EXHIBIT 10.20
FACILITY AGREEMENT
DATED 2nd APRIL 0000
XXXXXX XXXXXXXXXXXXX XXXXXXX
XXXXXXX FINANCIAL LIMITED
CONTENTS
1 INTERPRETATION 1
2 FACILITIES 11
3 PURPOSE 11
4 CONDITIONS PRECEDENT 12
5 RESTRICTIONS ON UTILISATION 12
6 UTILISATION OF FACILITIES 14
7 REPAYMENT AND PREPAYMENT 17
8 INTEREST AND COMMISSION 20
9 COLLECTION OF RECEIVABLES 20
10 TAX 22
11 INCREASED COSTS 23
12 REPRESENTATIONS AND WARRANTIES 24
13 GENERAL UNDERTAKINGS 26
14 INFORMATION AND ASSET UNDERTAKINGS 31
15 GUARANTEE AND INDEMNITY 36
16 EVENTS OF DEFAULT 38
17 COSTS, EXPENSES AND FEES 40
18 INDEMNITIES 41
19 NOTICES 42
20 MISCELLANEOUS PROVISIONS 43
21 GOODS AND DOCUMENTS 44
22 CHANGES TO PARTIES 45
23 GOVERNING LAW AND JURISDICTION 46
Contents (i)
SCHEDULE 1 - THE OBLIGORS 47
SCHEDULE 2 - CONDITIONS PRECEDENT 48
SCHEDULE 3 - FORMS OF REQUEST 53
SCHEDULE 4 - FORMS OF REPORT 58
SCHEDULE 5 - FORM OF ACCESSION LETTER 61
Contents (ii)
FACILITY AGREEMENT
DATED
BETWEEN
(1) XXXXXX INTERNATIONAL LIMITED (the COMPANY) registered in England with
number 01209891;
(2) THE COMPANIES (if any) identified in Part I of Schedule 1 as Facility
Companies;
(3) THE COMPANIES (if any) identified in Part I of Schedule 1 as
Guarantors;
(4) BURDALE FINANCIAL LIMITED (BURDALE) registered in England with number
2656007.
IT IS AGREED:
1 INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
ACCESSION LETTER means a document substantially in the form set out in
Schedule 5.
ACTUAL DAY OF PAYMENT in relation to a Purchased Receivable means the
date on which full payment in respect of that Purchased Receivable is
made into a Blocked Account by the relevant account debtor or the
relevant Facility Company.
ADDITIONAL FACILITY COMPANY means each company which becomes an
Additional Facility Company in accordance with Clause 22.2.
ADDITIONAL GUARANTOR means each company which becomes an Additional
Guarantor in accordance with Clause 22.3.
ADDITIONAL OBLIGOR means each Additional Facility Company and each
Additional Guarantor.
AFFILIATE means, in relation to any person, a Subsidiary of that person
or a Holding Company of that person or any other Subsidiary of that
Holding Company.
AVAILABILITY LIMITS means the restrictions on Utilisations set out in
Clause 5.
AVAILABILITY PERIOD means the period from the opening of business in
London on today's date until close of business in London on the date
falling five Business Days prior to the Final Repayment Date or such
later date as Burdale may agree.
BLOCKED ACCOUNTS means the following accounts of the Facility Companies
with The Royal Bank of Scotland, Manchester Xxxxxx Street branch:
(a) the Company's Sterling account number 00000000, sort code
16-00-01;
(b) the Company's euro account number HAYEINTE-EUR1;
(c) the Company's Dollar account number HAYEINTE-USD1;
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(d) any bank accounts of an Additional Facility Company specified
as Blocked Accounts in the relevant Accession Letter;
in each case, (as the same may be redesignated, renumbered or renamed
from time to time), or such other account(s) as previously approved by
Burdale.
BUSINESS DAY means any day not being a Saturday, Sunday or Bank holiday
when banks are open for business in London.
CASH REQUEST means a request for Burdale to pay to a Facility Company
an amount of unpaid Purchase Price and/or the proceeds of a Loan in
substantially the form set out in Part II of Schedule 3.
CHARGED ACCOUNTS means the Blocked Accounts and the Other Accounts.
CONGRESS means Congress Financial Corporation (Central) an Illinois
corporation.
CONSOLIDATED PROFIT means, for any period, the consolidated profit of
the Company on ordinary trading activities before tax, adding back
depreciation and amortisation but after deducting any exceptional or
extraordinary profit and after adding back any non-cash exceptional
write-offs during such period as all such terms are defined in
accordance with GAAP (applied consistently with the accounting
principles of the Obligors as at today's date) and all as determined
from the most recent consolidated monthly management accounts of the
Company delivered to Burdale pursuant to Clause 14.1(b).
CONSOLIDATED TANGIBLE NET WORTH means the aggregate amount from time to
time paid up or credited as paid up on the share capital of the Company
and the amount standing to the credit of its consolidated capital and
reserves (including any share premium account or capital redemption
reserve, but excluding any goodwill (whether positive or negative)
and/or any intangible assets) plus or minus the amount standing to the
credit or debit of the consolidated profit or loss account of the
Company all as determined from the most recent consolidated monthly
management accounts of the Company delivered to Burdale pursuant to
Clause 14.1(b).
DEBENTURE means the debenture executed or to be executed by the Company
in favour of Burdale.
DEED OF PRIORITIES means the deed of priorities dated on or about the
date of this Agreement between the Company, Burdale and the Trustees of
the Xxxxxx International Limited Pension Scheme.
DEFAULT means any Event of Default and any event which with the giving
of notice and/or lapse of time and/or as a result of any Utilisation
and/or determination of materiality and/or fulfilment of any condition
(or any combination of the foregoing) would constitute an Event of
Default.
DEFAULT RATE means the rate determined by Burdale to be 2% above the
Interest Rate from time to time.
DILUTION RATE means the monthly value of credit notes and non-cash
credits issued by a Facility Company as a percentage of the monthly
value of sales.
DIP FINANCING DATE means the first date on which Congress makes funding
available to Xxxxxx US pursuant to a debtor-in-possession facility
provided to it upon its commencement of a case under Chapter 11 of the
United States Bankruptcy Code and Burdale has received (in a form and
substance satisfactory to it) the documents, evidence and other items
specified in Part II of Schedule 2.
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DOCUMENTS means any and all documents which represent or relate to any
Goods and/or the carriage of and/or possession of and/or ownership of
and/or title to and/or insurance of and/or warehousing of and/or any
other dealing in or with any Goods.
DOLLARS and $ means the lawful currency for the time being of the
United States of America.
ELIGIBLE RECEIVABLES means, at any time, any Receivables at such time
which are evidenced by an invoice rendered by a Facility Company to the
relevant account debtors save for any Receivable:
(a) which does not arise from the actual and bona fide sale and
delivery of goods by the relevant Facility Company or
rendering of services by the relevant Facility Company in the
ordinary course of its business which transactions are
completed in accordance with the terms and provisions
contained in any documents relating to such transactions;
(b) which remains fully or partly unpaid after its Maturity Date
or such longer period as may be agreed by Burdale;
(c) owing by a single account debtor if Receivables representing
50% or more of the aggregate balance owing by such account
debtor to the Facility Companies are not Eligible Receivables
by reason of the operation of paragraph (b) above;
(d) with respect to which the account debtor is a director,
officer, employee or Affiliate of any Obligor;
(e) with respect to which the account debtor has or has asserted a
counterclaim or has a right of set off, to the extent of such
counterclaim or set off;
(f) as to which performance has not been completed by the relevant
Facility Company or as to which all goods and services in
connection with such Receivable have not been delivered to or
performed for the account debtor or which has not been
invoiced or is not fully assignable;
(g) with respect to which the account debtor is the subject of any
bankruptcy or insolvency proceeding in any jurisdiction or has
made an assignment for the benefit of creditors or whose
assets have been conveyed to a receiver, administrator,
trustee or other insolvency official;
(h) with respect to which the account debtor's obligation to pay
the Receivable is conditional upon the account debtor's
approval or is otherwise subject to any repurchase obligation
or right of return, as with sales made on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval (except
with respect to Receivables in connection with which account
debtors are entitled to return goods on the basis of the
quality of those goods) or consignment basis;
(i) owed by an account debtor incorporated or resident outside the
United Kingdom, unless Burdale otherwise agrees and such
Receivable is subject to valid and enforceable credit
insurance payable to Burdale issued by an insurer on terms and
in an amount acceptable to Burdale as determined by it in good
faith and the aggregate invoice values owed by that relevant
account debtor are within the insured limit;
(j) owed by an account debtor whose total indebtedness to the
Facility Companies exceeds any credit limit set by Burdale
from time to time with respect to that account debtor to the
extent such Receivable breaches that credit limit provided
that any reduction in the credit limit as to a particular
account debtor will not cause any Receivables owing by
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that account debtor as of the date of such reduction not to
qualify as Eligible Receivables;
(k) where there are proceedings or actions which are threatened or
pending against the account debtors with respect to such
Receivables which would result in any material adverse change
in any such account debtor's financial condition;
(l) where there are facts, events or occurrences which would
impair the validity, enforceability or collectability of that
Receivable or of reducing the amount payable or delaying
payment of that Receivable.
ELIGIBLE STOCK means all Stock save for any Stock which, at any time:
(a) is obsolete, slow-moving, not in good condition or not
currently usable or saleable in the ordinary course of a
Facility Company's business;
(b) is held at third party premises but not held subject to
Warehouseman Association standard agreement;
(c) constitutes materials over which Burdale does not have a valid
first ranking fixed or floating charge under the Security
Documents;
(d) constitutes consumables used in a Facility Company's business
or constitutes packaging or shipping materials;
(e) constitutes returned, damaged or defective materials;
(f) is held by a Facility Company as consignee for a third party;
(g) is not the property of the relevant Facility Company by virtue
of retention of title or Romalpa provisions in favour of any
person;
(h) is spare parts or scrap or is only semi-finished or otherwise
constitutes work-in-progress;
(i) is in transit outside property which is owned and controlled
by any Obligor except in cases where they are (i) in transit
by a Facility Company or by a courier on its behalf between
such property and the aggregate value of such Stock does not
at any time exceed the sum of $15,000 or (ii) in transit to a
Facility Company and Burdale has in its possession all
originals of the bills of lading or other documents of title
with respect to such Stock and has received all such
agreements as Burdale requires in order to perfect first
ranking fixed or floating security in such Stock and to obtain
possession of such Stock from any third party having
possession of the same; or
(j) is determined in good faith by Burdale as being unsuitable for
forming the basis of a lending decision as a result of any
change in or introduction of or change in the interpretation
or application of any law, regulation, treaty or official
directive or official request having the force of law.
END DATE in relation to an L/C means the earlier of the expiry date of
such L/C and the date on which the L/C is drawn in full.
EQUIPMENT means equipment, machinery, computers and computer hardware
and software (whether owned or licensed), vehicles, tools, furniture
and fixtures and all attachments, accessories and property now or in
future relating to them or used in connection with them and
replacements and substitutions for them.
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EURO or EURO means the single currency of the Participating Member
States.
EVENT OF DEFAULT means any of the events specified in Clause 16.1.
EXCHANGE RATE means the prevailing spot rate of exchange of such bank
as Burdale may select for the purpose, at or around 11.00 a.m. on the
date on which any conversion of currency is to be made under this
Agreement. FACILITIES means the Receivables Finance Facility and the
Revolving Credit Facility.
FACILITY COMPANY means each company (if any) identified as a Facility
Company in Part I of Schedule 1 and each Additional Facility Company.
FACILITY LIMIT means $10,000,000 until the occurrence of the DIP
Financing Date and thereafter $15,000,000.
FINAL REPAYMENT DATE means the third anniversary of today's date.
FINANCE DOCUMENTS means this Agreement, the Deed of Priorities, the
Security Documents, all other agreements, documents and instruments at
any time executed in favour of and/or delivered by any Obligor to
Burdale and/or designated as a Finance Document by Burdale and the
Company.
FINANCIAL INDEBTEDNESS means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit
facility;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be
treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing;
(g) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or
price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken
into account);
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or
any other instrument issued by a bank or financial
institution; and
(i) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a)
to (h) above.
FOREIGN CURRENCY means any currency other than Sterling which is freely
available and transferable.
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FOREX EXPOSURE in relation to any unmatured Forex Transaction means the
Forex Percentage of such transaction.
FOREX LIMIT means $nil.
FOREX PERCENTAGE means:
(a) 10% in relation to euros and United States Dollars; and
(b) 20% in relation to all other currencies,
or in each case, such higher percentage determined by Burdale having
regard to the nature of the currencies involved in any Forex
Transaction.
FOREX REQUEST means a request for a Utilisation of the Revolving Credit
Facility for the sale or purchase of a Foreign Currency substantially
in the form set out in Part IV of Schedule 3.
FOREX TRANSACTION means a foreign exchange transaction entered into as
a Utilisation of the Revolving Credit Facility.
GAAP means generally accepted accounting principles in the United
Kingdom.
GOODS means all Stock, produce, inventory and/or other goods which are
the subject of a purchase by a Facility Company and in respect of which
any L/C has been issued.
GROUP means the Company and its Subsidiaries.
GUARANTOR means each company (if any) identified as a Guarantor in
Part II of Schedule 1 and each Additional Guarantor.
XXXXXX US means Xxxxxx International, Inc, a Delaware corporation.
HOLDING COMPANY means, in relation to a company or a corporation, any
other company or corporation in respect of which it is a Subsidiary.
INTEREST RATE means the aggregate of LIBOR, MLA Cost and the Margin.
L/Cs means letters of credit, merchandise purchase or other guarantees
which are from time to time either (a) issued or opened by Burdale for
the account of a Facility Company or (b) with respect to which Burdale
has agreed to indemnify the issuer or guaranteed to the issuer the
performance by a Facility Company of its obligations to such issuer.
L/C EXPOSURE in relation to any L/C means:
(a) if the proposed L/C is by way of a letter of credit and for
the purpose of purchasing Eligible Stock:
(i) the face amount of the L/C; LESS
(ii) the Stock Percentage TIMES the cost of such Eligible
Stock for which such L/C was drawn; PLUS
(iii) freight, taxes, duty and other amounts which Burdale
estimates must be paid in connection with such Stock
upon arrival and for delivery to one of the relevant
Facility Company's locations for Eligible Stock within
the United Kingdom; and
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(b) if the proposed L/C is for any other purpose an amount equal
to 100% of the face amount of such L/C and all other
commitments and obligations made or incurred by Burdale with
respect to such L/C.
L/C LIMIT means $1,000,000.
L/C REQUEST means a request for a Utilisation of the Revolving Credit
Facility by way of the issue of an L/C in substantially the form set
out in Part III of Schedule 3.
LIBOR means:
(a) in relation to an amount denominated in euro, the thirty day
LIBOR euro rate quoted on the first Business Day of each month
in the Financial Times, London edition as conclusively
determined by Burdale;
(b) in relation to an amount denominated in Sterling, the thirty
day LIBOR Sterling rate quoted on the first Business Day of
each month in the Financial Times, London edition as
conclusively determined by Burdale;
(c) in relation to an amount denominated in Dollars, the thirty
day LIBOR Dollar rate quoted on the first Business Day of each
month in the Financial Times, London edition as conclusively
determined by Burdale; or
(d) (if for any reason the Financial Times, London edition ceases
or fails to quote such a rate) Burdale's cost of funds from
whatever source it may reasonably request.
LOAN means the principal amount of each borrowing under this Agreement
from the Revolving Credit Facility (including any deemed borrowing
pursuant to Clause 6.6) as reduced by repayment or prepayment from time
to time.
MARGIN means 3% per annum.
MATERIAL ADVERSE EFFECT means an effect that results in or causes, or
has a reasonable likelihood of resulting in or causing, a material
adverse change in any of:
(a) the business, performance, operations or properties of the
Obligors taken either individually or as a whole; and/or
(b) the legality, validity or enforceability of any Finance
Document; and/or
(c) the perfection or priority of the Security Interests granted
to Burdale under the Finance Documents; and/or
(d) the ability of any Obligor to perform its respective
obligations under any of the Finance Documents; and/or
(e) the rights and remedies of Burdale under any Finance Document.
MATURITY DATE means in respect of any Receivable the Business Day which
is, or immediately succeeds the date which is the earlier of:
(a) 120 days after the date of the invoice in respect of such
Receivable; and
(b) 60 days after the due date for payment of such invoice.
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MLA COST means the cost (expressed as a rate per annum) of the London
branch of Wachovia N.A. (or any other bank from which Burdale obtains
funding for its provision of the Facilities) of complying with the
requirements of the Bank of England and/or the Financial Services
Authority and/or any other applicable regulatory authority in respect
of monetary control, liquidity or otherwise.
NET STOCK VALUE means the net value of Stock as determined by the
relevant Facility Company in accordance with its customary practices
and procedures (as disclosed to Burdale prior to today's date and as
the same may be varied from time to time with Burdale's written
consent) and advised to Burdale from time to time.
OBLIGORS means the Facility Companies and the Guarantors.
OTHER ACCOUNTS means the bank accounts of the Obligors specified as
Other Accounts in the Debenture and/or such other bank accounts of the
Obligors as Burdale may permit.
OUTSTANDING PURCHASE PRICE means the aggregate from time to time of the
Purchase Prices of Receivables paid to the Facility Companies
(including any deemed payment of Purchase Price pursuant to Clause 6.6)
in respect of which Burdale has not received payment from the relevant
account debtor or the relevant Facility Company.
PARENT GUARANTEE means the guarantee of the obligations of the Company
to Burdale executed and delivered by Xxxxxx US and Xxxxxx Holdings,
Inc. on or about today's date.
PARENT SECURITY means any document or documents by which Xxxxxx US
grants a Security Interest over its assets (other than the Share
Mortgage) in favour of Burdale.
PARTICIPATING MEMBER STATE means a member state of the European
Community which has adopted or adopts the single currency in accordance
with legislation of the European Community relating to Economic and
Monetary Union.
PAST DUE PAYABLE means any trade payable of any Obligor which remains
outstanding more than 60 days after its original due date for payment.
PERMITTED CURRENCY means euro, Sterling or Dollars.
PURCHASE COMMISSION is defined in Clause 8.2.
PURCHASE DATE in relation to a Purchased Receivable means the date of
delivery of a Purchase Request by a Facility Company with respect to
such Purchased Receivable.
PURCHASE PRICE means the purchase price to be paid by Burdale for
Purchased Receivables being 85% of the face value of each Eligible
Receivable to be purchased under the Receivables Finance Facility less
maximum discounts, credits and allowances of any nature which may be
taken by or granted to any account debtor or other person in connection
with such Eligible Receivable (all as determined by Burdale in
accordance with Clause 6.1.3).
PURCHASE REQUEST means a Request for a Utilisation of the Receivables
Finance Facility in substantially the form set out in Part I of
Schedule 3.
PURCHASED RECEIVABLE means a Receivable purchased by Burdale from a
Facility Company in accordance with the terms of this Agreement.
RECEIVABLE means, at any time, the aggregate present and future
obligations of an account debtor of a Facility Company for the payment
of money to such Facility Company at such time together with all
connected rights, claims, deposits and payments.
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RECEIVABLES FINANCE FACILITY is defined in Clause 2(a).
RECEIVABLES LIMIT means $10,000,000 until the occurrence of the DIP
Financing Date and thereafter $15,000,000.
REQUEST means a request substantially in the form set out in the
relevant Part of Schedule 3 for a Utilisation of one of the Facilities.
RESERVES is defined in Clause 5.5.
REVOLVING CREDIT FACILITY is defined in Clause 2(b).
REVOLVING CREDIT LIMIT means $5,000,000 until the occurrence of the DIP
Financing Date and thereafter $7,500,000.
SECURITY DOCUMENTS means the Debenture, the Share Mortgage, the Parent
Guarantee, the Parent Security and any other guarantee or security
documents executed in favour of Burdale from time to time in relation
to the obligations or indebtedness of the Obligors (or any of them).
SECURITY INTEREST means a mortgage, charge, pledge, lien or other
security interest securing any obligation of any person, or any other
agreement or arrangement having similar effect.
SHARE MORTGAGE means the mortgage of the entire issued share capital of
the Company to be executed and delivered by Xxxxxx US on the DIP
Financing Date.
STERLING and L means the lawful currency for the time being of the
United Kingdom.
STOCK means each Facility Company's stock and inventory at any time.
STOCK PERCENTAGE means 68%.
SUBSIDIARY means a subsidiary within the meaning of Section 736 of the
Companies Xxx 0000.
TAX means any tax, levy, impost, duty or other charge or withholding of
a similar nature (including any penalty or interest payable in
connection with any failure to pay or delay in paying the same).
TAX CREDIT means a credit against, relief or remission for, or
repayment of any Tax.
TAX DEDUCTION means a deduction or withholding for or on account of Tax
from a payment under the Finance Documents.
TAX PAYMENT means an increased payment made by an Obligor to Burdale
under Clause 10.1.3 or 10.2.1.
TOTAL RECEIVABLES AVAILABILITY means, at any time, 85% of the face
value of the Eligible Receivables less maximum discounts, credits and
allowances of any nature which may be taken by or granted to any
account debtor or any other person in connection with the Eligible
Receivables at such time.
TOTAL STOCK AVAILABILITY means, at any time, the Stock Percentage of
the Net Stock Value of Eligible Stock at such time.
TRADING CASHFLOW means, for any period, the Consolidated Profit during
such period but after deducting all amounts of capital expenditure by
any member of the Group as all such terms are defined in accordance
with GAAP (applied consistently with the accounting principles of the
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Obligors as at today's date) and all as determined from the most recent
consolidated monthly management accounts of the Company delivered to
Burdale pursuant to Clause 14.1(b).
TRUSTEES is defined in the Deed of Priorities.
TRUSTEE AGREEMENT is defined in the Deed of Priorities.
TRUSTEE MORTGAGE is defined in the Deed of Priorities.
UTILISATION means a utilisation of a Facility under this Agreement
(with the delivery of a Purchase Request and the payment of Purchase
Price by Burdale pursuant to a Cash Request constituting separate
Utilisations of the Receivables Finance Facility).
UTILISATION DATE in relation to a Utilisation means the date on which
such Utilisation is made (being in relation to any Utilisation of the
Receivables Finance Facility, both the Purchase Date and the date on
which any payment of Purchase Price is made to a Facility Company
pursuant to a Cash Request).
VAT means value added tax as provided for in the Value Added Tax Xxx
0000 and any other tax of a similar nature.
1.2 CONSTRUCTION
1.2.1 Any reference in this Agreement to:
(a) ASSETS includes present and future properties, revenues and
rights of every description;
(b) an AUTHORISATION means an authorisation, consent, approval,
licence, resolution, filing or registration;
(c) a FINANCE DOCUMENT or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended or novated;
(d) INDEBTEDNESS includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(e) a PERSON includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust or partnership (whether or not having separate legal
personality) or two or more of the foregoing;
(f) a REGULATION includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;
(g) a provision of law is a reference to that provision as amended
or re-enacted;
(h) words importing the singular shall include the plural and vice
versa; and
(i) unless a contrary indication appears, a time of day is a
reference to London time.
1.2.2 Clause and Schedule headings are for ease of reference only.
1.2.3 A Default (other than an Event of Default) is CONTINUING if it has not
been remedied or waived and an Event of Default is CONTINUING if it has
not been waived.
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1.2.4 If at any time there are no persons who are Guarantors, the term
OBLIGORS shall be construed, whilst such circumstance is continuing, as
a reference solely to the Facility Companies and if at any time the
Company is the only Facility Company the references in this Agreement
to FACILITY COMPANY shall, whilst such circumstance is continuing, be
construed accordingly.
1.2.5 A person who is not party to this Agreement has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of
this Agreement but this does not affect any right or remedy of a third
party which exists or is available apart from the Contracts (Rights of
Third Parties) Xxx 0000.
1.2.6 Where there is a reference in this Agreement to any amount, limit or
threshold specified in Dollars, in ascertaining whether or not that
amount, limit or threshold has been attained, broken or achieved, an
amount denominated in a currency other then Dollars shall be counted on
the basis of the equivalent in Dollars of that amount using the
Exchange Rate.
2 FACILITIES
Subject to the terms of this Agreement Burdale agrees to make available
the following facilities:
(a) to the Facility Companies, a Receivables Finance Facility
pursuant to which Burdale will from time to time during the
Availability Period purchase Receivables from the Facility
Companies (the RECEIVABLES FINANCE FACILITY);
(b) to the Facility Companies, a revolving credit facility
pursuant to which Burdale will during the Availability Period
(i) make Loans to the Facility Companies (ii) issue, or
procure the issue of, L/Cs for the account of the Facility
Companies and (iii) buy or sell Foreign Currency spot and/or
for delivery at a future date on behalf of the Facility
Companies (the REVOLVING CREDIT FACILITY).
3 PURPOSE
3.1 GENERAL
3.1.1 The Company will use the Facilities:
(a) in making a loan to Xxxxxx US in an amount not exceeding
$5,600,000 out of the initial Utilisations, and
(b) otherwise only for its general operating, working capital and
other proper corporate purposes and always in a manner which
is not inconsistent with the Finance Documents.
3.1.2 Each other Facility Company will use the Facilities only for its
general operating, working capital and other proper corporate purposes
and always in a manner which is not inconsistent with the Finance
Documents.
3.2 NO OBLIGATION
Without affecting the obligations of the Facility Companies in any way,
Burdale is not obliged to monitor or verify the application of the
Facilities.
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4 CONDITIONS PRECEDENT
4.1 INITIAL CONDITIONS
No Request may be delivered unless Burdale shall have received all of
the documents and evidence specified in Part I of Schedule 2 in a form
and substance satisfactory to it.
4.2 FURTHER CONDITIONS
The obligations of Burdale in respect of any Utilisation are subject to
the further conditions precedent that both on the date of the relevant
Request and the proposed Utilisation Date:
(a) the representations and warranties set out in Clause 12 to be
repeated on such dates are true and correct; and
(b) no Default has occurred and is continuing or would result from
the making of such Utilisation.
5 RESTRICTIONS ON UTILISATION
5.1 LOANS
No Cash Request may be delivered which would involve the drawing of a
Loan unless at the time of delivery either (a) the Receivables Finance
Facility is or would be following the delivery of such Cash Request
being utilised up to the Receivables Limit or (b) the Facility
Companies have no Receivables with which to utilise the Receivables
Finance Facility.
5.2 LETTERS OF CREDIT
No Request may be delivered for an L/C to be issued pursuant to the
Revolving Credit Facility unless and until the form of L/C has been
approved by Burdale, the relevant issuer and the proposed beneficiary
of such L/C.
5.3 OVERALL LIMIT
The aggregate amount of:
(a) all Loans;
(b) Outstanding Purchase Price;
(c) all L/C Exposures; and
(d) all Forex Exposures,
shall not at any time exceed the Facility Limit.
5.4 SPECIFIC LIMITS
5.4.1 RECEIVABLES FINANCE FACILITY: The Outstanding Purchase Price shall not
at any time exceed the Receivables Limit.
5.4.2 REVOLVING CREDIT FACILITY: The aggregate amount of:
(a) all Loans;
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(b) all L/C Exposures; and
(c) all Forex Exposures,
shall not at any time exceed the Revolving Credit Limit.
5.4.3 L/C UTILISATIONS: The aggregate amount of all L/C Exposures shall not
at any time exceed the L/C Limit.
5.4.4 FOREIGN EXCHANGE UTILISATIONS: The aggregate amount of all Forex
Exposures shall not at any time exceed the Forex Limit.
5.5 AVAILABILITY
The aggregate amount of:
(a) Outstanding Purchase Price;
(b) all Loans;
(c) all L/C Exposures; and
(d) all Forex Exposures,
shall not at any time exceed the sum of:
(i) the Total Receivables Availability; PLUS
(ii) the Total Stock Availability; LESS
(iii) the amount of Reserves,
at such time.
For the purposes of this Clause 5.5, RESERVES means reserves
established by Burdale from time to time:
(a) to reflect the full amount of the liabilities at such time
which have a right imposed to provide for payment ranking or
capable of ranking senior to or pari passu with the
liabilities of the Obligors under the Finance Documents and/or
having the benefit of any Security Interest over the assets of
any Obligor ranking or capable of ranking senior to or pari
passu with the Security Interests granted to Burdale under the
Finance Documents;
(b) to reflect Burdale's good faith belief that any report or
financial information provided by or on behalf of any Obligor
under the Finance Documents is or may have been incomplete,
inaccurate or misleading in any material respect; and
(c) in an amount of $1,000,000.
5.6 PROHIBITION
No Utilisation may be made which would cause the provisions of this
Clause 5 to be breached.
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5.7 PERCENTAGES
Burdale may from time to time, following prior consultation with the
Company:
(a) reduce the Purchase Price and/or the Total Receivables
Availability to the extent that the Dilution Rate has
increased;
(b) reduce the Total Stock Availability (or any component of it)
to the extent that:
(i) the number of days of the turnover of the Stock for
any period has changed in any material respect; or
(ii) the liquidation value of the Eligible Stock, or any
category of Eligible Stock, has decreased; or
(iii) the nature and quality of the Stock has deteriorated;
and
(iv) there is any change in seasonality with respect to
Stock and patterns of sales after today's date; or
(v) there is any reduction in the Facility Limit pursuant
to Clause 7.7.
6 UTILISATION OF FACILITIES
6.1 AVAILABILITY OF RECEIVABLES FINANCE FACILITY
6.1.1 Subject to the terms of this Agreement, each Facility Company shall
offer to sell its Receivables to Burdale by delivering to Burdale from
time to time duly completed Purchase Requests (together with all deeds
and documents referred to in such Purchase Request), delivery of which
shall oblige such Facility Company to sell the Receivables stated in
such Purchase Request upon the terms and subject to the conditions of
this Agreement.
6.1.2 A Purchase Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part I of Schedule 3.
6.1.3 As soon as reasonably practicable following delivery of a Purchase
Request, Burdale shall determine the Purchase Price for the Receivables
specified in such Purchase Request and will, upon being requested by
the relevant Facility Company, advise such Facility Company of such
determination.
6.2 UTILISATION OF RECEIVABLES FINANCE FACILITY AND REVOLVING CREDIT
FACILITY
6.2.1 Subject to the terms of this Agreement, each Facility Company may from
time to time request that Burdale pay sums in a Permitted Currency to
such Facility Company of up to the aggregate of (i) the amount of any
unpaid Purchase Price and (ii) the amount available for drawing by way
of Loan, by delivering a duly completed Cash Request to Burdale not
later than 11.00 a.m. on the proposed Utilisation Date for such
payment.
6.2.2 A Cash Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part II of Schedule 3
and, in particular, specifies:
(a) the proposed Utilisation Date, being a Business Day falling
during the Availability Period;
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(b) the amount and the currency of the sum to be paid by Burdale
which must be less than or equal to the aggregate of the
amounts specified in Clause 6.2.1; and
(c) if not already notified to Burdale, the details of the Other
Account into which the payment is to be made on the
Utilisation Date.
6.2.3 Payments made by Burdale pursuant to a Cash Request shall be deemed to
be first payments of any unpaid Purchase Price to the full extent of
such unpaid Purchase Price and second, to the extent of any surplus, to
be the drawing of a Loan.
6.2.4 Burdale's obligation to pay the Purchase Price of any Receivable (or
any unpaid portion of it as the case may be) shall be terminated on the
earlier of the Actual Day of Payment and the Maturity Date of such
Receivable.
6.2.5 To the extent that any payments made by Burdale pursuant to a Cash
Request to a Facility Company (the DEBTOR COMPANY) represent payment of
Purchase Price in relation to the Purchased Receivables of another
Facility Company (the CREDITOR COMPANY) then (without double counting
with the provisions of Clause 7.2(e)(ii)) the Creditor Company shall be
deemed to have made a loan to the Debtor Company in an amount equal to
the amount of such payment by Burdale and in the same currency as such
payment (an INTERCOMPANY LOAN). All Intercompany Loans shall bear
interest at such rates as the relevant Creditor Companies may agree
with the relevant Debtor Companies and all principal and interest on
any Intercompany Loan shall be payable on demand.
6.3 L/C UTILISATIONS
6.3.1 Subject to the terms of this Agreement, a Facility Company may request
the issue of an L/C by delivering a duly completed L/C Request to
Burdale not later than 11.00 a.m. on the proposed Utilisation Date for
that L/C.
6.3.2 An L/C Request will not be regarded as having been duly completed
unless it is substantially in the form attached in Part III of Schedule
3 and, in particular, specifies:
(a) the proposed Utilisation Date, being a Business Day falling
during the Availability Period;
(b) the amount of the L/C required, the L/C Exposure of which must
be equal to or less than the undrawn/unutilised amount of the
Revolving Credit Facility and within the relevant Availability
Limits as at the proposed Utilisation Date;
(c) if not already notified to Burdale, the details of the
beneficiary, payee or addressee of such L/C.
6.4 GENERAL PROVISIONS REGARDING L/Cs
6.4.1 Nothing in this Agreement shall be deemed or construed to grant any
Facility Company any right or authority to pledge the credit of Burdale
in any manner. Burdale shall have no liability of any kind with respect
to any L/C provided by an issuer other than Burdale unless Burdale has
duly executed and delivered to such issuer the application or a
guarantee or indemnification in writing with respect to such L/C. Each
Facility Company shall be bound by an interpretation made in good faith
by Burdale, or any other issuer or correspondent under or in connection
with any L/C or any documents, drafts or acceptances in relation to any
L/C, notwithstanding that such interpretation may be inconsistent with
any instructions of any Facility Company. Burdale shall have the sole
and exclusive right and authority to, and no Facility Company shall:
(a) at any time an Event of Default exists or has occurred and is
continuing:
Page 15
(i) approve or resolve any questions of non-compliance of
documents;
(ii) give any instructions as to acceptance or rejection of
any documents or goods; or
(iii) execute any and all applications for steamship or
airway guarantees, indemnities or delivery orders;
(b) at any time:
(i) grant any extensions of the maturity of, time of
payment for, or time of presentation of, any drafts,
acceptances, or documents; and
(ii) agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the
terms or conditions of any of the applications, L/Cs,
or documents, drafts or acceptances in relation to any
L/C or any letters of credit provided as security to
Burdale. Burdale may take such actions either in its
own name or in the relevant Facility Company's name.
6.4.2 Any rights, remedies, duties or obligations granted or undertaken by
any Facility Company to any issuer or correspondent in any application
for any L/C, or any other agreement in favour of any issuer or
correspondence relating to any L/C, shall be deemed to have been
granted or undertaken by such Facility Company to Burdale. Any duties
or obligations undertaken by Burdale to any issuer or correspondence in
any application for any L/C, or any other agreement by Burdale in
favour of any issuer or correspondence relating to any L/C, shall be
deemed to have been undertaken by the relevant Facility Company to
Burdale and to apply in all respects to such Facility Company.
6.4.3 None of Burdale, any L/C issuer (or any of their respective
correspondents) or any advising, negotiating or paying bank with
respect to any L/C shall be responsible in any way for:
(a) the performance by any beneficiary under any L/C of that
beneficiary's obligations to the relevant Facility Company; or
(b) the form, sufficiency, correctness, genuineness, authority of
any person signing or the legal effect of any documents called
for under any L/C if such documents appear on their face to be
in order.
6.5 FOREX UTILISATIONS
6.5.1 Subject to the terms of this Agreement, a Facility Company may request
a Utilisation of the Revolving Credit Facility by way of the sale or
purchase of Foreign Currency by delivering a duly completed Forex
Request to Burdale not later than 11.00 a.m. on the proposed date of
the contract for the sale or purchase of Foreign Currency.
6.5.2 A Forex Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part IV of Schedule 3
and, in particular, specifies:
(a) the proposed date of effect of the sale or purchase of Foreign
Currency being a Business Day falling during the Availability
Period; and
(b) the value of the contract for the sale or purchase of Foreign
Currency required and the Foreign Currency required to be
purchased which must be such that the Forex Exposure with
respect to such Utilisation when aggregated with all other
Forex Exposures is equal to or less than the Forex Limit as at
the proposed Utilisation Date.
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6.6 DEEMED UTILISATIONS
All payments made by Burdale:
(a) in accordance with the terms of any L/C or any guarantee or
indemnity given by Burdale to the issuer of any L/C (as the
case may be); and
(b) on the maturity of any Forex Transaction,
shall be deemed to be a payment to the relevant Facility Company in an
amount equal to such payment, as if such Facility Company had lodged a
Cash Request for such amount and subject to the provisions of this
Agreement with respect to Utilisations of the Receivables Finance
Facility and/or the Revolving Credit Facility (including, without
limitation, as to interest, purchase commission and repayment).
7 REPAYMENT AND PREPAYMENT
7.1 RECEIVABLES FINANCE FACILITY
7.1.1 If in relation to a Purchased Receivable Burdale determines on the
Maturity Date in respect of such Purchased Receivable that it has not
received payment in accordance with Clause 9.1 of the full amount of
such Purchased Receivable, the relevant Facility Company shall, on
demand by Burdale pay to Burdale an amount equal to the Outstanding
Purchase Price of such Purchased Receivable for which payment has not
been received PROVIDED THAT this provision shall not restrict (nor
oblige) Burdale in any way in or from pursuing and obtaining payment in
respect of such Purchased Receivable from the account debtors or
otherwise (which payment shall be made into a Blocked Account) and each
Facility Company undertakes that it will do all such reasonable acts or
things necessary or desirable to help Burdale in pursuing and obtaining
such payment.
7.1.2 Burdale shall be entitled to deduct from payments made by account
debtors and/or the Facility Companies into a Blocked Account in respect
of Purchased Receivables the then Outstanding Purchase Price in respect
of such Purchased Receivables and the balance remaining after such
deduction shall be applied in accordance with Clause 7.2.
7.2 OTHER UTILISATIONS
Subject as provided below all amounts standing to the credit of the
Blocked Accounts from time to time following the deductions referred to
in Clause 7.1.2 shall be applied as follows:
(a) FIRST in repayment of the outstanding principal amount of any
Loans;
(b) SECOND in payment of any fees, costs and expenses due from any
Obligor to Burdale under the Finance Documents;
(c) THIRD in payment of (i) all amounts of interest due on the
Loans (including any deemed borrowing pursuant to Clause 6.6)
and (ii) all Purchase Commission (or in making provision for
Purchase Commission which will fall due for payment on the
last Business Day of the current calendar month);
(d) FOURTH in or towards satisfaction of any other payment
obligation of any Obligor under the Finance Documents; and
(e) FIFTH to the relevant Facility Company by way of payment into
such Other Account as the relevant Facility Company may
specify to Burdale in writing from time to time.
Page 17
PROVIDED THAT:
(i) notwithstanding the above, at all times whilst an
Event of Default is continuing, amounts standing to
the credit of a Blocked Account shall be applied to
such of the liabilities of the Obligors under the
Finance Documents and in such order as Burdale may in
its absolute discretion determine; and
(ii) to the extent that any amount standing to the credit
of one Facility Company's Blocked Account is applied
to discharge the liabilities of another Obligor
pursuant to Clause 7.1.2 or this Clause 7.2 then
(without double counting) the provisions of Clause
6.2.5 shall apply to such application mutatis
mutandis.
7.3 CURRENCY
7.3.1 Any amount deducted by Burdale pursuant to Clause 7.1.2 shall first be
used by Burdale in or towards paying the then Outstanding Purchase
Price denominated in the same Permitted Currency as the payment from
which such deduction was made and then (at Burdale's discretion) the
remainder of any such deduction may be converted by Burdale at the
Exchange Rate and used in or towards paying the then Outstanding
Purchase Price denominated in any Permitted Currency (unless Burdale
otherwise agrees).
7.3.2 Any amount applied pursuant to Clauses 7.2(a) to 7.2(d) (inclusive)
above shall first be applied by Burdale in or towards satisfying the
obligations of the Obligors under the Finance Documents denominated in
the same Permitted Currency as the Permitted Currency of the funds so
applied and then (at Burdale's discretion) the remainder of any such
amount may be converted by Burdale at the Exchange Rate and used in or
towards satisfying any such obligations denominated in any Permitted
Currency (unless Burdale otherwise agrees).
7.4 REUTILISATION
7.4.1 RECEIVABLES FINANCE FACILITY: Subject to the terms of this Agreement,
all amounts of Outstanding Purchase Price recovered and paid to
Burdale, may be reutilised as Utilisations of the Receivables Finance
Facility.
7.4.2 REVOLVING CREDIT FACILITY: Subject to the terms of this Agreement, all
Loans repaid and all amounts recovered and paid to Burdale in relation
to L/Cs and Forex Transactions, may be redrawn or reutilised as
Utilisations of the Revolving Credit Facility.
7.5 PREPAYMENT
If at any time the outstanding Utilisations or any part of them cause
any Availability Limit to be exceeded then the Company will immediately
repay or procure repayment of such amount of the Loans together with
cash collateral in respect of Outstanding Purchase Price and/or any
contingent obligation of Burdale in relation to any L/C or other
Utilisation together with interest on the Loans, to the extent required
to ensure compliance with that Availability Limit and, until such time
as that Availability Limit is no longer breached, no further
Utilisations may be requested (including, for the avoidance of doubt,
pursuant to a Cash Request) or will, at Burdale's option, be made or
issued.
7.6 ILLEGALITY
If it becomes unlawful in any jurisdiction for Burdale to make
available or maintain the Facilities (or any of them) or to give effect
to its obligations under the Finance Documents, Burdale may give seven
Business Days written notice to that effect to the Company whereupon
the Facilities will be cancelled and all the provisions of this
Agreement will apply as if the
Page 18
cancellations or terminations had been a reduction of the Facility
Limit to zero pursuant to Clause 7.7.
7.7 REDUCTION OF FACILITY LIMIT
7.7.1 At the request of the Company by giving not less than ten Business
Day's prior written notice to Burdale, the Facility Limit may from time
to time be reduced provided that on or before the effective date for
such reduction the Company shall pay (or procure payment) to Burdale
of:
(a) such amount as may be necessary in prepayment of the Loans
and/or as cash collateral for Outstanding Purchase Price
and/or Burdale's contingent obligations under any issued L/C
or unmatured Forex Transaction to ensure that the Facility
Companies remain in compliance with the Availability Limits
(as adjusted to take account of such amendments pursuant to
Clause 5.7); and
(b) a fee of 1% of the amount of the reduction of the Facility
Limit.
7.7.2 Any exercise by Burdale of its rights under Clause 16.2(b) and/or 16.3
and/or the operation of Clause 7.6 shall be deemed for the purposes of
paragraph 7.7.1(b) above to be a reduction in the Facility Limit in an
amount equal to the amount of the Facility or Facilities so cancelled.
7.8 FINAL REPAYMENT
The Company will, on the Final Repayment Date, pay (or procure payment)
to Burdale in full all outstanding and unpaid liabilities under the
Finance Documents (whether by way of principal, interest, commission,
fees, costs, expenses or otherwise) and shall pay to Burdale such
amount as is necessary to provide full cash collateral for Outstanding
Purchase Price and any contingent obligations which Burdale may have in
respect of any L/C, Forex Transaction or other outstanding Utilisation.
If the amounts so paid are received by Burdale later than 1.00 p.m. on
the Final Repayment Date then the Company will pay interest on such
amounts to Burdale at the Default Rate until payment has been made in
full.
7.9 CASH COLLATERAL
If under this Agreement any Facility Company is required to provide and
does provide cash collateral for any contingent liability, such cash
collateral shall be held by Burdale in an interest bearing account for
application against such contingent liability, provided that any sum
remaining after settling such payments shall be applied first in
settlement of any other amounts then due and payable to Burdale under
the Finance Documents and any balance shall be promptly repaid to the
relevant Facility Company or other person entitled to the balance.
8 INTEREST AND COMMISSION
8.1 INTEREST
8.1.1 Each Facility Company will pay Burdale interest on each Loan made to it
by Burdale at the Interest Rate.
8.1.2 Except as otherwise provided in this Agreement, accrued interest on
each Loan shall be paid by the relevant Facility Company in arrear on
the last Business Day of each month and on the Final Repayment Date.
All interest accruing on or after the date of any Event of Default or
the Final Repayment Date shall be payable on demand.
8.1.3 Interest will be calculated on the basis of a 365 day year and actual
days elapsed and will accrue and be calculated on a daily basis.
Page 19
8.2 PURCHASE COMMISSION
Each Facility Company shall pay to Burdale commission in respect of
each of its Purchased Receivables at a rate equivalent to the Interest
Rate applied to the Outstanding Purchase Price for such Receivable from
the date on which Burdale paid such Purchase Price to a Facility
Company down to the Actual Day of Payment (the PURCHASE COMMISSION).
Burdale shall calculate the Purchase Commission on a daily basis and it
shall be paid by the relevant Facility Company monthly in arrears on
the last Business Day of each month.
8.3 DEFAULT INTEREST
8.3.1 Upon the occurrence of an Event of Default and whilst the same is
continuing, all amounts outstanding under this Agreement shall bear
interest (both before and after judgment) at the Default Rate.
8.3.2 Interest at the Default Rate will be compounded at the end of each
period designated by Burdale and will be determined by Burdale on the
first Business Day of each such period.
9 COLLECTION OF RECEIVABLES
9.1 FLOW OF FUNDS
Subject to Clause 9.2, each Facility Company undertakes that during the
period commencing on the date of this Agreement and ending when all its
liabilities under the Finance Documents have been discharged in full
and Burdale is under no further obligation under any of the Finance
Documents:
(a) such Facility Company will collect as agent and trustee for
Burdale all Receivables and immediately pay (or procure that
payment is made) all amounts due in respect of each Receivable
into a Blocked Account, provided however that until payment
into a Blocked Account it will hold all money so received upon
trust for Burdale and will not commingle in any Charged
Account any monies which are not Receivables or which are not
payable to Burdale;
(b) without prejudice to its obligations under Clause 13.14, in
the event that any account debtor makes a payment in respect
of Receivables into another Charged Account or other account
which is not a Blocked Account, such Facility Company will
ensure that the amounts representing such payment are promptly
transferred into a Blocked Account and will immediately direct
the relevant account debtor to make all future payments to a
Blocked Account; and
(c) all the transfers and collections referred to in paragraphs
(a) and (b) above shall be carried out daily prior to the
occurrence of any Default and thereafter at such intervals as
Burdale may, at its discretion, specify to the Company.
9.2 FAILURE OF DEBENTURE
In the event that the Debenture is not, at any time, effective or is
not in full force and effect in respect of any Charged Account, each
Facility Company will (unless otherwise directed by Burdale and without
prejudice to Burdale's rights and remedies under the Finance
Documents), for so long as the Debenture is ineffective or not in full
force and effect and ending on the date when all of its liabilities
under the Finance Documents have been repaid or discharged in full and
Burdale is under no further obligation under any of the Finance
Documents, collect as agent and trustee for Burdale all Receivables
which would otherwise have been payable into a
Page 20
Blocked Account and immediately pay (or procure the payment of) all
amounts due in respect of those Receivables directly to such bank
account of Burdale as it may specify for this purpose.
9.3 DECLARATION OF TRUST
If for any reason (including, without limitation, any prohibition or
restriction on assignment contained in any agreement between a Facility
Company and the relevant account debtor), title to any Receivable which
is purchased by Burdale under this Agreement does not pass to Burdale
then the relevant Facility Company shall hold such Receivable on trust
for Burdale and shall collect and deal with such Receivable in
accordance with the terms of Clauses 9.1 and 9.2.
9.4 REIMBURSEMENT
Each Facility Company agrees to reimburse Burdale on demand for any
liability of Burdale to any bank or other person involved in the
transfer of funds to or from any Blocked Account arising out of
Burdale's payments to or indemnification of that bank or person, and
this obligation to reimburse shall survive the termination or
non-renewal of this Agreement.
9.5 APPLICATION
For the purposes of calculating the amount of the Loans available to
the Facility Companies, the Receivables Limit and the Forex Limit such
payments will be applied (conditional upon final collection) in
satisfaction or reduction of the relevant Facility Company's
liabilities under the Finance Documents on the Business Day of receipt
by Burdale. For the purposes of calculating interest in respect of the
Loans and for calculating any Purchase Commission or commission in
respect of the Forex Transactions, payments or other funds received by
Burdale will be applied (conditional upon final collection) in
satisfaction or reduction of the relevant Facility Company's
liabilities under the Finance Documents one Business Day following the
date of receipt of funds by Burdale.
9.6 BUSINESS DAYS
If any payment under the Finance Documents would otherwise be due on a
day which is not a Business Day, it will be due on the next succeeding
Business Day or, if that Business Day falls in the following month, on
the preceding Business Day.
10 TAX
10.1 TAX GROSS-UP
10.1.1 Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
10.1.2 The Company shall promptly upon becoming aware that an Obligor must
make a Tax Deduction (or that there is any change in the rate or the
basis of a Tax Deduction) notify Burdale accordingly.
10.1.3 If a Tax Deduction is required by law to be made by an Obligor the
amount of the payment due from that Obligor shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required.
10.1.4 If an Obligor is required to make a Tax Deduction, that Obligor shall
make that Tax Deduction and any payment required in connection with
that Tax Deduction within the time allowed and in the minimum amount
required by law.
Page 21
10.1.5 Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making that
Tax Deduction shall deliver to Burdale evidence reasonably satisfactory
to Burdale that the Tax Deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.
10.2 TAX INDEMNITY
10.2.1 The Company shall (within three Business Days of demand by Burdale) pay
to Burdale an amount equal to the loss, liability or cost which Burdale
determines will be or has been (directly or indirectly) suffered for or
on account of Tax.
10.2.2 Paragraph 10.2.1 above shall not apply with respect to any Tax assessed
on Burdale if that Tax is imposed on or calculated by reference to the
net income received or receivable (but not any sum deemed to be
received or receivable) by Burdale.
10.3 TAX CREDIT
If an Obligor makes a Tax Payment and Burdale determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) it has obtained, utilised and retained that Tax Credit,
Burdale shall pay an amount to the Obligor which Burdale determines
will leave it (after that payment) in the same after-Tax position as it
would have been in had the Tax Payment not been made by the Obligor.
10.4 STAMP TAXES
The Company shall pay and, within three Business Days of demand,
indemnify Burdale against any cost, loss or liability that Burdale
incurs in relation to all stamp duty, registration and other similar
Taxes payable in respect of any Finance Document.
10.5 VALUE ADDED TAX
10.5.1 All consideration payable under a Finance Document by an Obligor to
Burdale shall be deemed to be exclusive of any VAT. If VAT is
chargeable, the Obligor shall pay to Burdale (in addition to and at the
same time as paying the consideration) an amount equal to the amount of
the VAT.
10.5.2 Where a Finance Document requires an Obligor to reimburse Burdale for
any costs or expenses, that Obligor shall also at the same time pay and
indemnify Burdale against all VAT incurred by Burdale in respect of the
costs or expenses save to the extent that Burdale is entitled to
repayment or credit in respect of the VAT.
11 INCREASED COSTS
11.1 INCREASED COSTS
11.1.1 Subject to Clause 11.3 the Company shall, within three Business Days of
a demand by Burdale, pay to Burdale the amount of any Increased Costs
incurred by Burdale or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation or
application of) any law or regulation or (ii) compliance with any law
or regulation made after the date of this Agreement.
11.1.2 In this Agreement INCREASED COSTS means:
Page 22
(a) a reduction in the rate of return from the Facilities (or any
of them) or on Burdale's (or its Affiliate's) overall capital;
(b) an additional or increased cost; or
(c) a reduction of any amount due and payable under any Finance
Document,
which is incurred or suffered by Burdale or any of its Affiliates to
the extent that it is attributable to Burdale having entered into this
Agreement or funding or performing its obligations under any Finance
Document.
11.2 INCREASED COST CLAIMS
If Burdale intends to make a claim pursuant to Clause 11.1 it shall
notify the Company of the event giving rise to the claim, and shall, as
soon as practicable after a demand by the Company, provide a
certificate confirming the amount of its Increased Costs.
11.3 EXCEPTIONS
Clause 11.1 does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by
an Obligor;
(b) compensated for by Clause 10.2 (or would have been compensated
for under Clause 10.2 but was not so compensated solely
because the exclusion in Clause 10.2.2 applied);
(c) compensated for by the payment of MLA Cost; or
(d) attributable to the wilful breach by Burdale or its Affiliates
of any law or regulation.
12 REPRESENTATIONS AND WARRANTIES
12.1 WARRANTIES
Each Obligor makes the representations and warranties in this Clause 12
to Burdale on today's date and such representations and warranties will
be deemed repeated by the Obligors on each date:
(a) on which a Request is submitted;
(b) which is a Utilisation Date;
(c) on which any payment of interest or Purchase Commission is due
under the Finance Documents,
as if made with reference to the facts and circumstances existing on
such date.
12.2 STATUS
12.2.1 It is a corporation, duly incorporated and validly existing under the
law of its jurisdiction of incorporation.
12.2.2 It has the power to own its assets and carry on its business as it is
being conducted.
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12.3 BINDING OBLIGATIONS
The obligations expressed to be assumed by it in each Finance Document
are, subject to any principles of law affecting creditors' rights
generally, legal, valid, binding and enforceable obligations.
12.4 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not conflict
with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its
assets.
12.5 POWER AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery
of, the Finance Documents to which it is a party and the transactions
contemplated by those Finance Documents.
12.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and
comply with its obligations in the Finance Documents to which
it is a party; and
(b) to make the Finance Documents to which it is a party
admissible in evidence in its jurisdiction of incorporation,
have been obtained or effected and are in full force and effect.
12.7 NO FILING OR STAMP TAXES
Under the law of its jurisdiction of incorporation it is not necessary
that the Finance Documents be filed, recorded or enrolled with any
court or other authority in that jurisdiction or that any stamp,
registration or similar tax be paid on or in relation to the Finance
Documents or the transactions contemplated by the Finance Documents.
12.8 NO DEFAULT
12.8.1 No Event of Default is continuing or might reasonably be expected to
result from the making of any Utilisation.
12.8.2 No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it
or to which its assets are subject which might have a Material Adverse
Effect.
12.9 PARI PASSU RANKING
Its payment obligations under the Finance Documents rank at least pari
passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying
to companies generally.
Page 24
12.10 NO PROCEEDINGS PENDING OR THREATENED
No litigation, arbitration or administrative proceedings of or before
any court, arbitral body or agency which, if adversely determined,
might reasonably be expected to have a Material Adverse Effect have (to
the best of its knowledge and belief) been started or threatened
against it or any of its Subsidiaries.
12.11 MATERIAL DISCLOSURES
All information furnished by or on behalf of any Obligor in writing to
Burdale in connection with the Finance Documents is true and correct in
all material respects as of the date such information is dated or
certified and does not omit any material information and is not
misleading. No event or circumstance has occurred which has or could
reasonably be expected to have a Material Adverse Effect which has not
been fully and accurately disclosed to Burdale.
12.12 FINANCIAL STATEMENTS
Its latest audited financial statements (i) have been reported upon by
its auditors without qualification, (ii) have been prepared in
accordance with GAAP and give a true and fair view of the results of
its operations and its assets and liabilities for the relevant period
and of the state of its affairs at the relevant date, and (iii) in
particular, accurately disclose or reserve against all liabilities
(actual or contingent), and there has been no change in its assets,
financial condition or prospects since the date of those financial
statements such that it may reasonably be expected to be unable to
perform and comply with any one or more of its material obligations
under any of the Finance Documents.
12.13 BANK ACCOUNTS
All the accounts maintained or used by any Obligor at any bank or
financial institution as at the date of this Agreement have been
included within the definition of Charged Accounts.
13 GENERAL UNDERTAKINGS
13.1 DURATION
The undertakings in this Clause 13 and in Clause 14 remain in force
from the date of this Agreement for so long as any amount is
outstanding under the Finance Documents or Burdale is under any
obligation under any Finance Document.
13.2 AUTHORISATIONS
Each Obligor shall promptly:
(a) obtain, comply with and do all that is necessary to maintain
in full force and effect; and
(b) supply certified copies to Burdale of,
any authorisation required under any law or regulation of its
jurisdiction of incorporation to enable it to perform its obligations
under the Finance Documents and to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of
incorporation of any Finance Document.
Page 25
13.3 COMPLIANCE WITH LAWS
Each Obligor shall comply in all respects with all laws to which it may
be subject, if failure so to comply would materially impair its ability
to perform its obligations under the Finance Documents.
13.4 NEGATIVE PLEDGE
13.4.1 No Obligor shall create or permit to subsist any Security Interest over
any of its assets.
13.4.2 No Obligor shall:
(a) sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by
an Obligor;
(b) sell, transfer or otherwise dispose of any of its receivables
on recourse terms otherwise than pursuant to the Finance
Documents;
(c) enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made
subject to a combination of accounts; or
(d) enter into any other preferential arrangement having a similar
effect,
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing
the acquisition of an asset.
13.4.3 Paragraphs 13.4.1 and 13.4.2 above do not apply to:
(a) any lien arising by operation of law and in the ordinary
course of trading;
(b) any Security Interest in favour of Burdale.
13.5 MERGER
No Obligor shall enter into any amalgamation, demerger, merger or
corporate reconstruction.
13.6 CHANGE OF BUSINESS
The Company shall procure that no substantial change is made to the
general nature of the business of the Company or any Obligor from that
carried on at the date of this Agreement.
13.7 DEFAULT
Each Obligor will notify Burdale forthwith upon becoming aware of the
occurrence of any Default and will provide Burdale with full details of
any steps which it is taking, or is considering taking, in order to
remedy or mitigate the effect of the Default.
13.8 DISPOSALS
No Obligor shall enter into a single transaction or series of
transactions (whether related or not) and whether voluntary or
involuntary to sell, lease, transfer or otherwise dispose of any asset
save for:
(a) the disposal of Stock in the ordinary course of trading; or
Page 26
(b) the application of cash in the purchase or acquisition of
goods and services in the ordinary course of trading or in any
manner not prohibited by any of the Finance Documents; or
(c) the disposal of obsolete assets where the proceeds of sale (if
any) are paid into a Blocked Account; or
(d) any disposal in respect of which Burdale has given its prior
written consent; or
(e) a disposal of the real property owned by the Company at
Xxxxxxxx, Manchester provided that:
(i) any such disposal is on arm's length commercial terms
to an unrelated third party;
(ii) no Default is continuing at the time of any such
disposal; and
(iii) all proceeds of sale arising on any such disposal
(less the L 300,000 payable to the Trustees under the
Trustee Agreement) are paid into a Blocked Account; or
(f) the disposal of any asset where the higher of market value or
consideration receivable (when aggregated with the higher of
market value or consideration receivable for any other sale,
lease, transfer or other disposal (other than any permitted
under paragraphs (a) to (e) above)) does not exceed $15,000
(or its equivalent in another currency or currencies) in any
financial year and the proceeds of sale are paid into a
Blocked Account.
13.9 ACQUISITIONS
No Obligor will, except in the ordinary course of its trade acquire any
business, undertaking or assets of any kind whatsoever.
13.10 INTRA-GROUP ARRANGEMENTS
No Obligor will, without obtaining Burdale's prior written consent:
(a) pay any dividend or make any other distribution of any of its
assets to its shareholders or any of them; or
(b) pay any other moneys, whether by way of interest, management
fees or otherwise howsoever, to any affiliate, subsidiary or
any shareholder, director or employee except for payments in
the ordinary course of, and pursuant to the reasonable
requirements of, trading and on arms length commercial terms
unless immediately following the making of any such payment
the amount available for Utilisation (less the aggregate
amount of Past Due Payables) would be at least $1,000,000.; or
(c) redeem any of its ordinary or preference share capital.
13.11 AUDITS BY BURDALE
Each Obligor will permit Burdale or its appointed representatives or
agents at the relevant Obligor's expense to conduct an audit of its
financial records, systems and forecasts on a quarterly basis or,
following a Default at more frequent intervals as Burdale may stipulate
and will afford all co-operation to Burdale and its representatives or
agents to enable such audit to take place.
Page 27
13.12 FINANCIAL INDEBTEDNESS
No Obligor will incur any Financial Indebtedness other than:
(a) under the Finance Documents;
(b) under the Trustee Agreement and the Trustee Mortgage for such
time as the Deed of Priorities is in full force and effect;
(c) normal trade credit granted to it in the ordinary course of
business;
(d) equipment, vehicle and operating leases and hire purchase
transactions entered into in the ordinary course of business
where the total annual Financial Indebtedness for such leases
and transactions for the Obligors as a whole does not exceed
$50,000 at any one time; or
(e) with respect to loans made to it by another Obligor which is a
Chargor under the Debenture.
13.13 MAKING LOANS
No Obligor will be a creditor with respect to any Financial
Indebtedness except for:
(a) the grant of normal trade credit in the ordinary course of its
trade;
(b) loans made by it to another Obligor which is a Chargor under
the Debenture; and
(c) loans made by the Company to Xxxxxx US:
(i) in an amount not exceeding $5,600,000 out of the first
Utilisations; and
(ii) thereafter, provided that:
(aa) for the period of 30 days immediately
preceding the making of any such loan the
minimum amount available for Utilisation was;
and
(bb) following the making of any such loan the
amount available for Utilisation would be,
(in each case, less the aggregate of all Past Due
Payables) at least $1,000,000.
13.14 BANK ACCOUNTS
No Obligor will, open or maintain any account of any type with any bank
or financial institution providing like services other than the Charged
Accounts.
13.15 INSURANCE
Each Obligor will:
(a) as regards all its assets and property of any kind and
businesses arrange and maintain in full force and effect
insurances (including consequential loss, business
interruption and public liability and damage and other
insurances usually maintained by companies carrying on the
same type of business as its own business) with such insurers
as Burdale approves and on such terms and in such amounts as
Burdale may reasonably require and
Page 28
is customary for an enterprise engaged in the same or similar
business and in the same or similar localities and against
such risks as Burdale shall reasonably request;
(b) procure that Burdale's interest is noted on all policies
relating to insurances so arranged in such manner as Burdale
may in its absolute discretion require and will use all
reasonable endeavours to ensure that Burdale is named as sole
loss payee (but without having any obligation for premiums);
(c) ensure that every policy of insurance contains a standard
mortgagee clause, whereby such insurance will not be
invalidated, vitiated or avoided as against a mortgagee in the
event of any misrepresentation, act, neglect or failure to
disclose on the part of the insured provided that where the
insurers will not agree such terms, terms acceptable to
Burdale in Burdale's absolute discretion are agreed; and
(d) will supply to Burdale copies of all such policies of
insurance and all endorsements and renewals of such policies;
(e) duly and punctually pay all premiums in respect of its
insurances and not do or omit to do any act, matter or thing
whereby any such insurance may be or becomes void or voidable
at the option of the insurers or settle any claim in respect
of those insurances without the prior written consent of
Burdale, such consent not to be unreasonably withheld or
delayed;
(f) it shall comply with, enforce and not waive, release,
terminate or vary (or agree so to do) any obligations arising
under all policies of insurance and in particular, but without
limitation, it shall notify Burdale immediately upon receiving
notice from any insurer that the details of any insurance
policy are to change in any way and upon receiving notice from
any insurer terminating any insurance policies;
(g) in the event that it receives from any insurer notice that
such insurer is terminating any insurance policy, it shall use
all reasonable endeavours to enter into an agreement on
substantially the same terms as those contained in the
original insurance policy with such other insurer as approved
by Burdale and to the extent that the same terms or
substantially the same terms are not available from the
insurer, such terms as are acceptable to Burdale in its
absolute discretion, to take effect on or before the expiry of
such notice and shall use all reasonable endeavours to procure
that such insurer gives to Burdale such acknowledgements and
undertakings in relation to this Agreement as Burdale may in
its absolute discretion require;
(h) produce to Burdale on request copies of all policies and all
receipts for the current premiums with respect to the
insurance; and
(i) immediately give notice to Burdale of any occurrence which
gives rise, or might give rise, to a claim under any policy of
insurance.
If any Obligor at any time fails to perform any of its obligations
contained in this Clause, Burdale may effect or renew such insurance as
Burdale thinks fit and such Obligor shall reimburse Burdale for the
costs thereby incurred on demand.
13.16 FINANCIAL YEAR END AND CHANGE OF AUDITORS
Except with the prior written consent of Burdale (not to be
unreasonably withheld or delayed), no Obligor will alter its financial
year end from that applicable at the date of this Agreement and each
Obligor will procure that it has at all times appointed as its auditors
a firm of auditors which is acceptable to Burdale.
Page 29
13.17 TAXES
Each Obligor will promptly pay all Taxes as and when they fall due
(other than in circumstances where such Taxes are the subject of a
dispute being carried on properly and in good faith by the relevant
Obligor where written details of such dispute have been supplied to
Burdale (if requested, Burdale having been notified of the dispute) or,
in the case of PAYE and National Insurance contributions, within any
permitted grace period or, in the case of any other taxes, in
accordance with any other arrangements agreed with the Inland Revenue
or other taxing authority.
13.18 CHANGE OF NAME
No Obligor will change its name without giving Burdale 30 days' prior
written notice of the proposed new name and will supply a copy of the
relevant certificate of incorporation on change of name to Burdale as
soon as it becomes available.
13.19 NEW LOCATIONS
No Obligor will move any of its assets to any new location without
giving Burdale 30 days' prior written notice of the new location and
executing and delivering to Burdale such access agreements, landlord
waivers and other documents as Burdale may reasonably require in order
to protect its interest in such assets.
13.20 STAMP DUTY
Each Obligor will promptly pay any liability incurred in respect of any
stamp, registration and similar Tax which is or becomes payable in
connection with the entry into, registration, performance, enforcement
or admissibility in evidence of any Finance Document and/or any
amendment, supplement or waiver of any Finance Document. In the event
of any breach of this undertaking the relevant Obligor shall
immediately pay to Burdale by way of liquidated damages the amount of
any liability that Burdale may incur as a result of or by reference to
such Obligor's delay in paying or omission to pay any such Tax.
13.21 FINANCIAL COVENANTS
13.21.1 The Company shall procure that Consolidated Tangible Net Worth is at
all times at least equal to $17,500,000.
13.21.2 The Company shall procure that, as at the end of each month (each a
TEST DATE), Trading Cashflow for the period of 12 months ending on such
Test Date (but ignoring any period prior to the date of this Agreement)
is not less than $nil.
13.22 ADDITIONAL SECURITY DOCUMENTS
The Company shall procure that the documents, evidence and other items
specified in Part II of Schedule 2 are delivered to Burdale (in a form
and substance satisfactory to Burdale) on the DIP Financing Date.
13.23 ROT SUPPLIERS
The Company shall within 10 Business Days deliver to Burdale a list of
all suppliers to the Obligors whose terms of business include retention
of title provisions.
Page 30
14 INFORMATION AND ASSET UNDERTAKINGS
14.1 FINANCIAL INFORMATION
The Company shall supply to Burdale:
(a) as soon as the same become available, but in any event within
120 days after the end of each of its financial years:
(i) its audited consolidated financial statements for that
financial year; and
(ii) the audited financial statements of each Obligor for
that financial year; and
(b) as soon as practicable and in any event within 30 days from
the end of each monthly management accounting period and in
each case in a format satisfactory to Burdale, full individual
and, if applicable, consolidated accounts in each case
prepared in Sterling in respect of that period for itself and
each other Obligor including Stock figures and valuations for
that month, a breakdown of the value and identity of
preferential creditors for that month (in substantially the
form set out in Part II of Schedule 4) and details of all
input and output VAT together with such calculations as may be
necessary to establish whether the Company is in compliance
with Clause 13.21;
(c) copies of all notices, circulars, reports and statements sent
to any Obligor's shareholders or creditors generally (or any
class of them) at the same time as they are made available to
such shareholders or creditors; and
(d) such further information relating to the financial condition
or operations of it or any Obligor which Burdale may
reasonably require at such time as Burdale may reasonably
require it.
14.2 REQUIREMENTS AS TO FINANCIAL STATEMENTS
Each set of financial statements delivered by the Company pursuant to
Clause 14.1 shall be certified by a director of the relevant company as
fairly representing its financial condition as at the date as at which
those financial statements were drawn up and the Company shall procure
that each set of financial statements delivered pursuant to Clause 14.1
is prepared using GAAP and consistently with the policies and practices
adopted by the relevant company for the preparation of such accounts as
at today's date.
14.3 REPORTING REGARDING RECEIVABLES, STOCK AND EQUIPMENT
Each Facility Company will provide Burdale with the following documents
with all amounts expressed in Sterling and otherwise in a form
satisfactory to Burdale:
(a) on a daily basis with a schedule of Receivables, collections
received and credits issued and on a weekly basis with a stock
report substantially in the form set out in Part I of Schedule
4 and on an annual basis with an Equipment report together
with such further information reports and copies of documents
regarding Receivables, Stock and Equipment as Burdale may from
time to time reasonably request;
(b) as soon as practicable and in any event within 15 days of the
end of each month or more frequently as Burdale may reasonably
request:
(i) ageings of creditors and Receivables with details of
all dated invoices;
(ii) full details of all Stock by category, location and
supplier; and
Page 31
(iii) reconciliations of Stock and Receivables listings to
the nominal ledger and the management accounts,
all in a format to be agreed with Burdale (acting reasonably).
(c) on a daily basis, details of any Receivables which have become
or are purported to be, by the relevant account debtor or
otherwise, subject to any prohibitions or restriction on
charge or assignment; and
(d) immediately upon becoming aware of the same, details of any
creditor of any Obligor whose ordinary terms of business
include title retention provisions which have not already been
notified to Burdale.
14.4 REPORTING REGARDING ACCOUNT DEBTORS
14.4.1 NOTIFICATION: Each Facility Company will notify Burdale promptly of:
(a) any material delay in such Facility Company's performance of
any of its obligations to any account debtor or the assertion
of any claims, offsets, defences or counterclaims by any
account debtor, or any material disputes with account debtors,
or any settlement, adjustment or compromise of any such
matter;
(b) all material adverse information known to such Facility
Company relating to the financial condition of any account
debtor; and
(c) any event or circumstance which, to such Facility Company's
knowledge, would cause Burdale to consider any then existing
Receivables as no longer constituting Eligible Receivables.
14.4.2 DISPUTES AND SETTLEMENTS WITH ACCOUNT DEBTORS: No credit, discount,
allowance or extension or agreement for any of the foregoing will be
granted to any account debtor without Burdale's consent, except in the
ordinary course of the relevant Facility Company's business in
accordance with proper practices and policies operated by the relevant
Facility Company prior to the date of this Agreement. At any time while
an Event of Default is continuing, Burdale will, at its option, have
the exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with any account debtor and to grant any
credits, discounts or allowances in relation to such matters.
14.4.3 RETURN OF STOCK: Each Facility Company will promptly report to Burdale
any return of Stock by an account debtor where that Stock has a value
in excess of $75,000. At any time that any Stock (irrespective of its
value) is returned, reclaimed or repossessed, the related Receivable
will be deemed not to be an Eligible Receivable. In the event any
account debtor returns Stock when an Event of Default has occurred and
is continuing, such Facility Company will, upon Burdale's request:
(a) hold the returned Stock on trust for Burdale;
(b) segregate all returned Stock from all of its other property;
(c) dispose of the returned Stock solely according to Burdale's
instructions; and
(d) not issue any credits, discounts or allowances with respect to
such returned stock without Burdale's prior written consent.
Page 32
14.5 VERIFICATION
Burdale will have the right from time to time, in the name of any
nominee, to verify the validity, amount or any other matter relating to
any Receivable or other asset of any Obligor, by mail, telephone,
facsimile or otherwise.
14.6 RIGHTS AFTER A DEFAULT
14.6.1 DEALING WITH ASSETS: Burdale may, at any time that a Default has
occurred and is continuing and without prejudice to any of its rights
under Clause 16.2 or otherwise under this Agreement or any other
Finance Document:
(a) extend the time of payment of, compromise, settle or adjust
for cash, credit, return of merchandise or otherwise, and upon
any terms or conditions, any and all Receivables and thereby
discharge or release any account debtor or any other party or
parties in any way liable for payment of any Receivable
without affecting any of the Receivables, demand or enforce
payment of any Receivables, but without any duty to do so, and
Burdale will not be liable for its failure to enforce the
payment of any Receivable nor for the negligence of its agents
or attorneys with respect to any Receivable; and
(b) take whatever other action Burdale may deem necessary for the
protection of its interests in any assets subject to a
Security Interest under the Security Documents.
14.6.2 NOTICE TO DEBTORS: At any time that a Default is continuing, Burdale or
its nominee may, at Burdale's discretion as the case may be do any of
the following:
(a) having given prior notification to the Company, notify any or
all account debtors that the Receivables have been assigned to
Burdale and that payments in respect of Receivables are to be
redirected to such account as is specified by Burdale;
(b) request the relevant Facility Company to give the notification
referred to in Clause 14.6.2(a) above and/or to ensure that
all invoices and statements in respect of Receivables issued
to the account debtors state the information referred to in
Clause 14.6.2(a); and
(c) direct any or all relevant account debtors to make all
payments in respect of Receivables direct to Burdale at such
account as Burdale may specify.
14.6.3 ORIGINALS: At any time that an Event of Default is continuing, each
Facility Company will deliver to Burdale the originals of all documents
evidencing the sale and delivery of goods or the performance of
services giving rise to any Receivables as Burdale may require.
14.7 UNDERTAKINGS REGARDING STOCK
With respect to the Stock:
(a) each Facility Company will at all times maintain perpetual
stock records reasonably satisfactory to Burdale, keeping
correct and accurate records itemising and describing the
kind, type, quality and quantity of Stock, such Facility
Company's cost in relation to such Stock and daily withdrawals
from and additions to the Stock;
(b) each Facility Company will conduct a physical count of the
Stock at least once each year and at any time or times as
Burdale may request while an Event of Default is continuing,
and promptly following such physical count will supply Burdale
with a report in a form and containing such specific
information as may be reasonably satisfactory to Burdale
concerning such physical count;
Page 33
(c) no Facility Company will remove any Stock from property which
is owned and controlled by it or any other Obligor or to or
from a public warehouse without the prior written consent of
Burdale, except for sales of Stock in the ordinary course of
the relevant Facility Company's trade and except to move Stock
directly from such property to another location previously
agreed to by Burdale;
(d) upon Burdale's request, each Facility Company will, at its
expense, not more than once in any twelve month period, but at
any time or times as Burdale may request while an Event of
Default is continuing, deliver or cause to be delivered to
Burdale written reports or appraisals regarding the Stock in
form and substance acceptable to Burdale and by an appraiser
acceptable to Burdale, addressed to Burdale and upon which
Burdale is expressly permitted to rely;
(e) each Facility Company will produce, use, store and maintain
the Stock with all reasonable care and caution and in
accordance with applicable standards relating to any insurance
and in conformity with applicable laws and regulations;
(f) each Facility Company assumes all responsibility and liability
arising from or relating to the production, use, sale or other
disposition of the Stock;
(g) in respect of Stock exceeding $15,000, no Facility Company
will, without prior notice to Burdale, sell such Stock to any
customer on sale or return, or on any other basis which
entitles the customer to return or may oblige such Facility
Company or any other Obligor to repurchase such Stock; and
(h) each Facility Company will keep the Stock in good and
marketable condition and will not, without the prior written
consent of Burdale, acquire or accept any consignment Stock.
14.8 BURDALE'S RIGHT TO CURE
Burdale may, at its option:
(a) after giving five days notice to the Company, cure any default
by any Facility Company under any agreement with an account
debtor in respect of a Receivable (other than bona fide
disputes in the ordinary course of the relevant Facility
Company's business where no Event of Default has occurred and
is continuing) or under any other agreement with a third party
as may be required by Burdale in good faith to facilitate the
collection of the Receivables or to enable Burdale to have
access to any assets subject to a Security Interest under the
Security Documents;
(b) after giving five days notice to the Company, pay or make a
bond in respect of or appeal any judgment entered into against
any Facility Company which, upon execution, attachment or the
exercise of any similar remedy in respect of such judgment,
would result in a Security Interest being imposed on the
assets of any Obligor or would impair Burdale's ability to
obtain possession of, realise or collect any assets subject to
a Security Interest under the Security Documents;
(c) discharge taxes, Security Interests or other encumbrances at
any time levied on or existing with respect to any assets of
any Obligor; and
(d) pay any amount, incur any expense or perform any act including
without limitation the payment to any creditors in respect of
plant and/or machinery, which, in Burdale's judgment, is
necessary or appropriate to reserve, protect, insure or
maintain the assets
Page 34
subject to a Security Interest under the Security Documents
and the rights of Burdale with respect to them.
Any monies so expended or costs so incurred by Burdale shall be
repayable by the relevant Obligor on demand. Burdale will be under no
obligation to effect any such cure or payment or incur any such cost
and will not, by doing so, be deemed to have assumed any obligation or
liability of the Facility Company. Any payment made or other action
taken by Burdale under this Clause will be without prejudice to any
right it may have to assert an Event of Default under this Agreement
and to proceed accordingly.
14.9 ACCESS TO PROPERTY
From time to time as requested by Burdale on one Business Day's notice
except in the case of emergency as determined by Burdale (but subject
to Clause 17.1(d) regarding daily charge rates), at the cost and
expense of the Company:
(a) Burdale or its nominee will have complete access to all of
each Obligor's premises during normal business hours and
having given prior notice to the Company, or at any time and
without notice to the Company if an Event of Default is
continuing, for the purposes of inspecting, verifying and
auditing the Obligors' books, records and assets;
(b) each Obligor will promptly furnish to Burdale or any such
nominee such copies of or extracts from such books and records
as may be reasonably requested from any Obligor.
15 GUARANTEE AND INDEMNITY
15.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to Burdale punctual performance by each Facility
Company of all that Facility Company's obligations under the
Finance Documents;
(b) undertakes with Burdale that whenever a Facility Company does
not pay any amount when due under or in connection with any
Finance Document, that Guarantor shall immediately on demand
pay that amount as if it was the principal obligor; and
(c) indemnifies Burdale immediately on demand against any cost,
loss or liability suffered by Burdale if any obligation
guaranteed by it is or becomes unenforceable, invalid or
illegal. The amount of the cost, loss or liability shall be
equal to the amount which Burdale would otherwise have been
entitled to recover.
15.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance
Documents, regardless of any intermediate payment or discharge in whole
or in part.
15.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by Burdale (whether
in respect of the obligations of any Obligor or any security for those
obligations or otherwise) is avoided or reduced as a result of
insolvency or any similar event:
Page 35
(a) the liability of each Obligor shall continue as if the
payment, discharge, avoidance or reduction had not occurred;
and
(b) Burdale shall be entitled to recover the value or amount of
that security or payment from each Obligor, as if the payment,
discharge, avoidance or reduction had not occurred.
15.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 15 will not be
affected by an act, omission, matter or thing which, but for this
Clause, would reduce, release or prejudice any of its obligations under
this Clause 15 (without limitation and whether or not known to it or
Burdale) including:
(a) any time, waiver or consent granted to, or composition with,
any Obligor or other person;
(b) the release of any other Obligor or any other person under the
terms of any composition or arrangement with any creditor of
any Obligor or any other person;
(c) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any
Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full
value of any security;
(d) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or
status of an Obligor or any other person;
(e) any amendment (however fundamental) or replacement of a
Finance Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security; or
(g) any insolvency or similar proceedings.
15.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring Burdale
to proceed against or enforce any other rights or security or claim
payment from any person before claiming from that Guarantor under this
Clause 15. This waiver applies irrespective of any law or any provision
of a Finance Document to the contrary.
15.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, Burdale may:
(a) refrain from applying or enforcing any other moneys, security
or rights held or received by Burdale in respect of those
amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or
otherwise) and no Guarantor shall be entitled to the benefit
of the same; and
(b) hold in an interest-bearing suspense account any moneys
received from any Guarantor or on account of any Guarantor's
liability under this Clause 15.
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15.7 DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full and unless Burdale otherwise directs, no Guarantor will
exercise any rights which it may have by reason of performance by it of
its obligations under the Finance Documents:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any
Obligor's obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any of Burdale's rights under the
Finance Documents or of any other guarantee or security taken
pursuant to, or in connection with, the Finance Documents by
Burdale.
15.8 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by
any other guarantee or security now or subsequently held by Burdale.
16 EVENTS OF DEFAULT
16.1 DEFAULT
Each of the events or circumstances specified below constitutes an
Event of Default:
(a) PAYMENT DEFAULT: Any Obligor does not pay on its due date any
amount payable by it under the Finance Documents at the place
and in the currency in which it is expressed to be payable or,
where such failure is due to a technical or administrative
failure within the banking system (which is not attributable
to the relevant Obligor), within two Business Days of such due
date.
(b) Breach of Other Obligations:
(i) Any Obligor does not comply with its obligations or
undertakings under, or there is a breach of any of
Clauses 13.4, 13.8, 13.12, 13.15, 13.21 or 13.22.
(ii) Any Obligor does not comply with any of its
obligations or undertakings under any of the Finance
Documents (other than those referred to in Clause
16.1(a) or 16.1(b)(i)) and, where such failure is
capable of remedy, such Obligor fails to remedy the
same within ten Business Days of the relevant Obligor
becoming aware of the failure to comply.
(c) MISREPRESENTATION: Any representation or warranty made or
repeated in connection with any Finance Document or any other
document delivered by or on behalf of any Obligor under or in
connection with any Finance Document is or proves to have been
incorrect or misleading in any material respect when made or
deemed to be made.
(d) INVALIDITY: Any provision of any of the Finance Documents is
not, or is alleged by any Obligor not to be binding on or
enforceable against any Obligor or effective to create any
security intended to be created by it.
(e) CROSS-DEFAULT:
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(i) Any Financial Indebtedness of any Obligor exceeding
$75,000 (or its equivalent in other currencies) in
aggregate is not paid when due.
(ii) An event of default howsoever described occurs under
any document relating to Financial Indebtedness of any
Obligor exceeding $75,000 (or its equivalent in other
currencies).
(iii) Any Security Interest securing Financial Indebtedness
over any asset of any Obligor becomes enforceable.
(iv) An amount exceeding $75,000 in aggregate owed to trade
creditors of any Obligor remains outstanding following
the expiry of any relevant customary trade credit
period.
(f) CREDITORS' PROCESS: Any attachment, sequestration, distress or
execution affects any asset of any Obligor and is not
discharged within 14 days.
(g) INSOLVENCY:
(i) Any Obligor is unable or admits inability to pay its
debts as they fall due, suspends making payments on
any of its debts or, by reason of actual or
anticipated financial difficulties, commences
negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness.
(ii) The value of the assets of any Obligor is less than
its liabilities (taking into account contingent and
prospective liabilities).
(iii) A moratorium is declared in respect of any
indebtedness of any Obligor.
(h) INSOLVENCY PROCEEDINGS:
(i) Any corporate action, legal proceedings or other
procedure or step is taken in relation to:
(ii) the suspension of payments, a moratorium of any
indebtedness, winding-up, dissolution, administration
or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Obligor;
(iii) a composition, assignment or arrangement with any
creditor of any Obligor;
(iv) the appointment of a liquidator, receiver,
administrator, administrative receiver, compulsory
manager or other similar officer in respect of any
Obligor or any of its assets; or
(v) enforcement of any Security Interest over any assets
of any Obligor,
or any analogous procedure or step is taken in any
jurisdiction.
(i) CESSATION OF BUSINESS: Any Obligor ceases, or threatens to
cease, to carry on all or a substantial part of its business.
(j) AUTHORISATIONS: Any authorisation or other requirement
necessary to enable any Obligor to comply with any of its
obligations under the Finance Documents or for Burdale to
enter into this Agreement and make available and/or maintain
the Facilities
Page 38
or any of them is revoked or withheld or does not remain in
full force and effect or is materially and adversely modified.
(k) UNLAWFULNESS: It is or becomes unlawful for any Obligor to
perform any of its obligations under the Finance Documents.
(l) CHANGE OF CONTROL: Any single person or group of persons
acting in concert (as defined in the City Code on Takeovers
and Mergers) not having control of the Company directly or
indirectly as at today's date, acquires or agrees to acquire
control (as defined in Section 416 of the Income and
Corporation Taxes Act 1988) of the Company.
(m) CHARGED ACCOUNT ARRANGEMENTS: Any bank repudiates or purports
to terminate the arrangements set out in the Debenture in
relation to any Charged Account or a cash-sweep or payment
required to be made under any Finance Document from a Charged
Account is not made in the amount and manner required.
(n) MATERIAL ADVERSE EFFECT: An event or series of events occurs
which in Burdale's reasonable opinion constitutes or could
reasonably be expected to constitute a Material Adverse
Effect.
16.2 ACTION ON DEFAULT
Upon the occurrence of any Event of Default and whilst the same is
continuing, and without prejudice to any of Burdale's rights under this
Agreement, Burdale may, by notice to the Company:
(a) declare that an Event of Default has occurred; and/or
(b) declare that the Facilities or any of them shall be cancelled,
whereupon the Facilities or such of them (as the case may be)
shall be so cancelled and all fees (including without
limitation pursuant to Clause 7.7.1(b)) payable in relation to
the Facilities or such of them (as the case may be) shall
become immediately due and payable; and/or
(c) declare that some or all of the Loans, together with accrued
interest and all other amounts accrued, be immediately due and
payable, whereupon they shall become immediately due and
payable; and/or
(d) declare that some or all of the Loans, together with accrued
interest and all other amounts accrued, be payable on demand,
whereupon they shall immediately become payable on demand (and
in the event of any such demand those Loans, such interest and
such other amounts shall be immediately due and payable);
and/or
(e) declare that the Company shall forthwith pay or procure the
payment to Burdale of a sufficient sum to cover the amount of
all Outstanding Purchase Price and/or any contingent
obligations of Burdale under any outstanding L/Cs and/or any
contingent obligation of Burdale under any Forex Transaction,
whereupon the same shall become immediately due and payable.
16.3 APPOINTMENT OF INSOLVENCY OFFICER
If any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or
any other insolvency officer is appointed in respect of any Obligor or
any part of its assets (whether on the application or with the consent
of Burdale or otherwise) then Burdale may (with or without it first
having exercised any of its other rights under the Finance Documents),
by notice to the Company, declare that the fee specified in Clause
7.7.1(b) be immediately due and payable or, at Burdale's option,
payable upon demand
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as if the Facility Limit at such time had been reduced to zero,
whereupon such fee shall become immediately due and payable or payable
on demand (as the case may be).
17 COSTS, EXPENSES AND FEES
17.1 INITIAL AND GENERAL COSTS
The Company shall pay to Burdale on demand the amount of all costs and
expenses (including legal fees) incurred by it:
(a) in the negotiation, preparation, printing and execution of the
Finance Documents (including any Finance Documents executed
after today's date);
(b) in relation to any amendment, waiver, consent or suspension of
rights requested by or on behalf of any Obligor relating to a
Finance Document;
(c) in remitting loan proceeds, collecting cheques and other items
of payment, and establishing and maintaining the Charged
Accounts, together with Burdale's associated and customary
charges and fees;
(d) as out-of-pocket expenses and costs from time to time
(including prior to today's date) during the course of
periodic field examinations of the Obligors' assets and
operations, plus a daily charge at the rate of $1,000 for
Burdale's examiners in the field and office for up to four
such periodic field examinations in any 12 month period prior
to a Default and for any other or additional field
examinations on and after the occurrence of a Default.
17.2 ENFORCEMENT COSTS
The Company shall pay to Burdale on demand the amount of all costs and
expenses (including legal fees and VAT) incurred by it in:
(a) the enforcement of, or the preservation of any rights under,
any Finance Document; or
(b) investigating any Default.
17.3 FEES
17.3.1 FACILITY FEE: The Company will pay to Burdale today a facility fee of
$100,000 and on the DIP Financing Date a further facility fee of
$25,000.
17.3.2 COMMITMENT FEE: The Company will pay to Burdale a commitment fee
computed at the rate of 0.375% on the daily undrawn/unutilised balance
of the Facility Limit. Accrued Commitment Fee shall be payable monthly
in arrears from today's date and also on the date on which all the
Facilities are terminated. Commitment fee shall accrue from day to day
and be calculated on the basis of a 365 day year and for the actual
number of days elapsed.
17.3.3 MONITORING FEE: The Company will pay to Burdale a monitoring fee of
$2,500 quarterly in advance with the first payment to be made on
today's date.
17.3.4 L/C FEE: Each Facility Company will pay to Burdale a fee equal to 2.25%
per annum on the face amount of each L/C issued at such Facility
Company's request in respect of the period between the date of issue of
the L/C and the End Date of such L/C. The fee shall be calculated on
the basis of a 365 day year and shall be paid monthly in arrears and on
the End Date of such L/C.
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18 INDEMNITIES
18.1 CURRENCY INDEMNITY
If any amount payable by any Obligor under or in connection with any of
the Finance Documents is received by Burdale in a currency other than
that agreed to be payable under the Finance Documents, whether as a
result of any judgment or order or other enforcement, the liquidation
or bankruptcy of any Obligor or otherwise howsoever and the amount
produced by converting the currency so received into the agreed
currency is less than the relevant amount of the agreed currency, then
the relevant Obligor will as an independent obligation indemnify
Burdale for the deficiency and any loss sustained as a result. Such
conversion will be made at the Exchange Rate, on such date and in such
market as is determined by Burdale as being most favourable for such
conversion. The relevant Obligor will in addition pay the costs of such
conversion.
18.2 FOREIGN EXCHANGE INDEMNITY
Each Facility Company will indemnify and hold Burdale harmless from and
against any and all losses, claims, damages, liabilities, costs and
expenses which Burdale may suffer or incur in connection with any Forex
Transaction and any documents, drafts or financial information relating
to such Forex Transaction, including, but not limited to, any losses,
claims, damages, liabilities, costs and expenses due to any action
taken by any counterparty with respect to any Forex Transaction, except
for any such losses, claims, damages, liabilities, costs and expenses
suffered or incurred by Burdale as a result of its gross negligence or
wilful misconduct. Each Facility Company assumes all risks with respect
to the acts or omissions of any counterparty to any Forex Transaction
and for such purposes the counterparty will be deemed such Facility
Company's agent. Each Facility Company assumes all risks for, and
agrees to pay, all foreign and local taxes, duties and levies relating
to any transaction pursuant to the Forex Transactions or any documents,
drafts or financial information relating to such Forex Transaction.
Each Facility Company releases and holds Burdale harmless from and
against any acts, waivers, errors, delays or omissions, whether caused
by such Facility Company, by any counterparty or otherwise with respect
to or relating to any Forex Transaction.
18.3 OTHER INDEMNITIES
The Company will (or will procure that an Obligor will) indemnify
Burdale on demand against any loss or liability which Burdale incurs as
a result of:
(a) the occurrence of any Default;
(b) any payment of principal or other amount being received from
any source otherwise than on its due date under this
Agreement;
(c) any Utilisation not being effected after a Facility Company
has delivered a Request in respect of such Utilisation other
than as a result of Burdale's negligence or default;
(d) any prepayment or provision of cash collateral by any Obligor
not being made in accordance with the terms of this Agreement.
In each case the Company's liability includes (without limitation) any
loss of margin or anticipated profits or other loss or expense on
account of funds borrowed, contracted for or utilised to fund any
amount payable under any Finance Document and on account of any
security given by Burdale in relation to those funds and in relation to
any amount repaid or prepaid in relation to any Finance Document.
Page 41
19 NOTICES
19.1 DELIVERY AND RECEIPT
19.1.1 Any communications to be made under or in connection with the Finance
Documents shall be made in writing, may be made by letter or facsimile
and shall be deemed to be given as follows:
(a) if by way of letter, when it has been left at the relevant
address or two Business Days after being deposited in the post
with postage prepaid in an envelope addressed to it at that
address; and
(b) if by facsimile, when received in legible form,
save that any notice delivered or received on a non-Business Day or
after business hours shall be deemed to be given on the next Business
Day at the place of delivery or receipt.
19.1.2 Any communication or document made or delivered to the Company in
accordance with this Clause will be deemed to have been made or
delivered to each of the Obligors.
19.2 ADDRESSES
19.2.1 The Company's and each other Obligor's address and facsimile number for
notices are:
Parkhouse Street
Xxxxxxxx
Manchester
Facsimile no: 0161 223 2412
For the attention of: Managing Director
or such as the Company may notify to Burdale by not less than 10 days'
notice.
19.2.2 Burdale's address and facsimile number for notices are:
00 Xxxxx Xxxx Xxxxxx
Xxxxxx X0X 0XX
Facsimile no: 020 7935 5445
For the attention of: Company Secretary
or such as Burdale may notify to the Company by not less than 10 days'
notice.
20 MISCELLANEOUS PROVISIONS
20.1 REMEDIES AND WAIVERS
The rights of Burdale under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any right shall not be deemed to
be a waiver of that right.
Page 42
20.2 INVALIDITY
If, at any time, any provision of any Finance Document is or becomes
invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions will
not in any way be affected or impaired.
20.3 CHANGE OF CURRENCY
20.3.1 Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:
(a) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by Burdale (after
consultation with the Facility Companies); and
(b) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by Burdale (acting
reasonably).
20.3.2 If a change in any currency of a country occurs, this Agreement will,
to the extent Burdale (acting reasonably and after consultation with
the Facility Companies) specifies to be necessary, be amended to comply
with any generally accepted conventions and market practice in the
London interbank market and otherwise to reflect the change in
currency.
20.4 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by Burdale are prima facie evidence of the matters to which
they relate.
20.5 CERTIFICATES AND DETERMINATIONS
Any certification or determination by Burdale of a rate or amount under
any Finance Document is, in the absence of manifest error, conclusive
evidence of the matters to which it relates.
20.6 DISCLOSURE OF INFORMATION
Burdale may disclose to any person with whom it is proposing to enter
into (or has entered into) any kind of assignment or transfer in
relation to this Agreement any information concerning the Obligors as
Burdale may in its discretion think fit, and may advertise or publicise
in such publications and to such persons as Burdale may in its
discretion think fit such particulars of this transaction as Burdale
may in its absolute discretion deem appropriate.
20.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together will be deemed to constitute one and
the same instrument.
21 GOODS AND DOCUMENTS
21.1 PLEDGE
All Goods and Documents are hereby and shall upon despatch from the
supplier of any Goods be deemed to be pledged by the relevant Facility
Company to Burdale and the Goods and the
Page 43
proceeds of all insurances in relation to them and all sales of them
and all of the relevant Facility Company's rights as unpaid seller of
them shall be a continuing security for the payment and discharge in
full of all of the obligations of the relevant Facility Company under
the Finance Documents.
21.2 PERFECTION OF PLEDGE
Burdale shall be entitled at its option to obtain possession of the
Goods in order to perfect the pledge made by Clause 21.1 and in this
regard the relevant Facility Company assigns to Burdale its right,
title and interest in and to the Documents and all claims and rights
arising from them and the relevant Facility Company irrevocably and
unconditionally authorises Burdale to do all such things as may be
necessary to clear the Goods, take possession of them and realise the
Goods in reduction of the relevant Facility Company's indebtedness to
Burdale and in this regard the relevant Facility Company irrevocably
appoints Burdale acting through any one of Burdale's directors as the
relevant Facility Company's agent to sign all such documents and do all
such things on the relevant Facility Company's behalf as may be
necessary to give effect to the provisions of this Clause 21.2.
21.3 TRUST RECEIPTS
The Goods and the Documents shall only be released to the relevant
Facility Company by Burdale against receipt by Burdale of a duly
executed trust receipt from the relevant Facility Company in Burdale's
standard form (from time to time) and if, for any reason, no such trust
receipt is executed by the relevant Facility Company in respect of any
Goods or Documents, such Goods or Documents shall be deemed to be
subject to a trust receipt in such form.
21.4 SEPARATION
Each Facility Company undertakes to keep the Documents and the Goods
separate and distinct from any other bills of lading, documents of
title or goods.
22 CHANGES TO PARTIES
22.1 ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents.
22.2 ADDITIONAL FACILITY COMPANIES
The Company may request that any of its Subsidiaries becomes an
Additional Facility Company. That Subsidiary shall become an Additional
Facility Company if:
(a) Burdale approves the addition of that Subsidiary as an
Additional Facility Company;
(b) the Company delivers to Burdale a duly completed and executed
Accession Letter;
(c) the Company confirms that no Default is continuing or would
occur as a result of that Subsidiary becoming an Additional
Facility Company; and
(d) Burdale has received all of the documents and other evidence
listed in Part III of Schedule 2 in relation to that
Additional Facility Company, each in form and substance
satisfactory to Burdale.
Page 44
22.3 ADDITIONAL GUARANTORS
The Company shall procure that each of its Subsidiaries is a Guarantor.
With respect to any company which becomes a Subsidiary of the Company
after today's date, the Company shall procure that such Subsidiary
becomes an Additional Guarantor by delivering to Burdale (promptly upon
such company becoming a Subsidiary):
(a) a duly completed and executed Accession Letter; and
(b) all of the documents and other evidence listed in Part III of
Schedule 2 in relation to that Additional Guarantor, each in
form and substance satisfactory to Burdale.
22.4 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the
relevant Subsidiary that the representations and warranties in Clause
12 are true and correct in relation to it as at the date of delivery as
if made by reference to the facts and circumstances then existing.
22.5 TRANSFER BY BURDALE
Burdale may at any time assign, transfer, delegate or offer
participations in all or a proportion of all its rights and obligations
under the Finance Documents to any other bank or financial institution.
23 GOVERNING LAW AND JURISDICTION
23.1 GOVERNING LAW
This Agreement is governed by English law.
23.2 JURISDICTION
23.2.1 The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including a
dispute regarding the existence, validity or termination of this
Agreement) (a DISPUTE).
23.2.2 The parties agree that the courts of England are the most appropriate
and convenient courts to settle Disputes and accordingly no party will
argue to the contrary.
23.2.3 This Clause 23.2 is for the benefit of Burdale only. As a result,
Burdale shall not be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by
law, Burdale may take concurrent proceedings in any number of
jurisdictions.
23.3 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any
relevant law, each Obligor (other than an Obligor incorporated in
England and Wales):
(a) irrevocably appoints the Company as its agent for service of
process in relation to any proceedings before the English
courts in connection with any Finance Document; and
(b) agrees that failure by a process agent to notify the relevant
Obligor of the process will not invalidate the proceedings
concerned.
Page 45
For the benefit of Burdale the Company expressly agrees and consents to
its irrevocable appointment as process agent pursuant to this Clause
23.3.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
Page 46
SIGNATORIES
THE COMPANY
XXXXXX INTERNATIONAL LIMITED
By: /s/ X.X. Xxxxxxxx
----------------------------
BURDALE
BURDALE FINANCIAL LIMITED
By: /s/ X.X. Xxxxx
----------------------------
By: /s/ Xxxxx Xxxxxx
----------------------------
[The exhibits and schedules have been omitted from this Agreement as filed with
the Securities and Exchange Commission (the "SEC"). The omitted information is
considered immaterial from an investor's perspective. The Registrant will
furnish supplementally a copy of any of the omitted exhibits or schedules to the
SEC upon request from the SEC.]
Page 47
