Exhibit 10(a)
This Loan Agreement is made on the 2nd day of March 1994
B E T W E E N :
(1) HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. of Hoekenrode 6,
1102BR, Amsterdam, Netherlands ("the Lender); and
(2) HFC BANK PLC of North Street, Winkfield, Windsor,
Berkshire SL4 4TD ("the Bank).
WHEREAS
The Lender is desirous of lending to the Bank a total sum of
US$175,000,000 upon the terms and conditions hereinafter
appearing.
It is hereby agreed as follows:
1. DEFINITIONS
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In this Agreement unless the context otherwise requires:-
(a) "Business Day" means a day on which banks are open for
business in London and New York.
(b) "Loan" means the sum referred to in clause 2 or the
principal amount thereof from time to time outstanding.
(c) "Dollars" and "US$" means the lawful currency of the United
States of America.
(d) "Event of Default" shall the meaning specified in clause 12.
(e) Interest Period" in relation to the Loan shall have the
meaning specified in clause 4.
(f) "Maturity Date" shall mean 15th March 1999 or if such day is
not a Business Day, on the next succeeding Business Day,
unless otherwise agreed in writing by the parties hereto.
(g) "Taxes" includes all present and future income and other
taxes, levies, imposts, deductions, charges, compulsory
loans and withholdings whatsoever together with interest
thereon and penalties with respect thereto, if any, and any
payments made on or in respect thereof; and "Tax" shall be
construed accordingly.
(h) "Qualifying Bank" means a bank which is recognised by the
Inland Revenue as carrying on a bona fide banking business
in the United Kingdom for the purpose of Section 349 of the
Income and Corporation Taxes Act 1988.
(i) "Sterling" means the lawful currency of the United Kingdom.
All references herewith to Clauses are reference to clauses of
this Agreement.
2. AMOUNT OF LOAN
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The maximum aggregate amount which may be borrowed under this
Agreement is One hundred and seventy five million Dollars
(US$175,000,000).
3. DRAWING OF LOAN
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Subject to the terms and conditions of this Agreement, as from
the date hereof the Lender agrees to lend the Bank and the Bank
agrees to borrow from the Lender the Loan.
4. INTEREST PERIODS
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(a) The duration of each Interest Period shall be six months or
such other period as may be nominated in writing by the
Bank from time to time.
(b) If any Interest Period would end on a day which is not a
Business Day such Interest Period shall be extended to the
next succeeding Business Day and interest shall be adjusted
accordingly.
(c) Save as is otherwise provided in this Clause 4, any Interest
Period which commences upon the last Business Day of a
calendar month or on a day for which there is no numerically
corresponding day in the calendar month in which that
Interest Period is to end shall end on the last Business Day
in that later calendar month.
5. INTEREST
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(1) Interest on the Loan shall accrue from day to day and be
calculated on the basis of a year of 360 days and the actual
number of days elapsed and shall be payable gross in arrears
on the last day of each Interest Period at a semi-annual
rate of 6.175%.
(2) The Lender's certificate as to each amount payable under
this Clause shall, in the absence of manifest error, be
conclusive evidence of each such amount.
6. TAXES
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(a) All sums payable by the Bank hereunder shall be paid without
set-off, counterclaim, withholding or deduction whatsoever
unless required by law, in which event the Bank shall pay
the net amount to the Lender, after the deduction of such
amount required by law.
(b) All Taxes in respect of this Agreement or in respect of any
amounts paid or payable hereunder shall be paid by the Bank
or as the case may be, the Lender when due and in any event
prior to the date on which penalties attach thereto. The
Bank will indemnify the Lender in respect of all such Taxes
in respect of amounts paid or payable by the Bank hereunder.
In addition, if any Taxes or amounts in respect thereof must
be deducted from any amounts payable or paid by the Bank
hereunder the Bank shall pay such additional amounts as may
be necessary to ensure that the Lender receives and is able
to retain on the due date a net amount equal to the full
amount which it would have received had payment not been
made subject to the deduction of such Tax. Notwithstanding
anything else contained in this paragraph nothing shall
oblige the Bank to make payment of or indemnify in respect
of an amount equal to Tax imposed on the income of the
Lender in the place where it is incorporated which is
calculated and levied by reference to its net income.
(c) If the Lender intends to make a claim pursuant to Clause
6(b) the Lender shall promptly notify the Bank of the event
by reason of which it is entitled to do so, giving the
reasons for such claim and setting out a calculation in
reasonable detail as to the amount claimed (such notice
being prima facie evidence of the amount in question).
(d) Within thirty days of each payment by the Bank hereunder of
Tax or in respect of Taxes, the Bank shall deliver to the
Lender evidence satisfactory to the Lender (including all
relevant original Tax receipts or certified copies thereof)
that such Tax has been duly remitted to the appropriate
authority.
(e) If following the imposition of any United Kingdom Tax upon
any payment by the Bank in consequence of which the Bank is
required to pay any additional amount under Clause 6(b) to
the Lender (and the Bank in fact pays such additional amount
when due and complies with its corresponding obligation
under clause 6(d)), the Lender shall, in its sole opinion
and based on its own interpretation of any relevant laws or
regulations, receive in relation to or in respect of such
additional amount, or the payment to which such additional
amount relates, the benefit of a credit against, or of a
remission for or a deduction from or in respect of, any such
Tax payable by it, or shall obtain the benefit of any other
relief in respect of the profits or income of the Lender
(any of the foregoing being referred to as a "saving"), the
Lender shall, to the extent that it can do so without
prejudice to the retention of the relevant saving and
subject to the Bank's obligation to repay such amount to the
Lender if the relevant saying is subsequently disallowed or
cancelled, reimburse the Bank with such amount as the
Lender shall in its sole opinion have concluded to be the
amount or value of the relevant saving. Nothing herein
contained shall interfere with the right of the Lender to
arrange its Tax affairs in whatsoever manner it thinks fit
and, in particular, the Lender shall not be under any
obligation to claim relief from its corporate profits or
similar Tax liability in respect to such Tax in priority to
any other claims, reliefs, credits or deductions available
to it.
7. PAYMENTS
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(a) If the Bank fails to pay any amount payable by it herein on
the due date therefor, the Bank shall on demand from time to
time pay to the Lender interest on such unpaid amount from
the due date therefor up to the date of actual payment (as
well after as before judgement) at such rate or rates as is
equal to the Lender's cost of funding such unpaid amount in
such manner and for such period or periods as the Lender may
from time to time select plus 1% (say, one per cent) per
annum. The Lender's certificate as to any such rate of
interest shall be conclusive, save in the case of manifest
error.
Interest accruing under this Clause 7(a) shall be compounded
upon the last day of each period selected by the Lender as
aforesaid. The Bank acknowledges that each such rate is
intended to compensate the Lender for any failure by the
Bank to pay any amount payable by it hereunder. Nothing
contained in this clause shall prejudice any of the Lender's
other rights under this Agreement.
(b) Save as provided in Clause 4(c) of this Agreement whenever
any payment hereunder shall become due on a day which is not
a Business Day, the due date therefor shall be extended to
the next succeeding Business Day.
8. REPAYMENT AND CANCELLATION
--------------------------
(1) Subject to the terms of this Agreement the Loan shall be
repaid in full and in one amount on the Maturity Date
together with all monies accrued due or owing to the Lender
hereunder on the Maturity Date in respect of the Loan.
(2) The Loan shall not be repaid otherwise than in accordance
with the terms of this Agreement.
(3) The Bank may with the agreement of the Lender prepay the
Loan or part thereof prior to the Maturity Date.
(4) On receipt of any amount prepaid in accordance with this
clause the Lender shall calculate the accrued interest
thereon, the amount of interest accruing on the Loan
thereafter and the amount of interest payable on the next
interest payment date and shall notify the Bank accordingly.
9. PAYMENTS
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(a) By the Lender
The Lender shall remit the Loan to such account of the Bank
as the Bank shall specify, before 3.00 p.m. (London time) in
immediately available London funds and may deduct therefrom
the Arrangement Fee payable by the Bank to the Lender in
accordance with the provisions of clause 16 hereof.
(b) By the Bank
On each date on which any sum is due from the Bank to the
Lender it shall remit that sum to such account of the Lender
as the Lender shall specify from time to time before 10.00
a.m. (London time) in immediately available funds.
(c) Non-Business Days
Any payment to be made by the Bank which would otherwise be
due on a non Business Day shall instead be due on the next
Business Day (and interest shall be adjusted accordingly).
(d) Currency
Dollars are the sole currency of account and for payment of
all sums payable hereunder.
10. REPAYMENT
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Notwithstanding anything contained in this Agreement, if any
law or regulation or any change therein or in the
interpretation or application thereof by any relevant
authority or Court shall make it unlawful for the Lender to
make, maintain or fund the Loan or to perform any of its
obligations hereunder the Lender may by written notice to
the Bank declare that the Loan and the Lender's obligations
hereunder shall be terminated forthwith, whereupon the Loan
and such obligations shall be so terminated and the Bank
shall repay to the Lender forthwith the Loan together with
all accrued interest thereon and all other monies (if any)
accrued due or owing hereunder.
11. REPRESENTATIONS AND WARRANTIES
------------------------------
(a) The Bank hereby represents and warrants to the Lender as of
the date hereof:-
(i) it has the power to enter into the obligations under
this Agreement and to utilise the Loan hereunder and
all necessary regulations binding on it or its Board of
Directors have been complied with in accepting the
Loan;
(ii) the utilisation by it of the Loan hereunder will not
constitute a breach of any existing law or regulation
binding on it or of Memorandum and Articles of
Association, and will not cause any borrowing limit
binding upon it to be exceeded;
(iii) this Agreement constitutes its valid and binding
obligation enforceable against it and its obligations
hereunder are and will be its direct, unconditional and
general obligations;
(iv) no Event of Default or other event which, with the
giving of notice and/or lapse of time, might constitute
an Event of Default has occurred and is continuing
unremedied;
(v) it is not engaged in any litigation, arbitration or
administrative proceeding, nor is any such litigation,
arbitration or administrative proceeding pending or
threatened against it, which in any such case might
have a material adverse effect on its ability to
perform its obligations hereunder.
(b) The Bank hereby represents and warrants that as of the date
hereof and as of each day on which the Loan is outstanding
that it is an authorised institution as defined in the
Banking Act 1987.
12. UNDERTAKINGS
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(a) The Bank hereby undertakes to the Lender that from the date
hereof and so long as any part of the Loan and any other
monies due or to become due hereunder shall be or remain
accrued due or owing, the Loan will rank at least pari passu
in right of repayment and in point of security with all its
other present and future unsubordinated unsecured
indebtedness (other than obligations preferred by law); and
(b) The Bank hereby undertakes to the Lender that it will for
the period of the Loan maintain its status as an authorised
institution as defined in the Banking Act 1987 or as a
similar institution regulated by the Banking Act 1987 (or
any statute which amends or replaces the Banking Act 1987).
13. EVENTS OF DEFAULT
-----------------
(a) Each of the following events shall be an Event of
Default:-
(i) if either the Bank shall fail to pay principal or
interest or any other sum due hereunder on the due
date for payment thereof and such failure shall
not if capable of remedy be remedied within 5
Business Days of such failure; or
(ii) if the Bank shall commit any breach of or omit to
observe any of its obligations or undertakings
contained in this Agreement which if capable of
remedy are not remedied within 30 Business Days of
the happening of such event; or
(iii) if any representation or warranty made or deemed
to be made by the Bank in or pursuant to this
Agreement is or would be if repeated at any time
hereafter with reference to the facts subsisting
at the time of such repetition, incorrect or
untrue in any material respect as at the date of
its being made, deemed to be made or repeated as
aforesaid; or
(iv) if the Bank ceases or threatens to cease to carry
on its business or is unable to pay its debts as
they fall due or if a petition is presented or if
any order is made or an effective resolution is
passed for its winding up, or a receiver is
appointed in respect of all or any part of its
undertaking, property or assets; or
(v) if a distress execution or other process is levied
or enforced on or against any of the Bank's
property or assets, or a judgment or order of any
Court is made against it for a sum considered by
the Lender to be material unless contested in good
faith;
(vi) if the Bank convenes a meeting of or enters or
proposes to enter into any arrangement or
composition for the benefit of its creditors; or
(vii) if any event or series of events (whether related
or not) occurs or any situation shall develop or
any legislation shall be enacted which would, in
the opinion of the Lender, entitle the Bank of
England to revoke the Bank's status as an
authorised institution under the Banking Act 1987;
or
(viii) if at any time Household International Inc. shall
cease to be the beneficial owner of at least 75%
of the issued share capital of the Bank;
(ix) if the Bank shall cease to be an authorised
institution as defined in the Banking Act 1987 (or
any statute which amends or replaces the banking
Act 1987); or
(x) if there is any change in the circumstances of the
Bank, which change would materially and adversely
affect the Bank's ability to perform its
obligations hereunder and the Bank will notify the
Lender forthwith in writing of any occurrence of
any Event of Default.
(b) The Lender shall be entitled at any time after the
happening of an Event of Default (whether or not the
Bank shall have given notice as aforesaid) by notice in
writing to the Bank to declare the Loan and all
interest accrued thereon and all other monies accrued
due or owing (whether actually or contingently)
pursuant to this Agreement to be immediately due and
payable whereupon the same shall become immediately due
and payable to the Lender.
14. INDEMNITY
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The Bank hereby agrees to keep the Lender indemnified from and
against all losses, costs and expenses which the Lender may incur
by reason of the occurrence of any Event of Default, including
(without limiting the foregoing) all reasonable expenses incurred
by the Lender in preserving and/or enforcing its rights
hereunder.
15. INFORMATION
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(a) During the period of the Facility and whilst any amount
remains accrued, due or owing hereunder the Bank shall
provide to the Lender within 180 days of the close of its
financial year a copy of its audited Annual Report and
Accounts.
(b) The Bank also undertakes to provide promptly to the Lender
any other financial information that the Lender may from
time to time reasonably require.
16. ARRANGEMENT FEE
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The Bank shall pay to the Lender on the date hereof an
Arrangement Fee in the sum specified in a letter signed by the
Bank and of even date herewith.
17. DELAY
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No delay of whatever length by the Lender in giving notice or
exercising any of the Lender's rights hereunder shall operate as
a waiver of any of such rights.
18. COUNTERPARTS
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This Agreement may be signed in any number of counterparts each
of which will be an original but all of which together shall
constitute one Agreement.
19. GOVERNING LAW
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This Agreement shall be governed and construed in accordance with
the laws of England and shall be binding upon and enure for the
benefit of the successors of the parties but shall not be
assignable by the Lender (except to an affiliate of the Lender
provided that such affiliate shall enter into such further
agreement as the Bank or the Bank of England shall reasonably
require) or the Bank.
As witness the hand of the duly authorised representatives of
each party the day and year first before written.
For and on behalf of Household International Netherlands B.V.
/s/ Joseph W. Hoff
Director
For and on behalf of HFC Bank plc
/s/ A. R. Hill
Director
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