter 1 of Part XII of the Companies Act as recommended in paragraph
8(A) below, and that the Debenture will be delivered for registration
with H.M. Land Registry as recommended in paragraph 8(B) below.
(M) That the execution and delivery of the Facility Agreement and the
Debenture by the Parent are (i) in the furtherance of the objects
authorised by the Parent's memorandum of association, and (ii) to the
commercial advantage and in the interests of the Parent.
OPINION
-------
7. Based on and subject to the foregoing, and subject to the reservations
mentioned below and to any matters not disclosed to us, we are of the
opinion that:-
(A) Each of the Borrower and the Parent is a limited liability company
incorporated under English law and has the necessary corporate power
to enter into and perform its obligations under the Facility
Agreement, the Debenture and (as regards the Borrower) the Deposit
Charge.
(B) All necessary corporate action required to authorise the execution and
delivery by the Borrower and the Parent of the Facility Agreement, the
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Debenture and (as regards the Borrower) the Deposit Charge has been
taken.
(C) The Facility Agreement, the Debenture and the Deposit Charge create
valid and binding obligations of the Borrower and (as regards the
Facility Agreement and the Debenture) the Parent under English law.
(D) The following security rights have, among others, been created:-
(i) a legal mortgage over each of the real properties described in
Schedule 1 of the Debenture;
(ii) an equitable fixed charge over the other real property of the
Borrower and the Parent;
(iii) an equitable fixed charge over the Shares;
(iv) an equitable fixed charge over the Borrower's rights to payment
under or in connection with the Transmission Agreement;
(v) an equitable fixed charge over the sums standing from time to
time to the credit of the Account (as defined in the Deposit
Charge); and
(vi) a floating charge over the undertaking, property and assets of
the Borrower and the Parent.
(E) It is not necessary, in order to ensure the validity of the Facility
Agreement, the Debenture or the Deposit Charge or the effectiveness of
the security referred to therein to obtain any authorisation, consent,
approval, licence or permission of, or to effect any filing,
declaration or registration with, any governmental authority of
England, save as provided in paragraphs 8(A) and (B) below.
RESERVATIONS
------------
8. Our reservations are as follows:-
(A) A company registered under the Companies Xxx 0000 must, in order to
ensure that certain classes of security over its assets are not
rendered void against the liquidator or any creditor of the company,
deliver the instrument creating or evidencing the security, together
with the prescribed particulars thereof, to the Registrar of Companies
for registration within 21 days after the creation of such security.
Each of the Borrower and the Parent is registered under the Companies
Xxx 0000. The classes of security which must be registered include a
charge on land, a charge on book debts and a floating charge on the
company's undertaking or property. In respect of a charge on shares,
although the better view is that a fixed charge over shares is not
included in the classes of security which must be registered, it is
recommended that registration of such a charge should be effected
because it could constitute a charge on book debts (namely the
dividends arising under the shares).
(B) Prior to the registration at HM Land Registry of a charge by way of
legal mortgage created over property registered at HM Land Registry,
89
that charge takes effect in equity only. In order that the mortgagee
obtains the rights and powers of a legal mortgage, the charge would
need to be delivered for registration at HM Land Registry, together
with a duly completed application form and fee and the relevant land
or charge certificate, and the mortgagee would need to be registered
as proprietor of such charge.
(C) Clause 5 of the Deposit Charge purports, inter alia, to create a
charge over the Account (as defined in the Deposit Charge). In Re
Charge Card Services Limited [1986] 3 All ER 289, (affirmed (obiter)
by the Court of Appeal in BCCI No. 8 (Xxxxxx x. Agrichemicals Ltd.)
[1996] 2 All ER 121), a first instance decision of the English courts,
it was held that a charge in favour of a debtor of his indebtedness to
the chargor is conceptually impossible. This decision is relevant in
the context of the purported charge over the Account since the
obligations in respect of the Account are owed to the Borrower by the
Agent, the person in whose favour the charge is purported to be
created.
We have also been advised by Leading Counsel that there is a risk that
the English courts may find that provisions such as Clause 3(A) of the
Deposit Charge (which makes repayment of the sums standing to the
credit of the Account conditional on the satisfaction by the Borrower
of its obligations under the Facility Agreement) conflict with English
public policy relating to the winding up of insolvent companies and
accordingly that such provisions may be held to be invalid against a
liquidator.
However, based on views expressed to us by Leading Counsel, we would
not expect an English court in the same proceedings to hold against
the Agent on both the above issues (the logical course being to find
in favour of the Agent on at least one of them), although there is no
authority to this effect.
(D) The security interest in the Shares constituted by the Debenture is
not proposed to be perfected by the registration of the Shares in the
name of the Agent or its nominee. That security interest therefore
constitutes only an equitable charge and, as such, is not as
favourable to the Agent or the Lenders as a perfected legal charge and
suffers from the disadvantages inherent in equitable (as opposed to
legal) charges. In particular, but without prejudice to the
foregoing, such an equitable charge may be defeated if the Shares are
disposed of to a person who acquires the legal title to the Shares in
good faith for value without notice (actual or constructive) of the
equitable charge. The risk of the above occurring is somewhat reduced
so long as the Share Certificates are held by the Agent or a nominee
of the Agent and replacement certificates therefor are not issued.
We recommend, nonetheless, that the Shares are not registered in the
name of the Agent or its nominee. If they were there is a risk that
the Agent and the Lenders could be construed as being "connected" with
the Parent for the purposes of Section 249 of the Insolvency Xxx 0000.
This would have a number of disadvantageous consequences under that
Act.
(E) Floating charges are subject to a number of disadvantages which do not
apply to fixed charges. In particular:
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(i) a floating charge created by a company within twelve months of
the commencement of its winding up is, unless it is proved that
the company is solvent immediately after the creation of the
charge, invalid except to the amount of any cash paid to the
company at the time of or subsequent to the creation of, and in
consideration for, the floating charge together with interest
thereon at a prescribed rate;
(ii) a floating charge is, on enforcement, subject to the rights of,
and accordingly ranks after, unsecured but statutorily preferred
creditors such as the Inland Revenue; and
(iii) a fixed charge created after the creation of, and over the same
assets as, a floating charge may rank ahead of the floating
charge unless the floating charge contains a prohibition on the
creation of other charges ranking prior thereto or pari passu
therewith and the holder of the fixed charge has actual notice
of such prohibition at the time of taking his charge.
(F) We express no opinion as to whether any of the charges created by the
Debenture and the Deposit Charge will amount to fixed rather than
floating charges. Despite being expressed in words which would
suffice to create a fixed charge, an English court would treat
security as a floating charge where effective control of the charged
assets has not been transferred to the person holding the benefit of
the security, for example where it appears that it was intended that
the person granting the charge over the charged assets should have the
licence to dispose of those charged assets in the ordinary course of
its business.
(G) We express no opinion as to the priority of the security interests
under or referred to in the Debenture or the Deposit Charge, whether
as regards other security that may already exist at the time of the
creation of the relevant security interest under the Debenture or the
Deposit Charge or as regards security that may be created thereafter.
So far as the latter is concerned, English law is unclear as to
priority where a subsequent charge is created and further advances are
subsequently made in reliance of the prior charge.
(H) We express no opinion as to the title of the Borrower or the Parent to
the assets to be subject to the security created by the Debenture and
the Deposit Charge. We would, however, refer you to the Report
prepared by us dated 23rd January, 1997 in respect of the Certificate
of Title issued by Linklaters & Paines, solicitors for the BBC, dated
27th September 1996 (as amended by the Supplemental Certificate dated
22nd January, 1997).
(I) We express no opinion as to the efficacy of the Debenture in so far as
it relates to assets which are situated or deemed to be situated
outside England and Wales or are subject to any law other than English
law. Furthermore, we have not made any investigation of the assets
which are subject to the floating charges created by the Debenture and
accordingly our opinions set out above must be read subject to any
limitations or qualifications which may be necessary as a result of
the nature of, or any matter relating to, such assets.
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(J) Rights and obligations under the Facility Agreement, the Debenture and
the Deposit Charge will be subject to any law from time to time in
force relating to insolvency, liquidation or administration or any
other law or legal procedure affecting generally the enforcement of
creditors' rights.
(K) In so far as any obligation under the Facility Agreement, the
Debenture or the Deposit Charge is to be performed in any jurisdiction
other than England, an English court may have to have regard to the
law of that jurisdiction in relation to the manner of performance and
the steps to be taken in the event of non-performance or defective
performance.
(L) We express no opinion as to whether the equitable remedies of specific
performance or injunctive relief would be available in respect of any
obligation of the Borrower or the Parent. These remedies are subject
to the discretion of the English courts.
(M) We express no opinion as to the validity or binding effect of
provisions set out in Clause 27 of the Debenture and Clause 17 of the
Deposit Charge relating to invalidity and severability. An English
court would not give effect to such provisions if they would involve
the courts making a new contract or would not accord with public
policy.
(N) We express no opinion as to the validity or the binding effect of the
obligations as set out in Clause 12.1 of the Facility Agreement and
Clause 25 of the Debenture which provide for the payment of interest
on overdue amounts. An English court would not give effect to such
provisions if it could be established that the amount expressed as
being payable was such that such a clause was in the nature of a
penalty (that is to say a requirement for a stipulated sum to be paid
irrespective of, or necessarily greater than, the loss likely to be
sustained).
(O) There could be circumstances in which an English court would not treat
as conclusive those certificates and determinations which the Facility
Agreement and the Deposit Charge provide are to be conclusive, for
example if it could be shown that a certificate or determination had
an unreasonable or arbitrary basis or was not made in good faith.
(P) We express no opinion on European Union law as it affects any
jurisdiction other than England.
RELIANCE
--------
9. This opinion is addressed to you for your own benefit and as agent for and
on behalf of the Lenders in connection with the Facility Agreement, the
Debenture and the Deposit Charge. It may not be relied upon by any person
other than yourselves or the Lenders or used for any other purpose and,
without our prior written consent, neither its contents nor its existence
may be disclosed to any other person.
Yours faithfully,
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SCHEDULE 12:
FORM OF OVERDRAFT BANK AGREEMENT
OVERDRAFT BANK AGREEMENT
------------------------
DATE :
PARTIES
1. [ ] of [
] (the "OVERDRAFT BANK")
2. CASTLE TRANSMISSION INTERNATIONAL LTD, a company incorporated in England
(number 3196207) whose registered office is at Warwick Technology Park,
Gallows Hill, Xxxxxxxxx Xxxx, Xxxxxxx XX00 0XX, on its own behalf and on
behalf of each of the existing Guarantors (each as defined in the Loan
Agreement referred to below)
3. CREDIT SUISSE FIRST BOSTON (the "AGENT"), on its own behalf and on behalf
of each of the Lenders (as defined in the Loan Agreement)
BACKGROUND
A Loan Agreement (the "LOAN AGREEMENT") was made on 28 February, 1997 (and
amended on [ ], 1997) between (1) Castle Transmission
International Ltd as borrower, (2) Castle Transmission Services (Holdings) Ltd
as guarantor, (3) the lenders named in the Loan Agreement, (4) Credit Suisse
First Boston as Agent, (5) Credit Suisse First Boston as arranger and (6) X.X.
Xxxxxx Securities Ltd. as co-arranger. Under the terms of the Loan Agreement the
Lenders agreed to provide to the Borrower a (Pounds)64,000,000 revolving loan
facility.
The Overdraft Bank has provided overdraft facilities (the "OVERDRAFT
FACILITIES") to the Borrower and wishes the Borrower's obligations under those
Overdraft Facilities to be secured by the Charges.
The parties agree as follows:
1. INTERPRETATION
Unless a contrary intention is indicated, words and expressions defined in
the Loan Agreement and which are not defined in this Agreement will have
the same meanings when used in this Agreement. References to the Loan
Agreement are to that agreement as amended or supplemented.
2. UNDERTAKINGS OF THE OVERDRAFT BANK
The Overdraft Bank agrees that:
(A) The Overdraft Bank has delivered to the Agent a copy of the document
(if any exists) describing the terms of the Overdraft Facilities.
(B) The Overdraft Bank will notify the Agent of the termination or breach
of the Overdraft Facilities (or any event which, upon the giving of
notice, lapse of time or both would give cause for a termination of
the Overdraft Facilities).
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3. SECURITY
By virtue of the execution of this Agreement the amounts due by the
Borrower under the Overdraft Facilities become secured under the Charges.
Only a maximum of (Pounds)[ ]/1/ of the amount outstanding under the
Overdraft Facilities will, however, rank equally with amounts outstanding
under the Loan Agreement. The remainder, if any, will rank behind.
4. THE AGENT
4.1 APPOINTMENT
The Agent is appointed as an agent by the Overdraft Bank. The Agent is not
acting as agent of any Company under this Agreement.
4.2 AUTHORITY
The Agent is authorised to exercise the rights, powers, discretions and
duties which are specified by the Financing Documents. The Agent may also
act in a manner reasonably incidental to these matters.
4.3 DUTIES
In addition to the obligations of the Agent set out elsewhere in the
Financing Documents the Agent agrees as follows:
(A) NOTICES: The Agent will as soon as reasonably practicable notify the
Overdraft Bank of the contents of each notice received from a Company
under the terms of a Financing Document. If the notice does not
affect the Overdraft Bank the Agent may elect not to notify the
Overdraft Bank.
(B) OTHER DOCUMENTS: When a Company delivers to the Agent any other
document required to be delivered under a Financing Document the Agent
will as soon as reasonably practicable provide a copy to the Overdraft
Bank. The Borrower agrees to reimburse the Agent for the costs of
preparing any copies required for this purpose.
(C) TERMINATION EVENTS: The Agent will notify the Overdraft Bank of any
Termination Event or Potential Termination Event. This obligation
will not arise, however, until the Agent receives express notice with
reasonable supporting evidence of the Termination Event or Potential
Termination Event. Until this time the Agent is entitled to assume
that there is no Termination Event or Potential Termination Event.
The Agent is not required to make inquiries. Information referred to
in Clause 4.11 does not have to be disclosed under this sub-clause.
The duties under this sub-clause will be discharged if the Agent performs
the corresponding duties to the Overdraft Bank or its affiliate in is
capacity as a Lender.
____________________
/1/ The aggregate maximum amount included in this space for all Overdraft Banks
must not exceed (Pounds)2,500,000. See Clause 19.1(K)(i).
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4.4 POWERS
In addition to the powers of the Agent set out elsewhere in the Financing
Documents the Agent has the following powers:
(A) PROFESSIONAL ADVISERS: The Agent may instruct professional advisers
to provide advice in connection with this Agreement and the Overdraft
Facilities.
(B) AUTHORITY FROM INSTRUCTING GROUP: The Agent may take any action which
is not inconsistent with the Financing Documents and which is
authorised by an Instructing Group.
(C) VIEWS OF INSTRUCTING GROUP: In exercising any of its rights, powers
or discretions the Agent may seek the views of an Instructing Group.
If it exercises those rights, powers or discretions in accordance with
those views the Agent will incur no liability.
(D) PROCEEDINGS: The Agent may institute legal proceedings against a
Company in the name of the Overdraft Bank if the Overdraft Bank
authorises it to take those proceedings.
(E) COMPLIANCE WITH LAW: The Agent may take any action necessary for it to
comply with applicable laws.
The Agent is not required to exercise any of these powers and will incur no
liability if it fails to do so. In the context of legal proceedings the
Agent may decline to take any step until it has received indemnities or
security satisfactory to it.
4.5 RELIANCE
The Agent is entitled to rely upon each of the following:
(A) Advice received from professional advisers.
(B) A certificate of fact received from a Company and signed by an
Authorised Person.
(C) Any communication or document believed by the Agent to be genuine.
The Agent will not be liable for any of the consequences of relying on
these items.
4.6 EXTENT OF AGENT'S DUTIES
(A) NO OTHER DUTIES: The Agent has no obligations or duties other than
those expressly set out in this Agreement, the Financing Documents and
the other Overdraft Bank Agreements.
(B) ILLEGALITY AND LIABILITY: The Agent is not obliged to do anything
which is illegal or which may expose it to liability to any person.
(C) NOT TRUSTEE: The Agent is not acting as a trustee for any purpose in
connection with this Agreement, except for its role described in Clause
4.13, 4.14 and 4.15.
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4.7 RESPONSIBILITY OF THE OVERDRAFT BANK
The Overdraft Bank is responsible for its own decision to become involved
in the Overdraft Facilities and its decision to take or not take action
under the Overdraft Facilities. It should make its own credit appraisal of
the Borrower and the terms of the Overdraft Facilities. The Agent makes no
representation that any information provided to the Overdraft Bank before
or after the date of this Agreement is true. Accordingly the Overdraft
Bank should take whatever action it believes is necessary to verify that
information. In addition the Agent is not responsible for the legality,
validity or adequacy of any Financing Document or the efficacy of the
Security under the Charges. The Overdraft Bank will satisfy itself on
these issues.
4.8 LIMITATION OF LIABILITY
(A) AGENT: The Agent will not be liable to the Overdraft Bank for any
action or non-action under or in connection with the Financing
Documents unless caused by its gross negligence or wilful misconduct.
(B) DIRECTORS, EMPLOYEES AND AGENTS: No director, employee or agent of the
Agent will be liable to the Overdraft Bank in relation to the Financing
Documents. The Overdraft Bank agrees not to seek to impose this
liability upon them.
4.9 BUSINESS OF THE AGENT
Despite its role as agent of the Overdraft Bank the Agent may:
(A) participate as a Lender in the Revolving Facility or as an Overdraft
Bank,
(B) carry on all types of business with any Company, and
(C) act as agent for other groups of lenders to any Company or other
borrowers.
4.10 INDEMNITY
The Overdraft Bank agrees to reimburse the Agent for all losses and
expenses incurred by the Agent as a result of its appointment as Agent or
arising from its activities as Agent in relation to this Agreement. These
losses and expenses will take into account amounts reimbursed to the Agent
by the Borrower. The Overdraft Bank is not liable for losses and expenses
arising from the gross negligence or wilful misconduct of the Agent.
4.11 CONFIDENTIAL INFORMATION
The Agent is not required to disclose to the Overdraft Bank any
information:
(A) which is not received by it in its capacity as Agent, or
(B) which it receives, with its consent, on a confidential basis.
4.12 RESIGNATION AND REMOVAL
The Agent may resign or be removed in accordance with the terms of the Loan
Agreement. In this case the Overdraft Bank agrees to co-operate, to the
extent reasonably necessary, with the transfer of function to a new Agent.
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4.13 OBLIGATION TO PAY TO THE AGENT
The Borrower agrees to pay to the Agent on demand each amount due and
payable by the Borrower to the Overdraft Bank under the Overdraft
Facilities. This obligation will be satisfied to the extent that the
amount is paid to the Overdraft Bank. It does not affect the rights of the
Overdraft Bank or the obligations of the Borrower to the Overdraft Bank. A
payment of an amount under this sub-clause will, however, satisfy the
Borrower's obligation to pay that amount to the Overdraft Bank.
4.14 HOLDING AS SECURITY TRUSTEE
The Agent agrees that it holds the benefit of:
(A) Clause 4.13; and
(B) the Charges and all Security arising from the Charges,
as trustee on behalf of:
(i) the Lenders; and
(ii) each Overdraft Bank.
All the Agent's rights and claims arising under the items mentioned in
paragraphs (A) and (B) are vested in it on this basis.
4.15 SECURITY
(A) PERFECTION OF SECURITY AND TITLE: The Agent:
(i) is not liable for any failure, omission or defect in perfecting
the Security constituted by any Charge;
(ii) may accept without enquiry the title to the property over which
Security is intended to be created by any Charge.
(B) CUSTODY: The Agent is not under any obligation to hold any title deeds,
security documents or any other documents in connection with the
property charged by any Charge or to take any steps to protect or
preserve these documents. The Agent may permit a Company to retain all
these documents in its possession or may deposit them with a nominee or
custodian. This paragraph does not apply to documents held in relation
to a legal mortgage over, or over an interest in, real property or
shares.
5. NOTICES
Any notice to be delivered to the Overdraft Bank may be delivered to it, or
its affiliate, as a Lender in the manner described in the Loan Agreement.
6. LAW
This Agreement is to be governed by and construed in accordance with
English law.
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SIGNATURES
[Name of Overdraft Bank]
By:
Castle Transmission International Ltd
By:
[Name of Agent]
By:
