EXHIBIT 2.4(a)
CONFORMED COPY
DATED 21st December 1995
AUTOMATED SECURITY (HOLDINGS) PLC
- and -
CERTAIN SUBSIDIARIES OF AUTOMATED SECURITY (HOLDINGS) PLC
- and -
THE BANKS
- and -
LLOYDS BANK Plc
as Agent
- and -
MIDLAND BANK plc
as Working Capital Bank
----------------
CREDIT AGREEMENT
----------------
WILDE SAPTE
London
TABLE OF CONTENTS
Clause Heading Page Number
- ------ ------- -----------
1 DEFINITIONS AND INTERPRETATION .................................... 1
1.1 Definitions ....................................................... 1
1.2 Clause Headings ................................................... 19
1.3 Interpretation .................................................... 19
2. CONDITIONS PRECEDENT .............................................. 20
3. FACILITIES ........................................................ 21
3.1 Facilities ........................................................ 21
3.2 Obligations Several ............................................... 22
3.3 Rights Several .................................................... 22
3.4 Additional Borrowers .............................................. 22
4. PURPOSE ........................................................... 23
4.1 Purpose of the Term Loan Facility ................................. 23
4.2 Purpose of the Revolving Loan Facility, the Overdraft
Facility and the Engagements Facility ............................. 23
4.3 Undertaking by the Borrowers ...................................... 24
4.4 No Liability ...................................................... 24
5. THE TERM LOAN FACILITY AND THE REVOLVING LOAN FACILITY ............ 24
5.1 Utilisation of the Term Loan Facility ............................. 24
5.2 Utilisation of the Revolving Loan Facility ........................ 24
5.3 Drawdown of Advances .............................................. 25
5.4 Participations and Payments ....................................... 25
5.5 Drawdown Indemnity ................................................ 26
5.6 Initial Funding ................................................... 26
6. THE OVERDRAFT FACILITY AND THE UNCOMMITTED ENGAGEMENTS
FACILITY .......................................................... 27
6.1 Nature of Overdraft Facility ...................................... 27
6.2 Utilisation of Overdraft Facility ................................. 28
6.3 Utilisation of Uncommitted Engagements Facility ................... 28
7. AVAILABILITY OP ALTERNATIVE CURRENCIES ............................ 30
7.1 Non-Availability .................................................. 30
7.2 Effect of Notice .................................................. 30
8. INTEREST .......................................................... 30
8.1 Amount ............................................................ 30
8.2 Interest Periods .................................................. 31
8.3 Default Interest .................................................. 32
8.4 Interest under the Overdraft Facility ............................. 32
8.5 Engagements Commission ............................................ 33
8.6 Calculation and Payment of Interest ............................... 33
8.7 Market Disruption ................................................. 34
8.8 Agent's Determination ............................................. 35
9. REPAYMENT AND REDUCTION ........................................... 35
9.1 Repayment of the Term Loan ........................................ 35
9.2 Repayment of Revolving Advances ................................... 35
9.3 Repayment of the Overall Facility ................................. 36
9.4 Reduction of Commitments .......................................... 36
9.5 Mandatory Repayment from Disposal Proceeds and Equity Raisings .... 36
9.6 Voluntary Repayment of the Term Loan .............................. 38
10. CANCELLATION ...................................................... 38
10.1 Voluntary Cancellation ............................................ 38
10.2 Mandatory Cancellation ............................................ 39
11. CHANGES IN CIRCUMSTANCES .......................................... 39
11.1 Illegality ........................................................ 39
11.2 Inacased Costs .................................................... 40
11.3 Certificates ...................................................... 42
12. PAYMENTS .......................................................... 42
12.1 Time and Place .................................................... 42
12.2 Business Days ..................................................... 42
12.3 Indemnity and Breakage Costs ...................................... 43
12.4 Grossing-up ....................................................... 43
12.5 Mitigation ........................................................ 45
12.6 Prepayment Right .................................................. 45
12.7 Accounts .......................................................... 46
12.8 Borrower's Payments ............................................... 46
12.9 Banks' Payments ................................................... 46
12.10 Appropriation ..................................................... 47
12.11 Currency of Account ............................................... 47
13. REPRESENTATIONS AND WARRANTIES .................................... 47
13.1 Acknowledgement of Reliance ....................................... 47
13.2 Representations and Warranties .................................... 47
13.3 Repetition ........................................................ 50
14. UNDERTAKINGS ...................................................... 50
14.1 Information Undertakings .......................................... 50
14.2 Positive Covenants ................................................ 52
14.3 Negative Covenants ................................................ 53
14.4 Financial Undertakings ............................................ 56
15. DEFAULT ........................................................... 58
15.1 Defaults .......................................................... 58
15.2 Acceleration etc .................................................. 61
16. SET-OFF AND PRO RATA PAYMENTS ..................................... 61
16.1 Set-Off ........................................................... 61
16.2 Pro Rata Sharing .................................................. 62
17. THE AGENT AND THE BANKS ........................................... 63
17.1 Appointment and Duties ............................................ 63
17.2 Payments and Information Received ................................. 64
17.3 Defaults .......................................................... 64
17.4 Assumptions ....................................................... 64
17.5 Legal Procecdings ................................................. 65
17.6 No Liability ...................................................... 65
17,7 Credit Decisions .................................................. 65
17.8 Advisers .......................................................... 65
17.9 Relationship with Banks ........................................... 66
17.10 Agent's position as a Bank ........................................ 66
17.11 Indemnity ......................................................... 66
17.12 Resignation ....................................................... 66
17.13 Change of Office .................................................. 67
17.14 Scope of Duties ................................................... 67
17.15 Consents .......................................................... 68
17.16 Evidence .......................................................... 68
17.17 Distribution of Proceeds of Enforcement ........................... 68
17.18 Net Limits ........................................................ 69
18. FEES AND EXPENSES ................................................. 69
18.1 Expenses .......................................................... 69
18.2 Agency Fees ....................................................... 70
18.3 Commitment Fee .................................................... 70
18.4 Deferred Fee ...................................................... 70
18.5 Facility Fee ...................................................... 70
18.6 Success Fee ....................................................... 71
18.7 Documentary Taxes Indemnity ....................................... 71
18.8 VAT ............................................................... 71
18.9 Indemnity Payments ................................................ 72
19. SEVERABILITY, WAIVERS, REMEDIES CUMULATIVE ........................ 72
19.1 Severance ......................................................... 72
19.2 Waivers ........................................................... 72
20. NOTICES ........................................................... 73
20.1 Method ............................................................ 73
20.2 Delivery .......................................................... 73
20.3 Addresses ......................................................... 73
20.4 Deemed Receipt .................................................... 74
20.5 Notices to the Banks .............................................. 74
21. ASSIGNMENTS AND TRANSFERS ......................................... 74
21.1 Benefit of Agreement .............................................. 74
21.2 Assignments and Transfers by the Borrowers ........................ 74
21.3 Assignments and Transfers by Banks ................................ 75
21.4 Disclosure of Information ......................................... 76
22. COUNTERPARTS ...................................................... 76
23. LAW ............................................................... 76
24. CURRENCY INDEMNITY ................................................ 77
SCHEDULE 1 THE BANKS ................................................... 78
SCHEDULE 2 DRAWDOWN NOTICE ............................................. 80
SCHEDULE 3 MANDATORY LIQUID ASSET COSTS FORMULA ........................ 81
SCHEDULE 4 FORM OF TRANSFER CERTIFICATE ................................ 83
SCHEDULE 5 THE GROUP ................................................... 87
SCHEDULE 6 DEED OF ACCESSION ........................................... 88
THIS AGREEMENT is made on the 21st day of December 1995
BY:
(1) AUTOMATED SECURITY (HOLDINGS) PLC, a company incorporated under the laws
of England and Wales with registered number 321639 having its registered
office at The Clock House, The Campus, Hemel Hempstead, Hertfordshire HP2
7TL (the "Company");
(2) THE COMPANIES listed in Part A of Schedule 5;
(3) THE BANKS as defined below;
(4) LLOYDS BANK Plc of P.O. Box 560 Regent House, St. John's Road, Bedminster,
Bristol BS99 1PQ as the Agent (as such term is more particularly defined
below); and
(5) MIDLAND BANK plc of 3 Lower Thames Street, London, EC3R 6HA as the Working
Capital Bank (as such term is more particularly defined below).
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement the following expressions shall have the following
meanings (except where the context otherwise requires):
"Accounts" means:
(i) in relation to the Company, the audited consolidated accounts
(including all additional information and notes thereto) of the
Company and its Subsidiaries together with the relative directors,
report and auditors report; and
(ii) in relation to each Material Subsidiary from time to time, accounts
(including all additional information and notes thereto) to the
extent required by applicable laws audited together with the
relative directors' report and auditors' report;
"Additional Margin" means during the pe4od from and including the date
hereof to but excluding 30th June 1996 an additional margin of 1.00 per
cent. per annum on the amount by which the aggregate of the Overdraft
Outstandings and all Advances exceed (pound)81,641,000 computed on a
day-to-day basis with the Term Loan being taken into account on the basis
of an exchange rate of US$1.5916 to (pound)1;
"Advance" means a Term Advance or a Revolving Advance;
"Agent" means Lloyds Bank Plc in its capacity as agent and each successor
Agent appointed from time to time under Clause 17.12;
"AIB" means Allied Irish Banks p.l.c.;
"AIB Facility" means the facility made available under the facility letter
dated 27th March 1995 between AIB and Modern Security Systems Limited (a
company incorporated in Ireland) (as amended from time to time);
"Alternative Currency" means US Dollars or any other currency other than
Sterling which is freely transferable and freely convertible into Sterling
of which deposits are readily available to each of the Banks in the London
Inter-Bank Market;
"Application Account" has the meaning ascribed to such term in Clause
9.5.6;
"API" means API Security Inc., a company incorporated under the laws of
State of California, having its principal office at 8550 Higuera Street,
Culver City CA 90232;
"ASC" means Automated Security Corporation, a company incorporated under
the laws of the State of Delaware, having its principal office at 8550
Higuera Street, Culver City CA 90232;
"ASHI" means Automated Security Holdings Inc, a company incorporated under
the laws of the State of Delaware;
"ASH Jersey" means ASH Capital Finance (Jersey) Limited;
"Auditors" means, in relation to each of the members of the Group, Binder
Hamlyn or, as the case may be, Arthur Andersen, or such other firm of
chartered accountants of international standing as shall have been duly
appointed as auditors of the relative company;
"Banks" means each of the banks and financial institutions listed in
Schedule 1, their respective successors in title and each Bank Transferee
and "Bank" shall be construed accordingly;
"Bank Transferee" has the meaning attributed thereto in Clause 21;
"Borrowers" means all and each of the Company, the companies listed in
part A of Schedule 5 and any other member of the Group that becomes a
party to the Agreement pursuant to Clause 3.4 and "Borrower" shall be
construed accordingly;
"Business Day" means a day on which banks and foreign exchange markets are
open in London for the transaction of business of the nature required by
this Agreement and also, in relation to a day on which payments are
required to be made in an
Alternative Currency, in the place where the main domestic market for such
Alternative Currency is situated;
"Capital Expenditure" has the meaning attributed to it by Generally
Accepted Accounting Principles and, for the avoidance of doubt, shall not
include Vehicle Leases;
"Certified Copy" means, in relation to any document, a copy of such
document bearing the endorsement "Certified a true, complete and accurate
copy of the original, which has not been amended otherwise than by a
document, a Certified Copy of which is attached hereto" signed and dated
by a duly authorised officer of the company in question;
"Change of Control" means a change in the ownership of the issued share
capital of the Company, where any person (whether alone or together with
any associated person or persons) becomes the beneficial owner of shares
in the issued share capital of the Company carrying the right to exercise
more than 50 per cent. of the votes exercisable at a general meeting of
the Company (for the purposes of this definition, "associated person"
means, in relation to any person, a person who is either (a) acting in
concert (as defined in the City Code on Take-Overs and Mergers) with such
aforesaid person or (ii) a "connected person" as defined in Section 839 of
the Income and Corporation Taxes Act 1988 of such aforesaid person);
"Charging Group Members" means the Company and each of its Subsidiaries
from time to time which has granted, or is by the terms hereof to grant, a
Guarantee and Debenture and "Charging Group Member" shall be construed
accordingly;
"Committed Proportions" means in relation to reductions of the Term Loan
Facility and the Revolving Loan Facility, X% and in relation to the
Overdraft Facility Y% where:
X%= Total Sterling Commitments less Total Overdraft Commitments
----------------------------------------------------------- x100
Total Sterling Commitments
Y%= Total Overdraft Commitments
---------------------------- x 100;
Total Sterling Commitments
"Commitment" means, in relation to each Bank, its Term Loan Commitment,
its Revolving Loan Commitment and its Overdraft Commitment;
"Conditions Precedent" means each of the conditions set out in Clause 2;
"Convertible Capital Bonds" means the (pound)60,000,000 9 1/2 per cent.
Convertible Capital Bonds due 2006 issued by ASH Jersey and guaranteed on
a subordinated basis by the Company;
"Deed of Accession" means a deed substantially in the form set out in
Schedule 6;
"Default" means any of the events specified in Clause 15.1;
"Default Occurrence" means any event, occurrence or omission which with
the passing of time, giving of notice or satisfaction of any other
condition, in each case, under Clause 15.1 would be a Default;
"Depreciation" has the meaning attributed to it by Generally Accepted
Accounting Principles and, for the avoidance of doubt, includes any losses
on cancelled contracts;
"Disposal" means a sale, transfer, or other disposal (including by way of
lease or otherwise) after the date hereof of all or any part of the assets
or property of any member of the Group whether by one transaction or a
series of transactions;
"Disposal Proceeds" means, in respect of a Disposal, the gross
consideration receivable by such company for such Disposal less all costs
and expenses including Tax directly incurred in respect of such Disposal
(which shall not include the success fees referred to in Clause 18.6 or in
clause 3 of the First Amendment and any yield premium payable in respect
of the US Loan Notes);
"Dormant Company" means a company which is dormant within the meaning of
Section 250(3) of the Companies Act 1985, the gross assets of which do not
exceed (pound)5,000 in value;
"Drawdown Date" means any date, being a Business Day, on which an Advance
is made, or is proposed to be made pursuant to a Drawdown Notice;
"Drawdown Notice" means a notice substantially in the form set out in
Schedule 2;
"EBITDA" means, for any period, the consolidated profit on ordinary
trading activities of the Group for that period before Taxation and Total
Debt Costs,
PLUS:
(i) the amount of Depreciation charged by the Group in such period;
(ii) the amount of intangible assets amortised or written off through the
Company's consolidated profit and loss account during such period;
and
(iii) to the extent not taken account of in (ii) above, the amount of the
most recent book value of an asset written off through the said
profit and loss account during such period on a Disposal of such
asset where the Disposal Proceeds in respect of such Disposal are
applied in accordance with the terms of this Agreement;
LESS:
(i) profit attributable to minority interests; and
(ii) profit made on the Disposal (other than a Disposal permitted under
Clause 14.3(b)(i) to (iii)) of an asset in such period by a member
of the Group,
and for the avoidance of doubt, taking no account of:
(a) extraordinary items; and
(b) interest receivable and similar income;
"Encumbrance" means any mortgage, charge, assignment for the purpose of
security, pledge, lien, rights of set-off, arrangements for retention of
title to goods, or hypothecation or trust arrangement for the purpose of,
or which has the effect of, granting security or other security interest
of any kind whatsoever or any agreement, whether expressed to be
conditional or otherwise, to create any of the same or any agreement
having a commercial effect substantially similar to any of the foregoing
or any agreement to sell or otherwise dispose of any asset on terms
whereby such asset is or may be leased to or re-acquired or acquired by
any member of the Group;
"Engagement" means any performance guarantee, bond or other instrument of
suretyship or payment (in any case, not being a direct credit substitute
to which the Bank of England from time to time attributes a credit
conversion factor of 100 per cent. for the purpose of risk asset weighting
calculations pursuant to 89/647/EC of 18th December 1989, or any successor
thereto) issued, undertaken or made or, as the case may be, to be issued,
undertaken or made, by the Working Capital Bank under the Uncommitted
Engagements Facility;
"Engagement Amount" means, in respect of an Engagement, the maximum amount
of the aggregate actual and/or contingent liabilities of the Working
Capital Bank under such Engagement;
"Environment" means all or any of the following media; air (including air
within buildings or other structures and whether above or below ground),
land (including buildings and any other structures or erections in, on or
under it and any soil and anything below the surface of land), land
covered with water and water (including sea, ground and surface water);
"Environmental Laws" means all statutes, treaties and conventions,
directives, regulations and all codes of practice or conduct, circulars
and guidance notes having legal or judicial import or effect whether of a
criminal, civil or administrative nature, and the rules of common law,
relating to or concerning:
(i) pollution or contamination of the Environment;
(ii) harm, whether actual or potential to mankind, living organisms or
ecological systems;
(iii) the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport or
handling of Hazardous Materials; and
(iv) the emission, leak, release or discharge into the Environment of
noise, vibntion, dust, flames, gas, odours, smoke, steam, effluvia,
heat, light, radiation (of any kind), infection, electricity or any
Hazardous Material and any matter or thing capable of constituting a
nuisance or any actionable tort of any kind in respect of such
matters;
"Excluded Disposal" means a Disposal referred to in any of Clauses
14.3(b)(i)-(v);
"Existing Facilities" means each of the facilities referred to in Clauses
4.1.1 (a)-(c) inclusive and 4.2.2;
"FASB" means the Financial Accounting Standards Board;
"Facilities" means all and each of the Term Loan Facility, the Revolving
Loan Facility, the Overdraft Facility and the Uncommitted Engagements
Facility and "Facility" shall be construed accordingly;
"Fees Letter" means the letter of even date herewith from the Agent to the
Borrowers relating to certain fees payable to the Agent and the Security
Trustee by the Company in relation to this Agteement and the Intercreditor
Agreement, being described on its face as the Fees Letter;
"Final Repayment Date" means 2nd January 1998 PROVIDED THAT if by 2nd
January 1998 either:
(i) the Company (and/or other members of the Group) has received the
Sterling Equivalent (calculated as at the date of receipt) of
US$100,000,000 in respect of the subscription for a new issue of
share capital (a "New Equity Raising") and applied the same in the
Sharing Proportions, in repayment of the Facilities and the US Loan
Notes; or
(ii) a member of the Group makes a Disposal which raises Disposal
Proceeds of at least US$50,000,000 (or its equivalent) ("Major
Disposal") and such Disposal Proceeds are applied in accordance with
Clause 9.5;
then the Final Repayment Date shall be 2nd April 1998;
"Finance Lease" means any lease, hire agreement, credit sale agreement,
purchase agreement, conditional sale agreement or instalment sale and
purchase agreement which should be treated in accordance with SSAP 21 or
FASB 13 as appropriate (or any successor thereto) as a finance lease or in
the same way as a finance lease;
"Finance Lease Expenditure" means the capital value of any assets the
subject of a Finance Lease to which a company within the Group is a party;
"Financial Year" in relation to a company has the meaning ascribed to such
expression by section 223 of the Companies Act 1985;
"First Amendment" means the document referred to in Clause 2(a)(viii);
"Financing Documents" means this Agreement, the Side Letter, the
Intercreditor Agreement, the Security Documents and the Fees Letter;
"FRS" together with a number means the financial reporting standard issued
by the Accounting Standards Board and identified by reference to that
number;
"Generally Accepted Accounting Principles" means, in relation to a
company, accounting principles, concepts, bases and policies generally
adopted and accepted in the jurisdiction of its incorporation;
"General Terms" means the general terms and conditions of Midland Bank
plc, in the agreed form;
"Group" means the Company and each of its Subsidiaries from tune to time;
"Guarantee" means a guarantee in the agreed form;
"Guarantee and Debenture" means a guarantee and debenture in the agreed
form;
"Hazardous Materials" means any element or substance, whether natural or
artificial, and whether consisting of gas, liquid, solid or vapour,
whether on its own or in any combination with any other element or
substance, which is listed, identified, defined or determined by any
Environmental Law to be, to have been, or to be capable of being or
becoming harmful to mankind or any living organism or damaging to the
Environment;
"Indebtedness" means, in relation to any person, its obligation (whether
present or future, actual or contingent and whether incurred as principal
or surety) for the payment or repayment of money (whether in respect of
interest, principal or otherwise) incurred in respect of any of
(i) monies borrowed or raised;
(ii) any bond, note, loan stock, debenture or similar instrument;
(iii) acceptance credit, bill discounting, note purchase, factoring
facilities or documentary credit facilities;
(iv) payment obligations under Finance Leases;
(v) guarantees, bonds, stand-by letters of credit or other similar
instruments issued in connection with the pefformance of contracts;
(vi) interest rate or currency swap agreements or any other hedging
instrument in respect of interest rates or currencies;
(vii) any arrangement entered into primarily as a method of raising
finance pursuant to which any asset disposed of by a member of the
Group is to be or may be re-acquired or acquired by a member of the
Group (whether following the exercise of an option or otherwise);
and
(viii) counter-indemnities, guarantees or other assurances against
financial loss in respect of the liability or obligation of any
person falling within any of paragraphs (i) to (vii) above;
"Intercreditor Agreement" means the intercreditor agreement executed, or
to be executed, by the Company, the Agent, the Banks, the Working Capital
Bank and the US Loan Note Holders;
"Interest Date" means the last day of an Interest Period;
"Interest Period" means each period determined in accordance with Clause
8.2 or, as the case may be, Clause 8.3 for the purpose of calculating
interest on Advances or overdue amounts respectively;
"Issue Date" means any date, being a Business Day on which an Engagement
is issued, or is to be issued, pursuant to an Engagement Request;
"Jersey Debenture" means the debenture dated 23rd August 1991 between the
Company and ASH Jersey setting out the terms and conditions of the loan of
(pound)58,250,000 made by ASH Jersey to the Company;
"Lending Office" means, in relation to each Bank, the lending office
details of which are set out in Schedule 1 or the relative Transfer
Certificate or such other lending office in the United Kingdom through
which its Commitment is maintained and through which its Participation is
made and maintained under this Agreement;
"LIBOR" in relation to any Advance or overdue sum means, on any day, the
London Interbank Offered Rate for deposits in the specified currency,
being determined by the Agent to be either:
(i) the arithmetic mean (rounded upwards, if not already such a
multiple, to the nearest whole multiple of 0.005 per cent. per
annum) of the offered quotations for the specified term which appear
on the relevant page (being currently page "LIBP" in the case of
Sterling and page "LIBO" in the case of Alternative Currencies) of
the Reuter Monitor Money Rates Service for the display of the London
Interbank Offered Rates in such currency of leading banks (or, if
such page or such service shall cease to be available, such other
page or such other service (as the case may be) for the purpose of
displaying the London Interbank Offered Rates in such currency of
leading banks as the Agent after consultation with the Banks and the
Company shall select) as at 11.00 a.m. if the relative currency is
Sterling, on the first day of the relative Interest Period or, where
the relative currency is an Alternative Currency, 2 Business Days
prior to such first day; or
(ii) if less than two quotations for the specified currency or the
specified term appear on such display, or if no such display rate is
then available for such period or currency and, at such time, the
Agent has not selected any alternative service as contemplated in
(i) above, the arithmetic mean (rounded upwards, if not already such
a multiple, to the nearest whole multiple of 0.005 per cent. per
annum) of the respective rates notified to the Agent by each of the
Reference Banks as the rate at which it is offered deposits in an
amount approximately equal to the relevant Advance or overdue sum in
the specified currency and for the specified term by prime banks in
the London Interbank Market at 11.00 a.m. if the relative currency
is Sterling, on the first day of the relative Interest Period or,
where the relative currency is an Alternative Currency, 2 Business
Days prior to such first day,
and for the purpose of the definition "specified currency" means the
currency of such Advance or, as the case may be, overdue sum and
"specified term" means the term of such Advance or, as the case may be,
the period in respect of which LIBOR falls to be determined on that day in
relation to such overdue sum;
"Loan" means the Term Loan or the Revolving Loan;
"Major Disposal" has the meaning ascribed to such term in the definition
of Final Repayment Date;
"Majority Banks" means a majority in number of the Banks whose Sterling
Commitments comprise at least 51 per cent. of the Total Sterling
Commitments;
"Majority Creditors" means a majority in number (on the basis that an
institution can be counted once only) of the Banks, the Working Capital
Bank and the US Loan Notes Holders whom are owed not less than 51 per
cent. of the aggregate indebtedness under the Facilities and the US Loan
Notes;
"Mandatory Liquid Asset Costs" means, in relation to each Bank, the
additional cost to such Bank of compliance with the reserve asset ratio
from time to time required by the Bank of England expressed as a rate per
cent. per annum, in accordance with the formula set out in Schedule 3,
"Margin" means 1.50 per cent. per annum PROVIDED THAT the Margin shall
reduce to:
(i) 1.25 per cent. per annum as and from the date upon which the Total
Sterling Commitments are reduced to an amount not greater than
(pound)50,000,000;
(ii) 1.00 per cent. per annum as and from the date upon which the Total
Sterling Commitments are reduced to an amount not greater than
(pound)45,000,000; and
(iii) 0.75 per cent. per annum as and from the date upon which the Total
Sterling Commitments are reduced to an amount not greater than
(pound)30,000,000;
"Material Adverse Effect" means a material adverse effect on:
(i) ability of any member of the Group to perform its payment
obligations under any of the Financing Documents; or
(ii) the financial or business condition of the Group taken as a whole;
"Material Subsidiary" means any Subsidiary of the Company whose gross
assets or turnover is greater than (pound)50,000 and the book value of the
assets of which exceeds 10 per cent. of the book value of the assets of
the Group or the net profits of which exceed 10 per cent. of the net
profits of the Group or the turnover of which exceeds 10 per cent. of the
turnover of the Group PROVIDED THAT if the aggregate Material Subsidiaries
and the Company do not account for at least 80 per cent. of the aggregate
book value of the assets of the Group and at least 80 per cent. of the
aggregate net profits of the Group and at least 80 per cent. of the
aggregate turnover of the Group, then the 10 per cent. requirement
referred to above shall be deemed to decrease in 1 per cent. increments to
the extent necessary in order that such 80 per cent. levels are satisfied
by the Material Subsidiaries and the Company (the said book values, net
profits and turnover to be determined at any relevant time by reference to
such Subsidiary's most recent annual audited financial statements and the
Group's then most recent annual Accounts delivered to the Agent under
Clause 14.1(a));
"New Equity Raising" has the meaning ascribed to such term in the
definition of Final Repayment Date;
"Original Sterling Amount" means:
(i) in relation to any Advance or any Engagement denominated in
Sterling, the amount of such Advance or, as the case may be, the
Engagement Amount of such Engagement; and
(ii) in relation to any Advance or any Engagement denominated in an
Alternative Currency, the Sterling Equivalent of such Advance or, as
the case may be, the Engagement Amount of such Engagement calculated
in respect of the Drawdown Date of such Advance or, as the case may
be, the Issue Date of such Engagement;
"Overdraft Commitment" means, in relation to each Bank, the principal
amount described as such set opposite its name in Schedule 1 or the
Schedule to any relative Transfer Certificate, in each case as reduced or
cancelled under the terms of this Agreement;
"Overdraft Facility" means the overdraft facility referred to in Clause
3.1.1 (a)(iii);
"Overdraft Facility Limit" means, subject to Clauses 9 and 10,
(pound)3,609,782;
"Overdraft Outstandings" means, at any time, the aggregate of all amounts
of principal outstanding by way of overdraft under the Overdraft Facility
at such time less all credit balances which may be taken into account by a
Bank with an Overdraft Commitment for providing overdrafts on a net basis
for risk exposure purposes according to the Bank of England's requirements
from time to time;
"Participation" means in relation to a Bank and an Advance or a Loan, the
part of such Advance or such Loan, as the case may be, made available or
to be made available by such Bank and thereafter the part of such Advance
or such Loan, as the case may be, owing to such Bank from time to time;
"Permitted Encumbrance" means:
(a) any Encumbrances created under the Financing Documents;
(b) any liens arising in the ordinary course of trading activities;
(c) any agreement for retention of title to goods or any agreement to
sell or otherwise dispose of any asset on terms whereby such asset
is or may be leased or re-acquired or acquired, in each case,
arising in the ordinary course of trade;
(d) any rights of set-off arising by operation of law or as a result of
operating banking facilities entered into in the ordinary course of
trade on a net limit basis for cash management purposes;
(e) an Encumbrance over an asset of a company which becomes a Subsidiary
of the Parent (other than by reason of its incorporation) after the
date hereof being an Encumbrance which is in existence at the time
at which such company becomes such a Subsidiary but only if (i) such
Encumbrance was not created in contemplation of such company
becoming such a Subsidiary, (ii) the principal amount secured by
such Encumbrance has not been and shall not be increased and (iii)
such Encumbrance is discharged within 6 months of the date on which
such company becomes such a Subsidiary;
(f) an Encumbrance over an asset acquired by a Group Company after the
date hereof and subject to which such asset is acquired but only if
(i) such Encumbrance was not created in contemplation of its
acquisition by a Group Company, (ii) the amount thereby secured has
not been increased in contemplation of; or since the date of, its
acquisition by a Group Company and (iii) such Encumbrance is
discharged within 6 months of the date of its acquisition by a Group
Company;
(g) any Encumbrance which has been disclosed to the Agent prior to the
date of this Agreement and where the amount thereby secured has not
been increased above the amount so secured as at the date of such
disclosure;
(h) any Encumbrance created after the date hereof over all or any of the
assets of Modern Security Systems Limited (a company incorporated in
Ireland) as security for a banking facility made available to such
company and which is committed for a period of at least 364 days;
and
(i) any other Encumbrances securing indebtedness, where the aggregate
value of assets the subject of such Encumbrances does not exceed
(pound)1,000,000;
"Permitted Indebtedness" means:
(i) Indebtedness outstanding under the Financing Documents;
(ii) Indebtedness outstanding under the US Loan Notes;
(iii) Indebtedness under the AIB Facility or a replacement committed
banking facility therefor on substantially the same terms and
conditions not exceeding the aggregate of (aa) the facility amount
of the AIB Facility at the date hereof and (bb) 10 per cent. of the
amount referred to in (aa) above;
(iv) Indebtedness under the Sanwa Facility or a replacement committed
banking facility therefor on substantially the same terms and
conditions not exceeding the aggregate of (aa) the facility amount
of the Sanwa Facility at the date hereof and (bb) 10 per cent. of
the amount referred to in (aa) above;
(v) Indebtedness between companies within the Group;
(vi) Indebtedness under (a) Finance Leases existing at the date hereof)
any Vehicle Lease, and (c) Finance Leases entered into after the
date hereof by members of the Group as lessees where the Finance
Lease Expenditure under such Finance Leases does not exceed, in
aggregate, (pound)2,000,000;
(vii) Indebtedness under agreements entered into, or to be entered into,
by the Company for the purpose of hedging the Company's interest
rate or other liabilities in relation to all or any part of the Term
Loan Facility and/or the US Loan Notes;
(viii)Indebtedness incurred by members of the Group under sale and
repurchase arrangements entered into in the ordinary course of trade
of the Group in respect of leases, or upgrades of existing leases,
in each case, entered into after the date hereof; and
(ix) Indebtedness payable on demand or within one year of the date of
incurrence and which is incurred by members of the Group
incorporated outside the United Kingdom for working capital purposes
where the
aggregate principal amount of such Indebtedness does not exceed
(pound)1,000,000;
"PRICOA" means The Prudential Insurance Company of America;
"Oualifying Bank" means an institution which is recognised by the United
Kingdom Inland Revenue as carying on through its Lending Office for the
purposes hereof a bona fide banking business in the United Kingdom for the
purposes of section 349(3) of the Income and Corporation Taxes Act 1988;
"Quarter Day" means each of 28th February, 31st May, 31st August and 30th
November;
"Recurring UK Annual Rental Income" means, in respect of a period, the
annual UK rental income as stated in the Accounts of the Company for such
period which, for the avoidance of doubt, includes line revenue;
"Reference Banks" means the principal London offices of Midland Bank plc,
ABN AMRO Bank N.V. and Lloyds Bank Plc and such other Bank or Banks as
the Agent may (with the agreement of the Majority Banks and the Company)
select from time to time.
"Refinancing Date" means the date on which all of the Conditions Precedent
are satisfied;
"Relevant Date" has the meaning attributed to it in Clause 18.6;
"Revolving Advance" means an advance drawn down under the Revolving Loan
Facility and thereafter the principal amount of each such advance from
time to time outstanding;
"Revolving Commitment Period" means the period from and including the date
hereof to but excluding the date falling one month prior to the Final
Repayment Date;
"Revolving Facility Limit" means, subject to Clauses 9 and 10,
(pound)56,345,842;
"Revolving Loan" means, at any time, the aggregate of all Revolving
Advances then outstanding under the Revolving Loan Facility;
"Revolving Loan Commitment" means, in relation to each Bank, the principal
amount described as such set opposite its name in Schedule 1 or the
Schedule to any relative Transfer Certificate, in each case as reduced or
cancelled under the terms of this Agreement;
"Revolving Loan Facility" means the revolving loan facility referred to in
Clause 3.1.1(a)(ii);
"Sanwa" means Sanwa Bank California;
"Sanwa Facility" means the facilities made available under the facility
agreement dated 27th September 1994 and 21st August 1995 between Sanwa and
API, as amended from time to time;
"SC" means Sonitrol Corporation, a company incorporated under the laws of
the State of Delaware, having its principal office at 1800 Diagonal Road
Suite, 180 Alexandria VA 22314;
"Security Documents" means:
(i) each Guarantee and Debenture executed by a company within the Group;
(ii) each Guarantee executed by ASC, ASHI, SMC and SC;
(iii) each Share Pledge executed by ASC and ASHI; and
(iv) any guarantees and documents creating security executed and
delivered after the date hereof as security for any of the
obligations and liabilities of any Borrower and the other companies
within the Group under any of the Financing Documents;
"Security Period" means the period starting on the date hereof and ending
on the date on which all of the obligations and liabilities of the members
of the Group under each of the Financing Documents are discharged in full
and none of the Agent, the Working Capital Bank and the Banks has any
continuing obligation in relation to the Facilities;
"Security Trustee" means Lloyds Bank Plc in its capacity as such as
appointed under the Intercreditor Agreement and any successor appointed
pursuant to Clause 3 of the Intercreditor Agreement;
"Share Pledge" means a pledge of shares, in the agreed form, executed, or
to be executed by each of ASC (under which it pledges to the Security
Trustee the shares of SC, ASHI and SMC) and ASHI (under which it pledges
to the Security Trustee 10 per cent of the shares of API);
"Sharing Proportions" has the meaning ascribed to such term in the
Intercreditor Agreement;
"Side Letter" has the meaning attributed to such term in Clause 2(a)(vii);
"SMC" means Sonitrol Management Corporation, a company incorporated under
the laws of the State of Delaware, having its principal office at 8 Campus
Circle Suite 150 Westlake TX 76262;
"SSAP" together with a number means the statement of standard accounting
practice issued by the Accounting Standards Board and identified by
reference to such number;
"Sterling", "Pounds" and "(pound)" means the lawful currency for the
time being of the United Kingdom;
"Sterling Commitments" means, in respect of a Bank, at any time, the
aggregate of:
(i) the Revolving Loan Commitments and the Overdraft Commitments of such
Bank at such time; and
(ii) the equivalent in Sterling of the Term Loan Commitments of such Bank
at such time on the basis of an exchange rate of US$l.5916 to
(pound)1;
"Sterling Equivalent" means, in relation to an amount in an Alternative
Currency on the day on which the calculation falls to be made, the amount
of Sterling which could be purchased with such amount of such Alternative
Currency on the basis of the Agent's spot buying rate for Sterling with
such Alternative Currency at or about 11.00 a.m. on the second Business
Day immediately prior to that date;
"Subsidtary" has the meaning ascribed to it by section 736 of the
Companies Act 1985 and "Subsidiaries" shall be construed accordingly;
"Tangible Net Worth" means the aggregate amount of the paid up share
capital of the Company including amounts standing to the credit of the
share premium account and any capital redemption reserves plus or minus
the aggregate amount standing in the Group's capital and revenue reserves
(on a consolidated basis):
(a) adjusted as may be appropriate to take account of any variation in
such share capital account and share premium account since the date
to which such accounts shall have been made up;
(b) deducting any amounts attributable to any intangible asset included
as an asset in the consolidated balance sheet including amounts
attributable to goodwill;
(c) excluding any capital accounts or reserves derived from any writing
up of book value of any assets of a member of the Group above
historic cost less accumulated Depreciation at any time after 30th
November 1994;
(d) adding or deducting, as the case may be, any credit or debit balance
(but not to the extent that the same arises as a result of any
extraordinary items) on the Company's consolidated profit and loss
account attributable to the period in relation to which the
calculation falls to be made;
(e) deducting any profit made on a Disposal (other than a Disposal
permitted under Clause 14.3(b)(i) to (iii)) of any asset by a member
of the Group; and
(f) adding the amount written off the most recent book value of an asset
on the Disposal of such asset where the Disposal Proceeds in respect
of such Disposal are applied in accordance with the terms of this
Agreement;
"Tax" includes all present and future taxes, charges, imposts, duties,
levies, deductions, withholdings or fees of any kind whatsoever, or any
amount payable on account of or as security for any of the foregoing, in
each case payable at the instance of or imposed by any statutory,
governmental, international, state, federal, provincial, local or
municipal authority, agency, body or department whatsoever or monetary
agency or European Community institution, in each case whether in the
United Kingdom or elsewhere, together with any penalties, additions,
fines, surcharges or interest relating thereto and "Taxes" and "Taxation"
shall be construed accordingly;
"Tax Liability" means in respect of any person:
(a) any liability or any increase in the liability of that person to
make any payment or payments of or in respect of Tax;
(b) the loss or setting-off against income, profits or gains or against
any Tax liability of any relief, allowance, deduction or credit in
respect of Tax which would otherwise have been available to that
person; and
(c) the loss or setting-off against any Tax liability of a right to
repayment of Tax which would otherwise have been available to that
person.
For the purposes of this definition any question of whether or not any
relief, allowance, deduction, credit or right to repayment of Tax has been
lost or set-off, and if so, the date on which that loss or set-off took
place, shall be conclusively determined by the relevant person's auditors;
"Tax on Overall Net Income" means, in relation to a Bank, Tax (other than
Tax deducted or withheld from any payment) imposed on such Bank on its net
income by the jurisdiction in which either its Lending Office or its head
office is situated;
"Term Advance" means the advance drawn down under the Term Loan Facility
and thereafter the principal amount of each such advance from time to time
outstanding and each advance into which a Term Advance is split pursuant
to Clause 8.2.4;
"Term Loan" means, at any time, the aggregate of all Term Advances then
outstanding under the Term Loan Facility;
"Term Loan Commitment" means, in relation to each Bank, the principal
amount described as such set opposite its name in Schedule 1 or the
Schedule to any relative Transfer Certificate, in each case as reduced or
cancelled under the terms of this Agreement;
"Term Loan Facility" means the term loan facility referred to in Clause
3.1.1 (a)(i);
"Total Debt Costs" means, in relation to a period of time, the aggregate
of:
(i) all interest, fees, commissions and other periodic financing charges
accrued due in relation to Indebtedness by any member of the Group
during such period excluding (a) the fees and commissions payable
pursuant to Clause 18 and Clause 3 of the First Amendment, (b) all
bank charges and transmission costs incurred in connectionn with the
Overdraft Facility and any overdraft provided under the Existing
Facilities, and (c) any professional fees incurred in connection
with this Agreement and the US Loan Notes;
(ii) all amounts accrued due by members of the Group during such period
under interest rate protection agreements (less any amounts accrued
due to members of the Group during such period under interest rate
protection agreements); and
(iii) the interest element of all rentals or, as the case may be, other
payments accrued due in such period under any Finance Lease (not
being Vehicle Leases) to which any member of the Group is a party;
less, all interest and other similar income accrued to members of the
Group during such period;
"Total Gross Debt" means the aggregate of
(i) the Term Loan;
(ii) the Revolving Loan;
(iii) the Overdraft Outstandings;
(iv) the amount of the US Loan Notes as shown in the Company's balance
sheet;
(v) Indebtedness of members of the Group relating to the payment or
repayment of principal in respect of paragraphs (i) to (iii)
inclusive in the definition of Indebtedness but not including
the items referred to at (i)-(iv) above;
(vi) the amount of the Convertible Capital Bonds as shown in the
Company's balance sheet; and
(vii) the capital element of all rentals or, as the case may be, other
payments payable under all Finance Leases (not being Vehicle Leases)
to which any member of the Group is a party,
PROVIDED THAT any amount standing to the credit of an Application Account
(as defined herein or the US Loan Notes Instrument) and the Disposal
Proceeds of the Disposals of Modern Vitalcall Limited and Modern
Integrated Services shall be
assumed to have been applied against the Facilities and the US Loan Notes
as required by the terms of this Agreement, the Existing Facilities and
the US Loan Note Instrument;
"Total Overdraft Commitments" means the aggregate of the Banks' Overdraft
Commitments;
"Total Revolving Loan Commitments" means the aggregate of the Banks'
Revolving Loan Commitments;
"Total Sterling Commitments" means the aggregate of the Banks' Sterling
Commitments;
"Total Term Loan Commitments" means the aggregate of the Banks' Term Loan
Commitments;
"Transfer Certificate" means a transfer certificate in substantially the
form set out in Schedule 4;
"UITF" means together with a number the Urgent Issues Task Force issued by
the Accounting Standard Board and identified by reference to such number;
"Uncommitted Engagements Facility" means the engagements facility referred
to in Clause 3.1.1(b);
"Uncommitted Engagements Facility Limit" means, subject to Clauses 9 and
10, (pound)1,500,000;
"US Dollars" and "US$" means the lawful currency for the time being of the
United States of America;
"US Loan Note Holders" means the holders for the tune being of the US Loan
Notes;
"US Loan Notes" means the Company's $60,721,638, 8.28 per cent. senior
notes due 1998;
"US Loan Notes Instrument" means the Note Agreement dated as of May 27,
1994 between the Company and PRICOA as amended by the First Amendment;
"VAT" means value added tax as provided for in the Value Added Tax Act
1994 and legislation (whether delegated or otherwise) supplemental thereto
or in any primary or secondary legislation promulgated by the European
Community or any official body or agency thereof and any similar or
turnover Tax replacing or introduced in addition to any of the same;
"Vehicle Leases" means all types of leases of vehicles accounted for in
the Company's Accounts at the date of this Agreement as not being Finance
Leases
whether or not such accounting treatment continues after the date of this
Agreement; and
"Working Capital Bank" means Midland Bank plc.
1.2 Clause Headings
Clause headings are for convenience of reference only and shall not affect
the construction of any of this Agreement.
1.3 Interpretation
In this Agreement, unless the context otherwise requires:
(a) references to this Agreement include the Schedules;
(b) references to Clauses and Schedules are to be construed as
references to the Clauses of, and Schedules to, this Agreement as
amended from time to time;
(c) references to any person shall be construed so as to include that
person's assigns, transferees or successors in tide;
(d) references to statutes and other legislation shall include all
re-enactments and amendments thereof;
(c) references to (or to any specified provisions of) any Financing
Document or any other document shall be construed as references to
such Financing Document, that provision or that document as amended
or novated or supplemented, as the case may be, from time to time;
(d) references to a document being in the "agreed form" are to the form
of such document as is initialled by Messrs. Wilde Sapte on behalf
of the Agent and Messrs. Clifford Chance on behalf of the Company as
being in the agreed form for the purposes of this Agreement;
(g) accounting terms shall be construed so as to be consistent with
Generally Accepted Accounting Principles;
(h) references to the singular shall include the plural and vice versa
and references by way of male, female or neuter pronoun shall
include references to all genders;
(i) the words "including" and "in particular" shall be construed as
being by way of illustration or emphasis only and shall not be
construed as, nor shall they take effect as, limiting the generality
of any foregoing words; and
(j) save where the contrary is indicated, where there is a reference in
this Agreement to any amount, limit or threshold specified in
Sterling, in ascertaining whether or not such amount, limit or
threshold has been attained, broken or achieved, as the case may be,
non-Sterling amounts shall be counted on the basis of the Sterling
Equivalent thereof
2. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement, none of the Agent,
the Banks and the Working Capital Bank shall be under any obligation
whatsoever to make the Facilities available unless each of the following
conditions are fulfilled on or prior to 22nd December 1995:
(a) the Agent shall have received each of the following in form and
substance satisfactory to it:
(i) a Certified Copy of the certificate of incorporation (and any
relative certificate of incorporation on change of name) and
the memorandum and articles of association (or the equivalent
constitutional documents) of each company listed in Part A of
Schedule 5;
(ii) a Certified Copy of the board minutes and resolutions of each
company listed in Part A of Schedule 5 approving and
authorising the execution, delivery and performance of each of
the Financing Documents to which such company is a party on
the terms and conditions thereof and authorising a person or
persons to sign or otherwise attest the due execution of such
documents and any other documents to be executed or delivered
by such company pursuant thereto together with a certificate
of a duly authorised officer of such company setting out the
names and signatures of the persons authorised to sign such
documents on behalf of such company;
(iii) Certified Copies of all consents, licences, approvals or
authorisations of any governmental or other authority, bureau
or agency required by each company listed in Part A of
Schedule 5 in connection with the execution, delivery,
performance, validity or enforceability of the Financing
Documents or any document to be delivered thereunder;
(iv) the Fees Letter duly accepted by the Company together with the
fees payable on the date hereof pursuant to Clause 18;
(v) a legal opinion from Messrs. O'Sullivan Graev & Karabell LLP;
(vi) a legal opinion from Messrs. Mourant du Feu & Jeune;
(vii) a letter from the Company addressed to the Agent, the Banks
and the Working Capital Bank regarding certain ancillary
matters (the "Side Letter"); and
(viii)a first amendment in respect of the US Loan Notes Instrument
duly executed by the parties thereto together with a copy of
the Effective Date Notice (as defined therein); and
(b) the Security Trustee shall have received each of the following in
form and substance satisfactory to it:
(i) a Guarantee and Debenture duly executed by each of the Company
and the companies listed in Part A of Schedule 5;
(ii) a Guarantee duly executed by each of ASC, SMC, ASHI and SC;
(iii) a Share Pledge duly executed by ASC in respect of all the
shares of SMC, SC and ASHI;
(iv) a Share Pledge duly executed by ASHI over not more than 10 per
cent of the shares of API; and
(v) the Intercreditor Agreement duly executed by the parties
thereto;
together with, in each case, all documents deliverable therewith.
3. FACILITIES
3.1 Facilities
3.1.1 Upon and subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties in Clause 13:
(a) the Banks agree to make available:
(i) to the Company a US Dollar term loan facility in the maximum
principal amount of US$40,000,000;
(ii) to the Company a multi-currency revolving loan facility in the
maximum principal amount of (pound)56,345,842; and
(iii) to the Borrowers a Sterling overdraft facility in the maximum
principal amount of (pound)3,609,782; and
(b) the Working Capital Bank agrees to make available to the Borrowers
an uncommitted multi-currency engagements facility in the maximum
principal amount of (pound)1,500,000.
3.1.2 For the avoidance of doubt, it is hereby declared that, notwithstanding
any other provision of this Agreement:
(i) the Term Loan shall not, at any time, exceed the Total Term Loan
Commitments;
(ii) the Original Sterling Amount of all Revolving Advances shall not, at
any time, exceed the Total Revolving Loan Commitments;
(iii) the Overdraft Outstandings shall not, at any time, exceed the Total
Overdraft Commitments; and
(iv) the Original Sterling Amount of all the Engagements shall not, at
any time, exceed the Uncommitted Engagements Facility Limit.
3.2 Obligations Several
3.2.1 The obligations of each of the Banks and the Working Capital Bank under
this Agreement are several.
3.2.2 The failure of any of the Agent, the Banks and the Working Capital Bank to
carry out its obligations under this Agreement shall not relieve any other
party hereto of any of its obligations and liabilities under this
Agreement.
3.2.3 None of the Banks, the Agent and the Working Capital Bank shall be
responsible for the obligations of any other Bank, the Working Capital
Bank or the Agent under this Agreement.
3.3 Rights Several
3.3.1 Without prejudice to the provisions of this Agreement relating to or
requiring action by all or any of the Banks, the rights of each of the
Banks, the Working Capital Bank and the Agent are several and all amounts
due, and obligations owed, to each of them are separate and independent
debts or, as the case may be, obligations.
3.3.2 Each Bank, the Working Capital Bank and the Agent may, except as otherwise
stated in this Agreement, separately enforce its rights under this
Agreement.
3.4 Additional Borrowers
3.4.1 The Company may, on giving written notice to the Agent, nominate a member
of the Group incorporated in England and Wales as an additional Borrower
for the purposes of the Overdraft Facility and the Engagement Facility.
3.4.2 A company wishing to become an additional Borrower shall execute and
deliver a Deed of Accession to the Agent together with all the documents
referred to in the Schedule to such Deed of Accession, each in form and
substance satisfactory to the Agent.
3.4.3 A company shall accede hereto as a Borrower on the Agent counter-signing
the relevant Deed of Accession.
4. PURPOSE
4.1 Purpose of the Term Loan Facility
4.1.1 The proceeds of the Term Loan Facility shall be used to refinance:
(a) the facilities made available under the facility agreement dated 19th May
1989 made between the Company, Lloyds Bank Plc as tender agent and
facility agent, certain banks and tender panel members (as amended);
(b) the bilateral facility made available under the facility agreement dated
28th March 1995 between ABN Amro Bank N.V. and the Company (as amended);
and
(c) the bilateral facility made available under two letters dated 10th October
1989 and 23rd October 1991 respectively addressed by Barclays Bank PLC to
the Company (as amended).
4.1.2 The Term Loan Facility is available for utilisation by way of a single
Term Advance.
4.1.3 Each of the parties hereto agrees that upon the first Term Advance being
made each of the facilities referred to in Clauses 4.1.1 (a)-(c) inclusive
shall be automatically discharged and cancelled and subject to Clauses
5.6.9 and 5.6.10, for the avoidance of doubt, all obligations and
liabilities of the Banks and the Company in respect thereof shall be
automatically discharged.
4.2 Purpose of the Revolving Loan Facility, the Overdraft Facility and the
Engagements Facility
4.2.1 The proceeds of Revolving Advances may be used:
(i) for the same purpose as the Term Loan Facility;
(ii) for the general working capital purposes of the Group (but not to
make prepayment of the Term Loan); and
(iii) to repay maturing Revolving Advances.
4.2.2 The Overdraft Facility shall be used to refinance the overdraft and
ancillary facilities made available pursuant to two letters dated 24th
February 1994 and 1st September
1994 respectively (as amended) addressed by Midland Bank plc to certain
members of the Group but not to make prepayments of the Term Loan.
4.2.3 Each of the parties hereto agrees that upon the first drawing of a Term
Advance the facilities made available under the two letters referred to in
Clause 4.2.2 shall be automatically discharged and cancelled and, for the
avoidance of doubt, the future rights and obligations of the Company and
Midland Bank plc in respect thereof shall be automatically discharged.
4.2.4 The Uncommitted Engagements Facility shall be used for the general working
capital purposes of the Group.
4.3 Undertaking by the Borrowers
Each Borrower undertakes that it will use the Facilities only as permitted
by this Clause 4.
4.4 No Liability
None of the Agent, the Working Capital Bank nor any of the Banks shall be
concerned as to the use or application of the proceeds of the Advances or
the use or applications of amounts made available under the Overdraft
Facility or the Uncommitted Engagements Facility.
5. THE TERM LOAN FACILITY AND THE REVOLVING LOAN FACILITY
5.1 Utilisation of the Term Loan Facility
Subject to the other terms of this Agreement, the Term Loan Facility shall
be drawn down in one Term Advance of US$40,000,000 when requested by the
Company by means of a Drawdown Notice in accordance with Clause 5.3.
5.2 Utilisation of the Revolving Loan Facility
Subject to the other terms of this Agreement, Revolving Advances shall be
made to the Company at any time during the Revolving Commitment Period
when requested by the Company by means of a Drawdown Notice in accordance
with Clause 5.3.
5.2.2 Any portion of the Revolving Loan Facility which shall remain unused at
the close of business in London on the last day of the Revolving
Commitment Period shall be automatically cancelled at that time and the
Revolving Facility Limit and the Total Revolving Loan Commitments will be
reduced accordingly.
5.2.3 Revolving Advances may be denominated in Sterling or an Alternative
Currency but shall, unless the Agent shall agree otherwise, be in an
Original Sterling Amount of at least (pound)5,000,000 and be an integral
multiple of:
(i) if in Sterling, (pound)1,000,000;
(ii) if in US Dollars, US$1,000,000; and
(iii) if in any other Alternative Currency, such other multiple as the
Agent and the Company may agree.
5.2.4 No Revolving Advance shall be made if it would result in Revolving
Advances being outstanding with more than 4 different Interest
Dates.
5.3 Drawdown of Advances
5.3.1 Subject to Clause 5.6, whenever the Company wishes an Advance to be
made, it shall give a Drawdown Notice to the Agent to be received
not later than 3.30 p.m. (London time), in the case of an
Alternative Currency, three (3) Business Days prior to, but in the
case of Sterling, one (1) Business Day prior to, the relative
Drawdown Date or such shorter period as the Agent may allow PROVIDED
THAT no Drawdown Notice maybe served in respect of an Advance and no
Advance will be made:
(a) unless the Conditions Precedent shall have been satisfied; or
(b) if a Default or Default Occurrence has occurred and is
continuing or if a Default would occur on the making of such
Advance; or
(c) unless the representations and warranties deemed to be
repeated pursuant to Clause 13.3 on the relative Drawdown Date
are, or will be, true and accurate on the date on which the
relative Drawdown Notice is served and on the relative
Drawdown Date; or
(d) in respect of a Revolving Advance, if the making of such
Revolving Advance would cause the aggregate Original Sterling
Amount of all Revolving Advances to be greater than the
Revolving Facility Limit.
5.3.2 Subject always to the other terms of this Agreement, a
Drawdown Notice shall be irrevocable and the Company shall be
obliged to borrow in accordance with its terms.
5.3.3 Advances shall be made only on a Business Day.
5.4 Participations and Payments
5.4.1 Subject always to the other terms of this Agreement (including Clause
5.6), each Bank acting through its Lending Office, agrees to contribute
its Participation in each Advance, in, subject to Clause 7, the currency
of such Advance, the amount of its Participation being that proportion
which its unutilised Term Loan Commitment or Revolving Loan Commitment, as
the case may be, bears to the unutilised part of the Total Term Loan
Commitments or the Total Revolving Loan Commitments, as the case may be,
on the relative Drawdown Date.
5.4.2 Subject to Clause 5.6, each Bank shall on the relative Drawdown Date
advance to the Company its Participation in the requested Advance by
making available to the
Agent to such account as the Agent may have previously specified for this
purpose, not later than 11.00 am. (London time) (or 11.00a.m. local time
in the principal financial centre of the relevant Alternative Currency) on
such date in immediately available funds, an amount in the relevant
currency equal to such Participation and, subject to receiving the same,
the Agent will advance such amount to the Company or, as its directs, as
requested in the relative Drawdown Notice.
5.5 Drawdown Indemnity
If for any reason any Advance (or part thereof) is not made to the Company
on a Drawdown Date in accordance with the relative Drawdown Notice, the
Company shall indemnify each of the Banks in accordance with Clause 12.3.
5.6 Initial Funding
5.6.1 This Clause 5.6 applies notwithstanding any other provision hereof.
5.6.2 As at the date of this Agreement, there are advances (the "Existing
Advances") outstanding under those of the Existing Facilities referred to
in Clauses 4.1.1 (a)-(c) inclusive which mature on, respectively, 15th
January 1996, 3rd, 4th and 9th April 1996. The Existing Advances are to be
refinanced with the proceeds of the Term Advance of US$40,000,000 and the
first Revolving Advances in an aggregate amount up to the Revolving
Facility Limit (together the "First Advances"). On the Refinancing Date,
the Existing Advances shall be deemed to be refinanced with the proceeds
of the First Advances by the Banks on the basis that each Bank refinances
that part of the Existing Advances owed to such Bank and that the Interest
Periods relating to such Bank's Participation in the First Advances have
Interest Dates which are the same as those parts of the Existing Advances
which it refinances.
5.6.3 In respect of any part of the First Advances with an Interest Date of 3rd
or 4th April 1996, on such date, that part shall be deemed to be
refinanced with a Participation of the relevant Banks in an Advance with a
Interest Period expiring on 9th April 1996.
5.6.4 In respect of any part (the "Short Term Part") of the First Advances with
a corresponding Interest Date of 15th January 1996, on such date, the
Short Term Part shall be deemed to be refinanced with a Participation of
the relevant Banks in an Advance with an Interest Period expiring on 31st
March 1996. On 31st March 1996 the Short Term Part, to the extent not
applied in repayment and permanent reduction, of the Facilities shall be
deemed to be refinanced with a Participation of the relevant Banks in an
Advance with an Interest Period expiring on 30th June 1996.
5.6.5 The provisions of Clauses 5.6.2, 5.6.3 and 5.6.4 shall have automatic
effect and shall not require the service of any Drawdown Notice by the
Company.
5.6.6 On and from 9th April 1996 all Advances, other than those forming all or
part of the Short Term Part, shall be made and funded in accordance with
the other terms of this Agreement.
5.6.7 If, prior to 30th June 1996, the Agent serves notice under Clause 15.1,
the Banks shall promptly make such payments amongst themselves in order to
make their Participations in Advances what they would have been but for
Clauses 5.6.2 to 5.6.6 inclusive on the basis of the then current exchange
rates.
5.6.8 Prior to 30th June 1996, all prepayments of the Loans shall be applied as
they would have been if the relevant prepayment was made after 30th June
1996.
5.6.9 Interest on the First Advances (other than the Short Term Part) at the
rate currently applicable to the Existing Advances shall be paid on 5th
January 1996 and on the Interest Dates relating thereto and shall be
deemed to have accrued from the date on which the interest periods current
at the date hereof for the Existing Advances commenced.
5.6.10 Any commitment commission accrued but unpaid on undrawn amounts under the
Existing Facilities shall be paid by the Company on the date or dates it
would have been payable pursuant to the terms of the Existing Facilities.
5.6.11 Each of the Banks hereby authorise, and instruct the Facility Agent, to
transfer on the Refinancing Date, to the credit of any current account of
the Company which forms part of the Overdraft Facility, any monies
standing to the credit of a suspense account held with the Facility Agent
in connection with the Existing Facilities.
6. THE OVERDRAFT FACILITY AND THE UNCOMMITTED ENGAGEMENTS FACILITY
6.1 Nature of Overdraft Facility
6.1.1 The Overdraft Facility is made available to the Borrowers in accordance
with this Clause 6 and the General Terms.
6.1.2 No utilisation of the Overdraft Facility may be made prior to the
Refinancing Date and on the Refinancing Date all amounts outstanding under
the overdraft facilities forming part of the Existing Facilities shall be
deemed to have been made available under the Overdraft Facility and shall
automatically be treated thereafter as outstanding under the Overdraft
Facility.
6.1.3 A Borrower wishing to utilise the Overdraft Facility shall complete such
mandate and other documents as the relevant Bank shall reasonably require.
6.1.4 The Overdraft Facility shall cease to be available on the Final Repayment
Date or such earlier date on which it is cancelled or terminated in
accordance with the terms hereof.
6.2 Utilisation or Overdraft Facility
6.2.1 Subject to the other terms of this Agreement, each Bank, to the extent of
its Overdraft Commitment, agrees to make the Overdraft Facility available
on a
revolving basis to the Borrowers to be utilised on any Business Day by way
of overdraft on usual banking terms PROVIDED THAT, subject to Clause
6.2.2, no demand for repayment shall be made in respect thereof other than
in accordance with Clause 15.2.
6.2.2 Notwithstanding Clause 6.2.1, as and from any date on which the Overdraft
Outstandings exceed the Overdraft Facility Limit all amounts outstanding
under the Overdraft Facility shall automatically become repayable on
demand made by the Bank which makes available the relevant overdraft under
the Overdraft Facility.
6.2.3 No utilisation of the Overdraft Facility under Clause 6.2.1 shall be made
if it would result in the amounts outstanding by way of overdraft under
the Overdraft Outstandings exceeding the Overdraft Facility Limit.
6.2.4 For the avoidance of doubt, a Bank may, without liability, return cheques
unpaid and reflise to honour direct debits, Bankers Automated Clearing
System facilities, standing orders and any other payment orders if the
payment of such items would result in a breach of Clause 6.2.3.
6.3 Utilisation or the Uncommitted Engagements Facility
6.3.1 The Uncommitted Engagements Facility is uncommitted and the Working
Capital Bank shall not be obliged to issue, or enter into, any Engagement.
6.3.2 The Engagements Facility shall be available on normal banking terms
applicable to engagements and be subject to the General Terms.
6.3.3 Without prejudice to Clause 7.1 each Engagement will be denominated in
Sterling or an Alternative Currency.
6.3.4 An Engagement will only be issued or entered into on a Business Day.
6.3.5 Each Borrower hereby unconditionally and irrevocably agrees and undertakes
to the Working Capital Bank as follows.
(a) it will at all times indemnify the Working Capital Bank and keep the
Working Capital Bank indemnified from and against all actions,
suits, proceedings, claims, demands, liabilities, damages, costs,
expenses, losses and charges whatsoever in relation to or arising
out of any Engagement entered into, or issued, at the request of
such Borrower and such Borrower will pay the Working Capital Bank on
demand the amount of all payments made (whether directly or by way
of set-off, counterclaim or otherwise howsoever) and all losses,
costs and expenses suffered or incurred from time to time by the
Working Capital Bank under or by reason or in consequence of any
such Engagement and any of the aforesaid indemnities relating
thereto;
(b) save in the case of negligence, fraud or willful default on the part
of the Working Capital Bank:
(i) the Working Capital Bank is hereby irrevocably authorised by
each Borrower to comply with the terms of any demand served or
purporting to be served on the Working Capital Bank pursuant
to any Engagement without any reference to, or lurther
authority from, any Borrower and without any enquiry by the
Working Capital Bank into the justificationfor such. demand or
the validity thereof; and
(ii) each Borrower further agrees that any payment which the
Working Capital Bank shall make in accordance or purporting to
be in accordance with such a demand shall be binding on each
Borrower and be accepted by such Borrower as conclusive and
binding evidence that the Working Capital Bank was liable to
comply with the terms of such demand and was liable to do so
in the manner and for the amount in which the Working Capital
Bank effected such compliance;
(c) save as specifically provided in Clause 6.3.5(b) the liability of
each Borrower under this Clause 6.3.5 shall not be discharged,
lessened or impaired by any time being given or by any thing being
done or other circumstance whatsoever which, but for this provision,
would or might operate to exonerate or discharge such Borrower; and
(d) the indemnity contained in this Clause 6.3.5 shall constitute and be
a continuing security to the Working Capital Bank and the said
indemnity shall extend to each Engagement as it may, from time to
time, be varied, modified, amended or extended.
6.3.6 Each Borrower hereby agrees that it shall pay to the Working Capital Bank
interest on the amount of each payment, loss, cost and expense made,
suffered or incurred from time to time by the Working Capital Bank under
or by reason or in consequence of any Engagement entered into or issued at
the request of such Borrower and any of the indemnities contained in
Clause 6.3.5 from and including the date upon which such payment, loss,
cost or expense is made, suffered or incurred as aforesaid up to and
including the date upon which payment or reimbursement of such amount is
demanded from such Borrower. The amount of such interest shall be
calculated in accordance with the provisions of Clause 8.3. For the
avoidance of doubt, interest on sums demanded under the provisions of
Clause 6.3.5 shall also accrue in accordance with Clause 8.3.
7. AVAILABILITY OF ALTERNATIVE CURRENCIES
7.1 Non-Availability
If, before 10.00 a.m. (London time) on the second Business Day prior to
the Drawdown Date relative to an Advance which it is proposed be
denominated in an Alternative Currency, the Agent receives notice from a
Bank that:
(i) it is reasonably unable to obtain sufficient funds necessary to
find its Participation in such Advance in the ordinary course of
business in the London Inter-Bank Market; or
(ii) central bank or other governmental authorisation in the country of
the proposed Alternative Currency is required to permit its use by
such Bank for the making of such Advance and the authorisation has
not been obtained or is not in full force and effect; or
(iii) the use of the proposed Alternative Currency is restricted or
prohibited by any request, directive, regulation or guideline of any
governmental body, agency, department or regulatory or other
authority (whether or not having the force of law) in accordance
with which such Bank is accustomed to act;
the Agent shall give notice to the Company to that effect before 10.30
a.m.(London time) on the second Business Day prior to such Drawdown Date.
7.2 Effect of Notice
7.2.1 If the Agent delivers a notice under Clause 7.1, then the Company may
elect by notice served on the Agent by 10.30 a.m. (London time) on the
Business Day prior to such Drawdown Date that the relevant Advance shall
not be made in which event, such Advance will not be made.
7.2.2 If the Company does not elect as set out in Clause 7.2.1, the relevant
Advance shall be denominated in Sterling and, in respect of such Advance,
there shall be substituted in the definition of "LIBOR" contained in
Clause 1.1 for the time "11.00 a.m." the time "12.00 noon".
8. INTEREST
8.1 Amount
Interest shall accrue on each Term Advance in respect of the period from
and including the relative Drawdown Date to, but excluding the Final
Repayment Date and on each Revolving Advance in respect of the period from
and including the relative Drawdown Date to, but excluding, the relative
Interest Date at the rate, in each case, determined by the Agent to be the
aggregate of:
(i) the Margin from time to time;
(ii) LIBOR; and
(iii) in the case of Advances denominated in Sterling, the Mandatory
Liquid Asset Costs.
8.2 Interest Periods
8.2.1 Subject to Clause 5.6, Interest Periods in respect of Advances may be of
1, 2, 3 or 6 months' duration or such other period (not exceeding 12
months) as the Banks may agree with the Company.
8.2.2 The Company shall, subject to Clause 8.2.6, in each Drawdown Notice select
the Interest Period of the Advance to which such Drawdown Notice relates.
8.2.3 In respect of Term Advances, interest shall be calculated by reference to
successive Interest Periods. Each succeeding Interest Period relative to a
Term Advance shall commence on the last day of the preceding Interest
Period for such Advance. The Borrower shall at least three (3) Business
Days prior to the last day of the current Interest Period applicable to a
Term Advance notify the Agent in writing of the next Interest Period
applicable to such Advance.
8.2.4 The Company may by notice in writing to the Agent at least three (3)
Business Days prior to an Interest Date relating thereto, elect that a
Term Advance be split into two Term Advances of at least US$10,000,000
each. With effect from such Interest Date, such notice shall take effect
in accordance with its terms.
8.2.5 If the relanve Interest Periods for 2 Term Advances end on the same day,
subject to the other terms hereof; as from such day, such Term Advances
shall be deemed to be a single Term Advance.
8.2.6 No Interest Period for an Advance shall extend beyond the Final Repayment
Date and if an Interest Period selected purports so to do, it shall
nevertheless expire on the Final Repayment Date.
8.2.7 If the Company fails to select an Interest Period for an Advance, the
Company shall, subject to Clause 8.2.6, be deemed to have selected an
Interest Period of 3 months.
8.2.8 Any Interest Period which commences on the last Business Day in a month or
on a Business Day for which there is no numerically corresponding day in
the month in which that Interest Period is to end, shall (subject to
Clause 8.2.6) end on the last Business Day in that later month.
8.2.9 Any Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day or, if that day
falls in the following month, on the immediately preceding Business Day.
8.3 Default Interest
8.3.1 If a Borrower fails to pay any sum payable under any Financing Document on
its due date, a Borrower shall pay default interest on such sum (or, as
the case may be, the amount thereof for the time being due and unpaid) to
the Agent for the account of the Agent and the Banks or the Working
Capital Bank, as the case may be, from the due date to the date of actual
payment in full calculated by reference to successive Interest Periods
(each of such duration as the Agent may from time to time select
and the first beginning on the relative due date) at the rate per annum
being the aggregate of:
(i) 1 per cent. per annum;
(ii) the Margin from time to time;
(iii) LIBOR; and
(iv) in the case of sums denominated in Sterling, the Mandatory Liquid
Asset Costs.
8.3.2 So long as the default continues, such rate shall be recalculated in
accordance with the provisions of this Clause 8.3 on the last day of
each such Interest Period and unpaid interest then payable but
unpaid under this Clause shall be compounded at the end of each
Interest Period.
8.4 Interest under the Overdraft Facility
8.4.1 Interest on all amounts outstanding by way of overdraft under the
Overdraft Facility shall accrue at the rate per annum which is the
aggregate of:
(i) the Margin from time to time; and
(ii) the most recently published base rate of the Bank making
available the relevant overdraft.
8.4.2 Interest under Clause 8.4.1 on amounts outstanding by way of
overdraft shall be paid by the relevant Borrower to the Bank making
available the relevant overdraft on such Bank's usual quarterly
charging days and (if not such a quarterly charging day) the Final
Repayment Date.
8.4.3 Each Bank making available an overdraft under the Overdraft Facility
is hereby authorised by each Borrower to debit all interest payable
by such Borrower under this Clause 8.4 to the current account held
by such Borrower with such Bank and such Bank shall notify such
Borrower of the amount debited in accordance with the normal
practice of such Bank.
8.5 Engagements Commission
Commission in respect of each Engagement entered into or issued
under the Uncommitted Engagements Facility shall:
(i) accrue from day to day on the Engagement Amount of such
Engagement at a rate per annum equal to the higher of:
(a) the Margin from time to time; and
(b) the Working Capital Bank's standard charges for the
relevant Engagement;
(ii) be calculated on the basis of actual days elapsed and a 360
days' year in the case of an Engagement denominated in a
currency other than Sterling, but if such Engagement is
denominated in Sterling, a 365 days' year; and
(iii) be paid in Sterling on the Working Capital Bank's normal
charging days for the relevant Engagement.
8.6 Calculation and Payment of Interest
8.6.1 Promptly following the beginning of each Interest Period and, in the
circumstances of the Margin reducing, on the date on which such reduction
becomes effective, the Agent will notify the relevant Borrower of the rate
and amount of interest payable for such Interest Period (but in the case
of such interest calculated under Clause 8.3, any such notification need
not be made more frequently than weekly). Such notification shall set out
in reasonable detail the basis of computation of the amount of interest so
payable.
8.6.2 Interest due from a Borrower to any of the Agent, the Working Capital Bank
and the Banks under this Agreement shall:
(i) accrue from day to day at the appropriate rate calculated under this
Clause 8;
(ii) except as otherwise provided in this Agreement (and, in particular,
Clauses 8.4 and 8.6.3), be paid by the relevant Borrower to the
Agent for the account of the Banks or the Agent, as the case may be,
in arrear on each Interest Date, save that in the case of any
Interest Period which is for longer than 6 months, such Borrower
shall pay interest 6 monthly in arrear and on the relative Interest
Date;
(iii) be calculated on the basis of the actual number of days elapsed and,
in the case of Sterling, a 365 day year or, in the case of an
Alternative Currency, a 360 day year or, if different, such number
of days as is market practice for the relevant currency; and
(iv) be payable after as well as before judgment.
8.6.3 The Additional Margin, if any, shall be payable on 30th June 1996 to the
Banks, pro rata to their Commitments.
8.7 Market Disruption
If:
(i) no relevant rate appears on the Reuter Monitor Money Rates Service
for the purposes of paragraph (a) in the definition of LIBOR and the
Agent
determines that at or about 11.00 a.m.(London time), in the case of
Sterling, or, in the case of an Alternative Currency, 2 Business
Days before, the first day of an Interest Period none of the
Reference Banks is offering to leading banks in the London
Inter-Bank Market deposits in Sterling or an Alternative Currency,
as appropriate, for the required period; or
(ii) no relevant rate appears on the Reuter Monitor Money Rates Service
for the purposes of paragraph (a) in the definition of LIBOR and
before the close of business in London in the case of an Alternative
Currency, 2 Business Days before, or in the case of Sterling, on the
first day of an Interest Period the Agent has been notified by each
of a group of Banks the aggregate of whose Commitments, as the case
may be, is equal to at least 33 per cent. of the Term Loan
Commitments or the Revolving Loan Commitments, as the case may be,
that the rate at which such deposits are being so offered does not
accurately reflect the cost to it of obtaining such deposits; or
(iii) by reasons of circumstances generally affecting the London
Inter-Bank Market, reasonable and adequate means do not exist for
ascertaining LIBOR for any Advance for any relative Interest Period;
then:
(a) the Agent shall promptly give notice to the Company in writing of
such event (a "market disruption notice");
(b) the Agent and the Company shall discuss an alternative basis for
calculating the relative rate of interest for the relative Advance
(the "Affected Advance") on the basis that the net return to the
Banks shall be no less than it would have been had such event not
occurred ("alternative basis");
(c) the Company shall either:
(i) in the case of (i) or (iii) above, immediately withdraw the
Drawdown Notice relating to the Affected Advance or, in any
case, throughout any period in relation to which a market
disruption notice is in effect (subject always to Clause
8.7(d)) pay interest to the Agent for the account of each of
the Banks on each Bank's Participation in the Affected Advance
at the rate per annum determined by the Agent to be the
aggregate of:
(1) the Margin during such period;
(2) the rate notified by each Bank to the Agent to be the
rate which expresses as a percentage rate per annum the
cost to such Bank of funding from whatever
sources it may reasonably select its Participation in
the Affected Advance; and
(3) where the Affected Advance is denominated in Sterling,
Mandatory Liquid Asset Costs; or
(ii) if it has not promptly withdrawn the Drawdown Notice relating
to the Affected Advance, at any time that a market disruption
notice is in force and an alternative basis has not been
agreed upon giving the Agent 10 days' prior written notice,
prepay the Affected Advance, together with interest accrued
calculated in accordance with Clause 8.7(c)(i) thereon but
without prejudice to Clause 12.3; and
(d) if the Company and the Agent (with the consent of the Banks) shall
agree an alternative basis, then such agreement shall take effect in
accordance with its terms and shall be deemed to take effect under
this Agreement.
8.8 Agent's Determination
The determination by the Agent of any interest, conmission and fees
payable under this Clause 8 shall, save for manifest error, be conclusive
and binding on the Borrowers.
9. REPAYMENT
9.1 Repayment of the Term Loan
9.1.1 The Company shall repay the Term Loan in full on the Final Repayment Date.
9.1.2 No amount repaid or prepaid in relation to the Term Loan may be
reborrowed.
9.2 Repayment of Revolving Advances
9.2.1 Each Revolving Advance shall, subject to the other terms hereof; be repaid
in full on the Interest Date relating to such Revolving Advance.
9.2.2 For the avoidance of doubt, all Revolving Advances will be repaid on or
before the Final Repayment Date.
9.2.3 Subject to the other terms hereof; monies may be reborrowed under the
Revolving Loan Facility during the Revolving Commitment Period.
9.2.4 If all or part of an existing Revolving Advance is to be repaid from the
proceeds of all or part of a new Revolving Advance denominated in the same
currency as such existing Revolving Advance, then as between each Bank and
the Company, the amount to be repaid by the Company shall be set off
against the amount to be advanced by such Bank in relation to the new
Revolving Advance and the person to whom
the smaller amount is to be paid shall pay to the other party a sum equal
to the difference between the two amounts.
9.3 Repayment of the Overdraft Facility
Each Borrower shall, on the Final Repayment Date, repay all amounts
outstanding by way of overdraft under the Overdraft Facility to the
relevant Bank.
9.4 Reduction of Commitments
On any repayment or prepayment of the Term Loan, the Total Term Loan
Commitments will be reduced pro rata accordingly.
9.5 Mandatory Repayment from Disposal Proceeds and Equity Raisings
9.5.1 Subject to the othcr provisions of this Clause 9.5, any Disposal Proceeds
received by a member of the Group of a Disposal (not being an Excluded
Disposal) shall immediately upon receipt by the relevant member be applied
as follows:
(i) the first US$80,000,000 (on the basis of an exchange rate of
US$1.5916 to (pound)1) in aggregate of such Disposal Proceeds
received by members of the Group shall be paid in repayment to the
Banks and the US Loan Note Holders, in the Sharing Proportions for
application against amounts due under the Facilities and the US Loan
Notes;
(ii) after the application referred to in (i) above, the Company shall be
entitled to retain an aggregate amount of such Disposal Proceeds not
exceeding US$2,500,000 (on the basis of an exchange rate of
US$l.5916 to (pound)1); and
(iii) after the applications referred to in (i) and (ii) above, 80 per
cent. of all Disposal Proceeds shall be paid to the Banks and the US
Loan Note Holders in the Sharing Proportions for application against
amounts due under the Facilities and the US Loan Notes.
9.5.2 The proceeds of any new issue of share capital of the Company or its
Subsidiaries to any person not being a member of the Group (net of all
costs and expenses of issuing the same which expenses shall not include
the success fees payable pursuant to Clause 18.6 and clause 3 of the First
Amendment or any yield premium on the US Loan Notes) shall be applied
immediately upon receipt of the same as follows:
(i) first, in repayment of the AIB Facility; and
(ii) thereafter, such proceeds shall be paid to the Banks and the US Loan
Note Holders in the Sharing Proportions, for applications against
amounts due under the Facilities and the US Loan Notes.
9.5.3 The Disposal Proceeds arising from a Disposal of the issued share capital
of, or all the assets of, Modern Security Systems Limited (a company
incorporated in Ireland) shall promptly upon receipt be applied as
follows:
(i) first, in repayment of the AIB Facility;
(ii) second, an amount not exceeding IR(pound)l,720,000 less any amount
repaid under (i) above shall be paid to the Banks for application
first against amounts due under the Facilities; and
(iii) thereafter, such proceeds shall be paid to the Banks and the US Loan
Note Holders in the Sharing Proportions for application against
amounts due under the Facilities and the US Loan Notes.
9.5.4 For the purposes of this Clause 9 amounts due under the Facilities and the
US Loan Notes include, for the avoidance of doubt, all principal monies,
interest, the success fee referred to in Clause 18.6 and clause 3 of the
First Amendment and any yield premium on the US Loan Notes.
9.5.5 In respect of any Disposal Proceeds or proceeds of the issue of share
capital by a member of the Group, the US Loan Note Holders may elect that
the US Loan Notes or all the Banks may elect that the Facilities, as the
case may be, shall not be repaid out of all or part of such Disposal
Proceeds or proceeds of issue in which case in Clauses 9.5.1 to 9.5.3
inclusive, any reference to payment of an amount to the Banks and the US
Loan Note Holders in the Sharing Proportions shall in relation to such
part of such Disposal Proceeds be deemed to be a reference to a payment of
the whole amount to the Banks for application against amounts due under
the Facilities or to the US Loan Note Holders for application against
amounts due under the US Loan Notes, as the case may be.
9.5.6 Any amount received by the Banks pursuant to this Clause 9.5 for
application against amounts due under the Facilities shall be applied as
follows:
(i) first, against the amount of the success fee, if any, payable under
Clause 18.6 which is then due and payable;
(ii) second, against, on the one hand, the Term Loan, or at the
Company's option, the Revolving Loan, and on the other hand, amounts
outstanding under the Overdraft Facility in the Committed
Proportions; and
(iii) third, as the Banks may determine,
PROVIDED THAT if a date on which an amount is received by the Banks
pursuant to this Clause 9.5 for application against the Term Loan or the
Revolving Loan is not an Interest Date for that part of the Term Loan and
the Revolving Loan to be repaid such amount may at the Company's option be
placed to the credit of an interest bearing account (an "Application
Account") of the Company held with a Bank (which account the company shall
at the request of the Majority Banks charge in favour of the Banks on
terms reasonably satisfactory to the Banks) and released
from such account to make the relevant repayments on the immediately
succeeding relevant Interest Date or Dates.
9.5.7 On any sum being applied in accordance with Clause 9.5.6, the Term Loan
Commitments or, as the case may be, the Revolving Loan Commitments and the
Overdraft Commitments will be reduced by the amount of such sum in
accordance with the Committed Proportions.
9.6 Voluntary Repayment of the Term Loan
9.6.1 Without prejudice to the other provisions of this Agreement, the Company
may, without penalty but only if it permanently reduces the Overdraft
Facility pro rata to the Committed Proportions at the same time as making
such prepayment, prepay, on an Interest Date relating thereto, all or part
of a Term Advance, but, if in part, in minimum amounts of US$2,000,000
and multiples of US$1,000,000
9.6.2 The Company shall give written notice of any prepayment under this Clause
9.6 at least 30 days prior to the proposed date of prepayment. Any such
notice shall be irrevocable and shall specify the amount of the prepayment
and the date upon which it is to be made.
10. CANCELLATION
10.1 Voluntary Cancellation
On giving not less than 5 days' prior irrevocable written notice to the
Agent, the Company may cancel all or part of the Revolving Loan Facility
and Overdraft Facility for the time being undrawn (but if in part in
minimum amounts of (pound)1,000,000 and multiples of (pound)500,000 or the
unutilised part thereof) but only if the Revolving Credit Facility and the
Overdraft Facility are cancelled pro rata to the Committed Proportions.
Amounts so cancelled shall cease to be available for borrowing hereunder
and the Revolving Facility Limit and the Overdraft Facility Limit and the
Revolving Loan Commitments and the Overdraft Commitments will be reduced
accordingly.
10.2 Mandatory Cancellation
10.2.1 The Facilities will be permanently reduced pro rata by:
(a) (pound)1,200,000 on 31st March 1996; and
(b) (pound)2,250,000 on 30th June 1996;
and the Revolving Facility Limit, the Overdraft Facility Limit and the
Commitments will be reduced accordingly.
10.2.2 On any cancellation pursuant to Clause 10.2.1, the Borrowers shall,
subject to Clause 12.3, make such prepayments as are necessary to ensure
that there is full compliance with Clause 3.1.2.
11. CHANGES IN CIRCUMSTANCES
11.1 Illegality
11.1.1 If by reason of the introduction of, or any change in, any applicable law
or any regulation or regulatory requirement of the Bank of England or of
any other governmental, monetary or other authority (whether in the United
Kingdom or elsewhere) or any change in the interpretation or application
thereof it becomes unlawfull or it is prohibited for any of the Banks to
maintain its Commitment or its Participation, or otherwise give effect to
all or any of its obligations as contemplated by this Agreement, the
relative Bank shall promptly, upon becoming aware of the same, inform the
Agent and the Agent shall forthwith inform the Borrower to that effect,
whereupon such Bank's Commitment shall forthwith be reduced to zero and
its obligation to permit its Participation in the Advances to remain
outstanding shall forthwith terminate and the Borrower shall, within such
period (if any) as may be allowed by the relevant law, regulation or
regulatory requirement, prepay to the Agent for the account of such Bank
such Bank's Participation in Advances together with accrued interest
thereon (subject to the provisions of Clause 12.3 below if such prepayment
is made otherwise than on an Interest Date) and, if such Bank has an
Overdraft Commitment, repay all amounts outstanding to such Bank on any
overdraft under the Overdraft Facility. Without prejudice to the
foregoing, each Bank confirms that if it informs the Agent as aforesaid it
shall, as between itself and the Borrower, thereafter use reasonable
endeavours to avoid or mitigate the effects of such unlawfulness or
prohibition and such Bank and the Agent will enter into negotiations in
good faith with the Borrower with a view to finding a means of avoiding or
mitigating the effects of such unlawfulness or prohibition including the
transfer of the Lending Office to another jurisdiction or the transfer of
its rights and obligations to another financial institution PROVIDED THAT
neither such Bank nor the Agent shall be obliged to continue such
negotiations for a period exceeding 30 days.
11.1.2 If, by reason of any of the matters stated in Clause 11.1.1 it becomes
unlawful or it is prohibited for the Working Capital Bank to issue or
leave outstanding any Engagement issued or to be issued by the Working
Capital Bank, the Uncommitted Engagements Facility shall cease to be
available and the Company shall use its best endeavours to procure the
release of each Guarantee outstanding at such time.
11.2 Increased Costs
If; after the date hereof:
(a) the implementation, introduction, abolition, withdrawal or any
change in:
(i) any applicable law, regulation, practice or concession; or
(ii) any official directive, regulatory requirement, request or
guidance (whether or not having the force of law but if not
having the force of law, one which applies generally to a
class or category of financial institutions of which the
relevant Bank forms part and compliance with which is in
accordance with the general practice of banks to which it
applies of the Bank of England, the European Community or of
any other governmental, monetary or other authority (whether
in the United Kingdom or elsewhere) having jurisdiction over
the relative Bank; or
(b) any change in the interpretation or application thereof,
shall:
(i) subject any Bank to any Tax Liability in connection with its
Commitment or Participation in the Facilities or any part
thereof or in connection with any of the Financing Documents
other than Tax on the Overall Net Income of any Bank; or
(ii) change the basis or timing of Taxation of any Bank in respect
of payments of principal, interest or any other amount paid,
payable or to become payable in connection with its Commitment
or Participation in the Facilities or in connection with any
of the Financing Documents (or the treatment for Taxation
purposes of such payments); or
(iii) change the basis or timing of the treatment of any of the
Banks for Taxation purposes in respect of any principal,
interest or other amounts paid, payable or to become payable
by such Bank on, or otherwise in respect of, deposits or loans
from third parties used to effect or maintain its
Participation or any part thereof or in connection with any of
the Financing Documents; or
(iv) impose, modify or deem applicable any reserve, cash ratio,
special deposit, capital adequacy or liquidity requirement or
any other analogous requirement, or require the making of any
special deposits against or in respect of any assets or
liabilities of any Bank for which such Bank is not entitled to
be fully compensated under Clause 8.1(c); or
(v) change the manner in which any of the Banks allocates capital
resources to its obligations under or in relation to the
Facilities so that it is unable to obtain the rate of return
on its overall capital which it would have been able to obtain
but for any of its entering into, performing its obligations
and assuming or maintaining its Commitment or its
Participation in the Facilities;
and the result of any of the foregoing is either to increase
the cost to any of the Banks of making available its
Commitment or its Participation in the Facilities or any part
thereof or of carrying out any of the transactions provided
for or contemplated by any of the Financing Documents or to
reduce the amount of any payment received or receivable by
such Bank or to reduce its return from the Facilities, then
and in any such case:
(aa) such Bank shall notify the Company and the Agent;
(bb) the Company shall pay (as additional interest) from time
to time to such Bank for the account of such Bank within
5 Business Days of demand all amounts which such Bank
certifies (in a certificate which shall set out in
reasonable detail so far as is practicable the basis of
the computation of such amounts) to be necessary to
compensate such Bank for the additional cost or
reduction;
(cc) without prejudice to the foregoing, each Bank confirms
that if it notifies the Company and the relative
Borrower as aforesaid such Bank shall take such steps as
such Bank considers reasonable to reduce or avoid the
additional cost or reduction including the transfer of
its Lending Office to another jurisdiction or the
transfer of its rights and obligations to another
financial institution and, if the Company so requests,
such Bank shall consult with the Company and the Agent
with a view to finding a means of reducing or avoiding
the additional cost or reduction PROVIDED THAT neither
such Bank nor the Agent shall be obliged to continue
such negotiations for a period of longer than 30 days;
and
(dd) without prejudice to the Company's obligation to pay to
the relative Bank the due amount under this Clause 11.2,
the relative Borrower, may, at any time alter receipt of
such notification, so long as the circumstances giving
rise to such additional cost or, as the case may be,
reduction are continuing, on giving not less than 10
Business Days' notice to the Agent (which shall be
irrevocable) prepay to the Agent for the account of the
relative Bank all (but not part only) of such Bank's
Participation in all Advances together with accrued
interest thereon (subject always to the provisions of
Clause 12.3). In such event, such Bank's Commitment
shall be reduced to zero.
Any of such notification and certification referred to in any
of paragraphs (aa) and (bb) of this Clause 11.2 may be made at
any time after the date on which the dvent occurs which gives
rise to such additional cost or reduction as aforesaid.
11.3 Certificates
The certificate or notification of the Agent or, as the case may be, the
relevant Bank as to any of the matters referred to in Clauses 11.1 and
11.2 above shall, save for any manifest error, be conclusive and binding
on the Borrowers.
12. PAYMENTS
12.1 Time and Place
12.1.1 All payments to be made by a Borrower for the account of the Agent or the
Banks, as the case may be, in relation to this Agreement or the Fees
Letter shall be made on the due date in immediately available funds:
(i) if in Sterling, by not later than 2.00 p.m. (London time) to the
appropriate account in London of the Agent; and
(ii) if in an Alternative Currency, by such time as the Agent shall
stipulate to the appropriate account of the Agent in the principal
financial centre of the country of such Alternative Currency;
which account, in either case, shall have been previously specified by the
Agent.
12.1.2 All payments to be made by a Borrower to a Bank in relation to the
Overdraft Facility shall be made in accordance with usual procedures for
operation of overdraft facilities.
12.1.3 All payments to be made by a Borrower to the Working Capital Bank shall
be paid as the Working Capital Bank shall direct.
12.2 Business Days
If, but for this Clause 12.2, any sum would become due for payment under
this Agreement on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day PROVIDED THAT if the next
succeeding Business Day falls in the next calendar month, then such
payment shall be made on the immediately preceding Business Day.
12.3 Indemnity aud Breakage Costs
12.3.1 Each Borrower agrees to indemnify each Bank and the Working Capital Bank
on demand against any loss or expense (including any loss or expense
sustained or incurred or to be sustained or incurred by any Bank in
liquidating or employing
deposits acquired or contracted for to effect or maintain its
Participation in the Advances or the Overdraft Outstandings or any part
thereof) which such Bank or the Working Capital Bank has sustained or
incurred as a consequence of any of:
(i) an Advance not being made, following the service of a Drawdown
Notice by reason of the non-fulfilment of any of the Conditions
Precedent or otherwise (save as may arise as a result of the failure
of such Bank to comply with its obligations hereunder);
(ii) a default by a Borrower on the payment on the due date of any sum
due under this Agreement; and
(iii) the repayment of the Term Loan or any Revolving Advance and/or the
Overdraft Outstandings or the termination of the Facilities, in each
case, pursuant to Clause 15.
12.3.2 If any prepayment or repayment of an Advance is made otherwise than on an
Interest Date, the Company shall on demand pay to the Agent, for the
account of the Banks, such additional amount as the Agent may certify is
necessary to compensate the Banks or any of them for any loss or expense
on account of funds borrowed, contracted for or utilised to fund the
amounts so repaid or prepaid. Any certifications issued by the Agent
pursuant to this Clause 12.3 shall be conclusive and binding on the
Company save in the case of manifest error.
12.4 Grossing-Up
12.4.1 Subject to Clause 12.4.2, all sums payable by a Borrower to any of the
Agents, the Working Capital Bank and the Banks pursuant to or in
connection with any of the Financing Documents shall be paid in full
without any set-off or counterclaim whatsoever and free and clear of all
deductions or withholdings whatsoever save only as may be required by law.
12.4.2 If any deduction or withholding is required by law in respect of any
payment due from a Borrower to any of the Agent, the Banks or the Working
Capital Bank pursuant to or in connection with any of the Financing
Documents, such Borrower shall:
(a) ensure or procure that the deduction or withholding is made and that
it does not exceed the minimum legal requirement therefor;
(b) pay, or procure the payment of, the full amount deducted or
withheld to the relevant Taxation or other authority in accordance
with the applicable law;
(c) increase the payment in respect of which the deduction or
withholding is required so that the net amount received by the
relative payee after the deduction or withholding (and after taking
account of any further deduction or withholding which is required
to be made as a consequence of the increase) shall be equal to the
amount which the relative payee
would have been entitled to receive in the absence of any
requirement to make any deductions or withholdings; and
(d) promptly deliver or procure the delivery to the relative payee of
receipts evidencing each of the deductions or withholdings which has
been made.
12.4.3 If the Agent is obliged to make any deduction or withholding from any
payment to any of the Banks (an "agency payment") which represents an
amount or amounts received by the Agent from any Borrower under any of the
Financing Documents, the Company shall pay directly to the relative Bank
such sum (an "agency compensating sum") as will, after taking into account
any deduction or withholding which the Company is obliged to make from the
agency compensating sum, enable such Bank to receive, on the due date for
payment of the agency payment, an amount equal to the agency payment which
such Bank would have received in the absence of any obligation to make any
deductions or withholdings.
12.4.4 A Borrower shall not be required to pay an additional amount under this
Clause 12.4 if the relevant Bank either:
(a) is not at the date hereof a Qualifying Bank; or
(b) ceases after the date hereof to be a Qualifyng Bank otherwise than
as a consequence of a change in any applicable law, regulation,
practice, concession, regulatory requirement or request (whether or
not having the force of law) of the Bank of England, the European
Community or of any other governmental, monetary or other authority;
and, in either case, the obligation to deduct or withhold would not have
arisen if the relevant Bank had been a Qualifying Bank.
12.4.5(a) If any of the Banks determines, in its absolute discretion, that it
has received, realised, utilised and retained a Tax benefit by
reason of any deduction or withholding in respect of which a
Borrower has made an increased payment or paid an agency
compensating sum under this Clause 12.4, such Bank shall, provided
that the Agent and each Bank has received all amounts which are then
due and payable by the obligors under any of the Financing
Documents, pay to such Borrower (to the extent that such Bank can do
so without prejudicing the amount of such benefit or repayment and
the right of such Bank, to obtain any other benefit, relief or
allowance which may be available to it) such amount, if any, as such
Bank, in its absolute discretion shall determine, will leave such
Bank in no worse position than it would have been in if the
deduction or withholding had not been required PROVIDED THAT:
(i) each Bank shall have an absolute discretion as to the time at
which and the order and manner in which it realises or
utilises any Tax benefit and shall not be obliged to arrange
its business or its Tax affairs in any particular way in order
to be eligible for any credit or refund or similar benefit;
(ii) no Bank shall be obliged to disclose any information regarding
its business, Tax affairs or Tax computations; and
(iii) if a Bank has made a payment to a Borrower pursuant to this
Clause 12.4.5 on account of any Tax benefit and it
subsequently transpires that such Bank did not receive that
Tax benefit, or received a lesser Tax benefit, such Borrower
shall, on demand, pay to such Bank such sum as the relative
Bank may determine as being necessary to restore its after-Tax
position to that which it would have been had no adjustment
under this Clause (iii) been necessary. Any sums payable by a
Borrower to a Bank under this Clause (iii) shall be subject to
the provisions of Clause 18.8.
(b) No Bank shall be obliged to make any payment under this Clause
12.4.5 if, by doing so, it would contravene the terms of any
applicable law or any notice, direction or requirement of any
governmental or regulatory authority (whether or not having the
force of law).
12.5 Mitigation
If, in respect of any Bank or the Working Capital Bank, circumstances
arise which would, or would upon the giving of notice, result in an
increase in the amount of any payment to be made to it or for its account
pursuant to Clause 12.4 (Grossing up), then, without in any way limiting,
reducing or otherwise qualifying the rights of such Bank or the Working
Capital Bank, as the case may be, or the obligations of each Borrower
under Clause 12.4 such Bank or the Working Capital Bank, as the case may
be, shall promptly upon becoming aware of the same notify the Agent
thereof and, in consultation with the Agent and the Company and to the
extent that it can do so without prejudice to its own position, take
reasonable steps to mitigate the effects of such circumstances including
the transfer of its Lending Office.
12.6 Prepayment Right
If the Company is required to make an increased payment for the account of
a Bank under Clause 12.4.2 or 12.4.3 (but only so long as such requirement
exists), subject to giving the Agent and such Bank not less than 10 days'
prior written notice (which shall be irrevocable), the Company may prepay
such Bank's Participation in the Advances together with accrued interest
thereon PROVIDED THAT any such prepayment shall be subject to the
provisions of Clause 12.3. In such circumstances, the Commitment of the
relevant Bank will be reduced to zero.
12.7 Accounts
Each Bank shall maintain in accordance with its usual practice an account
or accounts, which account or accounts shall, in the absence of manifest
error, as between the Borrowers and such Bank be conclusive evidence of
the amounts from
time to time advanced by, owing to, paid and repaid to such Bank under
this Agreement.
12.8 Borrower's Payments
12.8.1 The Agent may assume that a Borrower will make all payments due under
this Agreement on the due date and the Agent may, in reliance
upon such assumption, make available to each Bank on any payment
date an amount equal to such Bank's pro-rata share of such assumed
payment.
12.8.2 If a Borrower does not in fact make such payment to the Agent, each Bank
shall forthwith on demand by the Agent repay to the Agent the amount made
available to such Bank (together with interest thereon at the rate
determined by the Agent as being its cost of funding such payment).
12.9 Banks' Payments
12.9.1 The Agent may assume that each Bank has made its Participation in an
Advance available to the Agent on the relative Drawdown Date and the Agent
may in reliance upon such assumption, make available to the Company a
corresponding amount.
12.9.2 If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such corresponding
amount (together with interest thereon at the rate determined by the Agent
as being its cost of funds in the circumstances) on demand from the
Company.
12.9.3 Where the Agent has made available an amount to the Company in reliance
upon the assumption contained in Clause 12.9.1 but a Bank has not made its
Participation in the relevant Advance available to the Agent then, unless
that Bank notified the Agent in writing prior to the relevant Drawdown
Date that it would not be making its Participation in such Advance
available, that Bank shall:
(a) if the Company does not refund the corresponding amount to the Agent
within 3 Business Days, reimburse the Agent for such amount
(together with interest thereon at the rate determined by the Agent
as being its cost of funds in the circumstances) on demand; and
(b) indemnify the Agent from and against all losses, costs, charges and
expenses which the Agent may incur or sustain by reason of that Bank
not having made its Participation in the relevant Advance available.
12.10 Appropriation
If a Borrower shall pay a sum in relation to the Facilities which is less
than the total amount due and payable by it under this Agreement on the
day on which such sum is paid such Borrower hereby waives any rights it
may have to make any appropriation thereof as between any amounts so due
and payable and the sum so paid shall be applied in or towards
satisfaction of principal, interest, fees and other sums which are due or
overdue for payment on that day in such order as the Majority Banks may
determine PROVIDED THAT each Bank shail receive its pro rata share of any
such sum.
12.11 Currency of Account
All payments to be made by the Company in respect of an Advance, whether
of interest or principal, shall be made in the currency in which such
Advance is denominated. All payments to be made under any indemnity or
reimbursement provision of this Agreement relating to costs, losses and
expenses shall be paid in the currency in which the relative costs, losses
or expenses were incurred.
13. REPRESENTATIONS AND WARRANTIES
13.1 Acknowledgement of Reliance
Each of the Borrowers hereby acknowledges that each of the Agent, the
Banks and the Working Capital Bank have entered into this Agreement and
accepted the security granted under the Security Documents in full
reliance on the representations and warranties made or deemed to be made
and repeated under this Clause 13.
13.2 Representations and Warranties
The Company hereby represents and warrants to each of the Banks, the
Working Capital Bank and the Agent that:
(a) each member of the Group is a limited company incorporated under the
laws of its jurisdiction of incorporation and it possesses the
capacity to sue and be sued in its own name and has the power to
carry on its business and to own its property and other assets;
(b) each member of the Group has power to execute, deliver and perform
its obligations under the Financing Documents to which it is a party
and to carry out the transactions contemplated by such Financing
Documents and all necessary corporate, shareholder and other action
has been or will be taken to authorise the execution, delivery and
performance of the same;
(c) the obligations of each member of the Group under the Financing
Documents to which it is a party, constitute its legal, valid and
binding obligations and are in full force and effect;
(d) the execution, delivery and performance by each member of the Group
of the Financing Documents to which it is a party does not:
(i) contravene any applicable law or regulation or any order of
any governmental or other official authority, body or agency
or any judgment, order or decree of any court having
jurisdiction over it; or
(ii) conflict with, or result in any breach of any of the terms of;
or constitute a default under, any agreement or other
instrument to which it is a party or any licence or other
authorisation to which it is subject or by which it or any of
its property is bound; or
(iii) contravene or conflict with the provisions of its Memorandum
and Articles of Association or equivalent constitutional
documents;
(e) save as disclosed to the Agent prior to the date hereof; each member of
the Group has not taken any action nor have any steps been taken or legal
proceedings started or, to the best of the Company's knowledge,
information and belief; threatened against a member of the Group for
winding-up, dissolution or re-organisation, the enforcement of any
Encumbrance over its assets or for the appointment of a receiver,
administrative receiver, or administrator, trustee or similar officer of
it or of any or all of its assets or revenues;
(f) save as disclosed to the Agent prior to the date hereof; each member of
the Group is not (nor would be with any of the giving of notice, lapse of
time, determination of materiality and other condition) in breach of or in
default under any deed, instrument or any agreement to which it is a party
or which is binding on it or any of its assets to an extent or in a manner
which has, or could reasonably be expected to have, a Material Adverse
Effect;
(g) no action, litigation, arbitration or administrative proceeding has been
commenced, or is pending or, to the best of the Company's knowledge,
information and belief; threatened, against any member of the Group and
nor is there subsisting any unsatisfied judgment or award given against
any of them by any court, board of arbitration or other body which, in
each case, has or could reasonably be expected to have, a Material Adverse
Effect;
(h) (i) each of the latest Accounts required to be delivered pursuant to
Clause 14.1(a) is prepared in accordance with Generally Accepted
Accounting Principles and gives a true and fair view of the
financial position of the relative company as at the date to which
the same were prepared and for the period then ended; and
(ii) each set of interim accounts and management accounts required to be
delivered under Clauses 14.1(b), (c) and (d) shows with reasonable
accuracy the financial condition of the member of the Group in
respect of which they were prepared during the period to which they
relate;
(i) no Encumbrance (other than Permitted Encumbrances) exists over all or any
part of the present or future revenues or assets of any member of the
Group;
(j) all licences, consents, exemptions, clearances, filings, registrations and
authorisations which are or may be necessary to enable each member of the
Group:
(i) to carry on its business are in full force and effect to the extent
that failure to obtain or make the same would have a Material
Adverse Effect; and
(ii) to perform its obligations under the Financing Documents to which it
is a party and the flilfilment of the transactions contemplated by
such documents or which are required in connection with the
execution, delivery, validity, enforceability or admissibility in
evidence of the Financing Documents are in full force and effect;
(k) the accounting reference date of each member of the Group is 30th November
other than TVX Inc which has an accounting reference date of 30th
September;
(l) each of the members of the Group has complied in all material respects
with all Taxation laws in all jurisdictions in which it is subject to
Taxation and has complied in all material respects with its obligations to
pay Taxes due and payable by it and no material clalms are being asserted
against it in respect of Taxes save for assessments in relation to the
ordinary course of its business or claims contested in good faith and in
respect of which adequate provision has been made and disclosed in the
latest Accounts or information delivered to the Agent hereunder;
(m) the Company has no Subsidiaries other than those listed in Schedule 5;
(n) each of the members of the Group has complied in all material respects
with all existing Environmental Laws and there are and have been in
relation to such companies no actual or, to the best of the Company's
information, knowledge and belief; pending or threatened, prosecutions,
suits, claims, proceedings, arbitrations or legal actions of any kind
under, or which allege a violation of, any existing Environmental Laws or
which allege environmental damage (whether caused by disposal, discharge,
ownership, operation, transportation, storage or any other action or
omission) which could result in a member of the Group incurring a
liability in excess of (pound)100,000;
(o) the execution of the Financing Documents by the relevant members of the
Group and the exercise of each of their respective rights and performance
of each of their respective obligations hereunder and thereunder will not
result in the creation of any Encumbrance over or in respect of any of
their present or future revenues, assets or undertakings; and
(p) since 30th November 1994, there has been no change in the business or
financial condition of any member of the Group which has had, or could
reasonable be expected to have, a Material Adverse Effect.
13.3 Repetition
The representations and warranties set out in Clause 13.2 shall survive
the execution of this Agreement and (save for the representations and
warranties made under Clauses 13.2(e),(f), (g), (i), (j), (l), (m), (n),
(o) and (p)) shall be deemed to be repeated by the Company on each
Drawdown Date, each Issue Date and each Interest Date as if made with
reference to the facts and circumstances existing at that time.
14. UNDERTAKINGS
14.1 Information Undertakings
The Company hereby undertakes and agrees with the Agent, the Banks and the
Working Capital Bank that throughout the Security Period it shall unless
the Majority Creditors shall otherwise agree:
(a) as soon as the same become available, but in any event within 150
days (in the case of the Accounts of the Company) or 210 days (in
the case of the Accounts of each Material Subsidiary) after the end
of each of its Financial Years, as the case may be, deliver to the
Agent for distribution to the Banks, copies in sufficient numbers
for all of them, of the Accounts of itself and each Material
Subsidiary for the relevant Financial Year together with a copy of
the management letter (if any) addressed by the Auditors to the
directors of the Company;
(b) as soon as the same becomes available, but in any event within 90
days after the end of the first half of each of its Financial Years,
deliver to the Agent for distribution to the Banks, copies, in
sufficient numbers for all of them, of its unaudited interim
accounts for such half year;
(c) as soon as the same become available, but in any event within 50
days (or, in respect of the last 3 months in a Financial Year of the
Company, 90 days,) after the end of each period of 3 months ending
on a Quarter Day, deliver to the Agent for distribution to the
Banks, copies in sufficient numbers for all of them of quarterly
management accounts of the Group in a format satisfactory to the
Agent (including a profit and loss account and cashflow forecast)
and attaching an information schedule (in the agreed form) setting
out EBITDA, Total Debt Costs and Recurring UK Rental Income for such
three-month period together with details of
progress on any proposed asset disposals and contracts taken on or
terminated durins such period;
(d) as soon as the same become available, but in any event within 45
days after the last day of each month, monthly management accounts
(other than for the month of December) of the Group for such month
including a statement of profit and loss, a cashflow statement, a
cashflow forecast for the balance of the then current Financial
Year of the Company and an update on the matters referred to in the
Side Letter;
(e) deliver to the Agent within 50 days of each Quarter Day (or 90 days
in respect of any Quarter Day which is the last Quarter Day in a
Financial Year of the Company), a certificate executed by two
directors of the Company certifying that as at such Quarter Day, the
Company is in compliance with the financial undertakings set out in
Clause 14.4.1 or, as the case may be, is not in compliance with any
of the same and, in any event, including a calculation relating to
such financial undertakings;
(f) procure that in relation to each set of the Company's Accounts
delivered to the Agent pursuant to Clause 14.1(a) above, there is
delivered at the same time a cenificate of the Auditors addressed to
the Agent and the Banks stating, in their opinion, whether or not
the Company is, on the basis of such Accounts, in compliance with
the financial undertakings set out in Clause 14.4.1 as at the last
day of the Financial Year of the Company to which such Accounts
relate;
(g) within a reasonable time following transmission thereof, deliver to
the Agent (a) copies of all such financial statements, proxy
material, notices and reports as it shall send to its public
shareholders or its creditors generally (or any class thereof) and
(b) copies of all registration statements (without exhibits),
prospectuses and all reports which it files with the Securities and
Exchange Commission (or any governmental body or agency succeeding
to the functions of the Securities and Exchange Commission), The
International Stock Exchange of the United Kingdom and the Republic
of Ireland Limited or any stock exchange except where the Company
shall, at the expense of the Company, provide the Agent with an
opinion of counsel that doing so would cause the Company to subject
itself to requirements of US Federal or state securities laws or UK
securities laws to which it would not otherwise be subject;
(h) furnish to the Agent such information, documents and records about
the business, financial condition, operations and prospects of any
member of the Group as the Agent may from time to time reasonably
require;
(i) ensure that all Accounts and other financial information submitted
to the Agent have been prepared in accordance with Generally
Accepted Accounting Principles;
(j) promptly notify the Agent of;
(i) any Default and any Default Occurrence;
(ii) any litigation, arbitration or administrative proceeding commenced
against any member of the Group involving a potential claim
of (pound)100,000 or greater;
(iii) any Encumbrance (other than a Permitted Encumbrance) of which the
Company becomes aware attaching to the assets or revenues of any
member of the Group; and
(iv) any occurrence (including without limitation any third party claim
or liability) of which the Company becomes aware which may have a
mat erial adverse effect on the ability of any of the members of the
Group to perform its obligations under any of the Financing
Documents.
14.2 Positive Covenants
The Company hereby undertakes and agrees with the Agent, each Bank and the
Working Capital Bank that, throughout the Security Period, it shall and it
shall procure that each of the companies in the Group shall unless the
Majority Creditors shall otherwise agree:
(a) to the extent legally possible, procure that any company which,
after the date hereof becomes a Material Subsidiary (other than a
company incorporated in a State of the United States of America)
executes and delivers to the Agent, a Guarantee and Debenture (or
its equivalent under the laws of a foreign jurisdiction) immediately
on becoming such a Material Subsidiary;
(b) at all times:
(i) comply with all laws and regulations applicable to it and
which are necessary in relation to the conduct of its business
generally and to obtain, effect and maintain in ful1 force and
effect all governmental and other regulatory consents,
licences, exemptions, clearances, filings, registrations and
authorisations required by law for the conduct of its business
generally save where, in each case, failure to comply, obtain,
effect or maintain would not have a Material Adverse Effect;
and
(ii) obtain, effect and maintain in full force and effect all
governmental and other regulatory consents, licences,
exemptions, clearances, filings, registrations and
authorisations required in connection with the validity,
enforceability or, as the case may be, admissibility in
evidence of the Financing Documents;
(c) pay and discharge all Taxes and governmental charges prior to the
date on which the same become overdue unless, and only to the extent
that, such Taxes and charges shall be contested in good faith by
appropriate proceedings, pending determination of which payment may
lawfully be withheld, and there shall be set aside adequate reserves
with respect to any such Taxes or charges so contested in accordance
with Generally Accepted Accounting Principles;
(d) effect and maintain with financially reputable insurers (including
self-insurance) such insurance over and in respect of its assets and
business and in such manner and to such extent as is reasonable and
customary for a business enterprise engaged in the same or a similar
business and in the same or a similar location;
(e) conduct its business in compliance with all Environmental Laws
applicable to it, including without limitation, those relating to
the generation, handling, use, treatment, storage and disposal of
Hazardous Materials except where the failure so to conduct would
not individually or in the aggregate, have a Material Adverse
Effect;
(f) remain as sole issuer and obligor of the US Loan Notes; and
(g) procure that, upon the discharge and cancellation of the Sanwa
Facility, ASHI shall forthwith execute a Share Pledge pledging to
the Security Trustee the remaining 90% of the shares of API which
are not subject to a Share Pledge and provide to the Security
Trustee, in form and substance satisfactory to it, a legal opinion
from US Counsel in respect thereof unless, in any case, the Sanwa
Facility is replaced by a banking facility substantially on the same
terms and conditions as the Sanwa Facility and which includes a
prohibition on the execution of such a Share Pledge or provides that
such execution would be an event of default (howsoever described).
14.3 Negative Covenants
The Company hereby undertakes with the Agent, each Bank and the Working
Capital Bank that during the Security Period it shall not and the Company
shall procure that none of the companies in the Group shall unless the
Majority Creditors otherwise agree:
(a) other than Permitted Encumbrances, create or permit to subsist any
Encumbrance over any of its undertaking and assets from time to
time;
(b) make a Disposal of all or any of its undertakings and assets, other
than:
(i) a Disposal in the ordinary course of trade of the relative
member of the Group on arm's length terms;
(ii) a Disposal to a member of the Group which has granted a
Debenture and Guarantee;
(iii) a Disposal of an asset where the proceeds of such Disposal are
used to purchase an asset in direct replacement of such
first-mentioned asset;
(iv) a Disposal of damaged, obsolete or redundant assets in the
ordinary course of business;
(v) a Disposal of a lease under sale and repurchase arrangements
entered into in the ordinary course of trade of the Group in
respect of leases, or upgrades of leases, in each case,
entered into after the date hereof,
(vi) a Disposal permitted in the Side Letter; and
(vii) a Disposal on arm's length terms of an asset at or above its
value stated in the relevant company's most recent Accounts
for a consideration not exceeding (pound)50,000 where such
Disposal would not result in the aggregate consideration
received for all Disposals of assets not included in (i)-(vi)
above exceeding (pound)250,000 in any Financial Year of the
Company;
(c) make or threaten to make any change in its business as at present
conducted, which would result in a substantial change in the nature
of the business carried on by the Group as a whole or carry on any
other business which is substantial in relation to the business of
the Group as at present conducted;
(d) merge or consolidate with any other person other than a member of
the Group that has granted a Guarantee and Debenture;
(e) make, or permit to remain outstanding, any loans or grant any credit
(but excluding:
(i) amounts of credit allowed by the relative company in the
ordinary course of its trading activities;
(ii) loans made by one member of the Group that has granted a
Guarantee and Debenture to another such member;
(iii) loans made by one member of the Group that has not granted a
Guarantee and Debenture to another such member;
(iv) loans made by one member of the Group that has not granted a
Guarantee and Debenture to another member of the Group that
has granted a Guarantee and Debenture;
(v) loans made by one member of the Group to other members of the
Group (not falling within paragraphs (ii), (iii) and (iv)
above) which either (a) are in existence at the date hereof,
or (b) are made after the date hereof where the aggregate net
amount of such loans does not exceed (pounds)1,000,000;
(vi) a loan of up to (pound)751,000 in aggregate made by the
Company to ASH Jersey;
(vii) loans or credit of up to $2,000,000 in aggregate made
available to TVX Inc; and
(viii)loans made by members of the Group to their employees not
exceeding in aggegate (pounds)500,000);
(f) other than Permitted Indebtedness, incur or permit to subsist any
Indebtedness;
(g) in respect of the Company only, without the prior consent of the
majority Creditors, make or pay any dividend or other distribution
in relation to any shares forming part of its issued share capital
unless;
(i) no Default or Default Occurrence is then continuing; and
(ii) the ratio of Total Gross Debt to EBITDA for the period of 12
months ending on the most recent Quarter Date prior to the
making or paying of the relevant dividend or distribution is
to be made is not greater than 1.5:1 as certified to the Agent
and the Banks by the Auditors;
(h) after the date of this Agreement, give any indemnity to potential
purchasers in relation to the costs of their due diligences
exercises exceeding, in aggregate, (pound)200,000;
(i) make or agree to make any payment or repayment or otherwise
discharge any of the obligations or liabilities of the Company under
the Jersey Debenture or otherwise in respect of the Loan (as defined
in the Jersey Debenture) except in respect of the payment of
interest;
(j) make any variation, amendment, modification or supplement in respect
of:
(i) the Jersey Debenture which relates to Clause 3 (Repayment),
Clause 4 (Prepayment) or Clause 8 (Subordination); or
(ii) the subordination provisions of the guarantee issued by the
Company in favour of the holders of the Convertible Capital
Bonds; nor
(k) save as otherwise permitted or required by this Agreement,
voluntarily prepay, repay, redeem or purchase all or any of the US
Loan Notes.
14.4 Financial Undertakings
14.4.1 The Company hereby undertakes with each of the Agent, the Banks and the
Working Capital Bank to ensure that unless the Majority Creditors agree
otherwise.
(a) EBITDA minus Capital Expenditure to Total Debt Costs
the ratio of EBITDA minus Capital Expenditure to Total Debt Costs
for each period of 12 months ending on a date specified in Column A
below shall not be less than the ratio set out in Column B below
opposite such date:
Column A Column B
-------- --------
30 November 1995 0.67:1
29 February 1996 0.54:1
31 May 1996 0.64:1
31 August 1996 0.61:1
30 November 1996 0.71:1
28 February 1997 0.70:1
31 May 1997 0.73:1
31 August 1997 0.77:1
30 November 1997 0.83:1
(b) Total Gross Debt to EBITDA
the ratio of Total Gross Debt to EBITDA for each period of 12 months
ending on a date specified in Column A below shall not be greater
than the ratio set out in Column B opposite such date:
Column A Column B
-------- --------
30 November 1995 3.35:1
29 February 1996 3.63:1
31 May 1996 3.37:1
31 August 1996 3.40:1
30 November 1996 3.27:1
28 February 1997 3.38:1
31 May 1997 3.24:1
31 August 1997 3.21:1
30 November 1997 3.03:1
(c) Recurring US Annual Rental Income
the Recurring US Annual Rental Income for each period of 12 months
ending on each Quarter Day shall not be less than (pound)50,000,000;
and
(d) Minimum Tangible Net Worth
Tangible Net Worth shall at all times be at least equal to
(pound)25,000,000.
14.4.2 If the directors of any of the companies in the Group determine at any
time during the Security Period to change the accounting reference date of
any member of the Group or if any of the accounting principles applies in
the preparation of any Accounts shall be different from the accounting
principles applies in respect of the same as at the date of this Agreement
or if as a result of the introduction or implementation of any SSAP, FRS,
FASB or UITF or any change in any of them or in the applicable law such
accounting principles are required to be changed or, adjustments are
required because of a change in the accounting treatment of the
capitalisation of equipment on contract hire, the Company or the Agent, as
the case may be, shall promptly give written notice to the Agent or the
Company, as the case may be, of such change, determination or
requirements, as the case may be. Thereafter, if the Agent believes that
the financial covenants set out in this Clause 14.4 need to be amended,
the Company and the Agent, acting on the instructions of the majority
Banks will negotiate in good faith to replace the existing financial
covenants with financial covenants which provide the Banks and the US Loan
Note Holders with substantially the same protections as the financial
covenants set out in this Clause 14.4 (but which are not materially more
onerous). If the Company and the Agent cannot agree such amended financial
covenants, or in default of such nomination the Agent shall request the
President for the time being of the Institute of Chartered Accountants in
England and Wales to nominate a firm of chartered accountants. Such
accountants in England and Wales to nominate a firm of chartered
accountants. Such accountants shall act as experts and not arbitrators and
their decision shall be final and binding on the parties hereto. The costs
of such experts shall be paid by the Company. Any such amendment financial
covenants shall apply in respect of this Agreement and the US Loan Notes.
14.4.3 The calculation of ratios and other amounts under this Clause 14.4 shall
be made by reference to the latest Accounts, interim accounts, management
accounts and other financial information of the members of the Group but
adjusted to reflect any movement from the assumed interest rates and
exchange rates set out in Clause 14.4.4.
14.4.4 For the purpose of Clause 14.4.3
(a) the assumed interest rates for each of the Financial Years of the
Company ending 30th November 1996 and 30th November 1997 are as
follows:
(i) in respect of Sterling Indebtedness, 6.75% plus a margin of
1.5% per annum;
(ii) in respect of US Dollars Indebtedness, 6% plus a margin of
1.5% per annum; and
(iii) in respect of US Dollars deposits, 5% per annum.
(b) the assumed US$:(pound) exchange rate for the Financial Year of the
Company ending 30th November 1996 is US$1.60 to (pound)1.
(c) the assumed US$:(pound) exchange rate for the Financial Year ending
30th November 1997 is US$1.55 to (pound)1.
14.4.5 On the occurrence of a New Equity Raising or a Major Disposal the Company
agrees that the financial undertakings set out in this Clause 14.4 shall
be recalculated as a result of such occurrence after consultation between
the Company, the Banks, the Working Capital Bank and the US Loan Note
Holders and be reset to reflect the change in the Company's financial
position as a result thereof on the basis that while reflecting such
change, the reset financial covenants will provide the Banks and the US
Loan Note Holders with substantially the same protections as the financial
covenants set out in this Clause 14.4.
15. DEFAULT
15.1 Defaults
There shall be a Default if:
(a) any amount payable under this Agreement is not paid by a Borrower on
the date, at the place and in the currency at which it is expressed
to be payable unless such payment is caused solely by technical
delays in the transmission of funds and such amount is paid within
three (3) Business Days of its due date; or
(b) any member of the Group fails to comply with any of its obligations
and undertakings under any of the Financing Documents (other than
the obligations and undertakings referred to in the foregoing Clause
15.1(a)) and, if, in the opinion of the Majority Creditors, capable
of remedy, such failure is not remedied within fifteen (15) Business
Days after notice of such failure has been given by the Agent to the
Company; or
(c) any representation, warranty or statement made or deemed to be
repeated by any member of the Group under any of the Financing
Documents or in any notice, certificate or statement of fact
referred to in or delivered under any of the Financing Documents is
or proves to have been incorrect when made or deemed to have been
repeated; or
(d) any of the Financing Documents is not or ceases to be in full force
and effect or the validity or enforceability of any of the terms of
any of the Financing Documents shall be contested by any of the
members of the Group; or
(e) any Indebtedness in excess of, in aggregate, (pound)1,000,000 of any
of the members of the Group:
(i) is declared to be or otherwise becomes due and payable prior
to its specified maturity; or
(ii) is not paid when due or within any applicable grace period in
any agreement or instrument relating to the relevant
Indebtedness;
or any creditor or creditors of members of the Group become entitled
to declare any such Indebtedness due and payable prior to its
specified maturity; or
(f) a creditor or encumbrancer attaches or takes possession of, or a
distress, execution, sequestration or other process is levied or
enforced upon or sued out against, any of the undertaking and assets
(having a value of at least (pound)500,000) of any of the members of
the Group and, if capable of discharge, such possession is not
terminated or such attachment or process is not discharged within 14
days; or
(g) any of the members of the Group (other than a Dormant Company):
(i) suspends payment of its debts or is unable or admits its
inability to pay its debts as they fall due; or
(ii) commences negotiations with one or more of its creditors with
a view to the general readjustment or rescheduling of all or
part of its Indebtedness which it would otherwise not be able
to pay as it falls due; or
(iii) proposes or enters into any composition or other arrangement
for the benefit of its creditors generally or any class of
creditors; or
(h) other than in respect of a petition for winding-up which is proved
to the satisfaction of the Majority Creditors to be either frivolous
or vexatious and which is discharged within 21 days of such petition
being served, any of the members of the Group takes any action or
any legal proceedings are started or other legal steps taken for:
(i) any of the members of the Group (other than a Dormant Company)
to be adjudicated or found bankrupt or insolvent; or
(ii) the winding-up or dissolution of any of the members of the
Group (other than (a) in respect of a Dormant Company or (b)
in connection with a solvent reconstruction, the terms of
which have been previously approved in writing by the majority
Creditors); or
(iii) the appointment of a trustee, receiver, administrative
receiver, or similar officer of any of the members of the
Group (other than a Dormant Company) or the whole or any part
of their respective undertaking and assets; or
(i) any adjudication, order or, as the case may be, appointment is made
under or in relation to any of the proceedings referred to in Clause
15.1(h); or
(j) an application is made to the court for an administration order
under the Insolvency Act 1986 with respect to any of the members of
the Group (other than a Dormant Company); or
(k) any event occurs or proceeding is taken with respect to any member
of the Group (other than a Dormant Company) in any jurisdiction to
which it is subject which has an effect equivalent or similar to any
of the events mentioned in Clause 15.1(f),(g),(h),(i) or (j); or
(l) any of the members of the Group (other than a Dormant Company)
suspends, ceases or threatens to suspend or cease to carry on its
business; or
(m) at any time there occurs a change in the financial condition or
business condition of any of the members of the Group which (in the
reasonable opinion of the Majority Creditors) has, or could
reasonably be expected to have, a Material Adverse Effect (as
defined hereunder and under the US Loan Notes Instrument); or
(n) without the prior consent of the Majority Creditors, the Company
makes any redemption of, or purchases, any of its share capital or
the Convertible Capital Bonds or otherwise reduces its share
capital; or
(o) there occurs a Change of Control; or
(p) a final judgment for the payment of money in any amount in excess of
(pound)1,000,000 (or the equivalent in other currency) net of
insurance proceeds received, is rendered against the Company or any
Material Subsidiary and, within 14 days after entry thereof, such
judgment is not discharged or dismissed or execution thereof stayed
pending appeal, or within 14 days after the expiration of any such
stay such judgment is not discharged; or
(q) an Event of Default occurs under, and as such term is defined in,
the US Loan Notes Instrument.
15.2 Acceleration etc.
15.2.1 At any time when any Default remains unremedies the Agent shall is
instructed by, in relation to a Default referred to in Clause 15.1(a), the
Majority Banks and in relation to all other Defaults, the Majority
Creditors by notice to the Company
cancel the Term Loan Facility and/or the Revolving Loan Facility and/or
the Overdraft Facility in whole or in part and:
(a) require the Borrowers immediately to repay the Term Loan, the
Revolving Loan and the Overdraft Outstanding together with accrued
interest thereon and immediately to pay all other sums payable under
this Agreement, whereupon the same shall become immediately due and
payable; or
(b) place the Term Loan, the Revolving Loan and all overdrafts made
available under the Overdraft Facilities on demand, whereupon the
same and all other sums payable hereunder shall become repayable on
demand made by the Agent on the instructions of the Majority
Creditors.
Upon the service of any such notice by the Agent the Banks' obligations
shall be terminated and each of the Banks' Commitments shall be cancelled
and reduced to zero.
15.2.2 Forthwith upon the Agent serving notice under Clause 15.2.1, each
Borrower shall in respect of each Engagement entered into or issues at its
request:
(i) use its best endeavours to procure the release of the Working
Capital Bank from, such Engagement; and
(ii) without prejudice to (i) above, pay to the credit of such account as
the working Capital Bank issuing such Engagement shall stipulate an
amount equal to the maximum actual and contingent liabilities of the
Working Capital Bank under such Engagement and charge the same to
the Working Capital Bank on such terms as the Working Capital Bank
may stipulate.
16. SET-OFF AND PRO RATA PAYMENTS
16.1 Set-Off
Each Borrower hereby authorises each of the Agent, the Banks and the
Working Capital Bank to apply any credit balance on any account of such
Borrower with any of the Agent, the Banks and the Working Capital Bank in
satisfaction of any sum due and payable from such Borrower pursuant to the
terms of the Financial Documents. For this purpose each of the Agent, the
Banks and the Working Capital Bank is authorised to purchase at its spot
rate of exchange with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such
application.
16.2 Pro Rata Sharing
16.2.1 If any Bank (the "Sharing Bank") shall at any time obtain (whether by way
of voluntary or involuntary payment right of set-off, or otherwise) a
proportion in
respect of its Participation in the Advances which is greater than the
proportion obtained by the Bank or Banks respectively obtaining the
smallest proportion of its Participation in the Advances, including a nil
receipt, (the amount so obtained by the Sharing Bank which represents such
excess being herein called "the excess amount")
then:
(i) the Sharing Bank shall promptly pay to the Agent, for the account of
the Banks, an amount equal to the excess amount, whereupon the Agent
shall notify the Company of such amount and its receipt by the
Agent;
(ii) the Agent shall treat such payment as if it were a payment by the
Borrowers on account of sums owned to the Banks; and
(iii) as between the Company and the Sharing Bank the excess amount shall
be treated as not having been paid, while as between the Company and
each Bank it shall be treated as having been paid to the extent any
monies are received by such Bank.
If, because of the liquidation of the Company, or for any other reason
affecting the Company, the provisions of paragraph (iii) above cannot be
given effect to as between the Banks on the one hand and the Company on
the other hand then, as between the Banks, the Sharing Bank shall be
treated as having purchased from each other Bank an amount of the
Participations of that Bank in Advances which is equal to that part of the
excess amount which is paid to that Bank and the Sharing Bank shall,
accordingly, be entitled to receive all dividends and other payments
received by that Bank in respect of such Participations, as the case may
be, deemed to have been purchased by it.
16.2.2 Each Bank shall forthwith notify the Agent of any such receipt or
recovery by it other than by payment through the Agent.
16.2.3 If any excess amount subsequently has to be wholly or partly refunded to
the Company by any Sharing Bank which has paid an amount equal thereto the
Agent under Clause 16.2.1, each Bank to which any part of that amount was
distributed shall on request from the Sharing Bank repay to the Sharing
Bank such Bank's pro rata share of the amount which has to be so refunded
by the Sharing Bank. Each Bank shall on request supply to the Agent such
information as the Agent may from time to time request for the purpose of
this Clause 16.2. Notwithstanding the foregoing provisions of this Clause
16.2, no Sharing Bank shall be obliged to share any excess amount which it
receives or recovers pursuant to legal proceedings taken by it to recover
any sums owing to it under this Agreement with any other party which has a
legal right to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its rights in the
same or another court, unless the proceedings instituted by the Sharing
Bank are instituted by it without prior notice having been given to such
party through the Agent and an opportunity to such party to join in such
proceedings.
16.2.4 Nothing in this Agreement shall oblige the Agent or any Bank to apply any
credit balance or other benefit received from the Borrower against the
liabilities of the
Borrower under this Agreement in priority to any other liabilities of the
Borrower to the Agent or that Bank.
17. THE AGENT AND THE BANKS
17.1 Appointment and Duties
17.1.1 Each Bank hereby irrevocably appoints the Agent to act as its agent in
connection with the administration of the Facilities and for such
purposes irrevocably authorizes and the Agent to take such action and to
exercise and carry out all the discretions, authorities, rights, powers
and duties as are specifically delegated to the Agent in the Financing
Documents together with such powers and discretions as are incidental
thereto.
17.1.2 The Agent shall have no duties or responsibilities except those
expressly set out in the Financing Documents. As to any matters not
expressly provided for by this Agreement, the Agent shall, subject to
the provisions hereof or thereof, act hereunder or thereunder or in
connection herewith or therewith in accordance with the instructions of
the Majority Banks (but in the absence of any such instructions shall
not be obliged to act) and any such instructions and any action taken by
the Agent in accordance therewith shall be binding upon all the Banks.
17.1.3 The Agent may:
(a) act as agent or trustee or in a fiduciary or other capacity on
behalf of any other group of banks or financial institutions
providing facilities to any member of the Group or any
associated company of a member of the Group or any associated
company of a member of the Group without regard to the effect of
exercising or omitting to exercise its discretions, authorities,
rights, powers and duties in such capacity in the interests of
the Banks and may act or omit to act in such capacity as freely
in all respects as if the Agent had not been appointed to act as
agent for the Banks; and
(b) subscribe for, hold or be or become beneficially entitled to, or
dispose of, shares of securities, or options or other rights to
and interests in shares or securities in any member of the Group
or any associated company of a member of the Group (and, in each
case, may do so without liability to account).
17.1.4 For so long as Lloyds Bank Plc is the Agent, the Capital Markets Group
of Lloyds Bank Plc shall be treated as a separate entity from any other
of the divisions of the Agent or its Subsidiaries and, notwithstanding
the generality of the foregoing, in the event that any of the Agent's
divisions (including its Capital Market Group) or similar units or
Subsidiaries should act for any member of the Group in any a capacity
(whether as bankers or otherwise) in relation to any other matter, any
information given by any member of the Group to such divisions, similar
units or Subsidiaries
shall be treated as confidential and the Agent shall, as between itself
and the Banks, not be obliged to disclose the same to any Bank or any
other person.
17.1.5 For the purposes of this Agreement, the Agent shall be deemed not to
have any actual knowledge or actual notice of the contents of any
information obtained by it or supplied to it by or on behalf of any
member of the Group other than the contents of information obtained by
or supplied to it as Agent for the Banks pursuant to or in connection
with this Agreement.
17.2 Payments and Information Received
The Agent will promptly account to the Lending Office of each Bank for
such Bank's due proportion of all sums received by the Agent for such
Bank's account, whether by way of repayment or prepayment of principal
or payment of interest, fees or otherwise. The Agent shall provide the
Banks with all information and copies of all notices which by the terms
of this Agreement are to be provided or given to the Banks. The Agent
may retain for its own use and benefit (and shall not be liable to
account to any of the Banks for all or any part of) any sums received by
it by way of agency or management or arrangement fees or by way of
reimbursements of expenses incurred by it.
17.3 Defaults
The Agent shall not be obliged to take any steps to ascertain whether
any Default (other than a default in repayment of principal or in
payment of interest, fees or other sums due pursuant to this Agreement)
or Default Occurrence has happened or exists and, until the Agent shall
have received express notice to the contrary from a Borrower or any
Bank, the Agent shall be entitled to assume that no Default (other than
as aforesaid) or Default Occurrence has happened or exists. Upon receipt
of such notice the Agent shall promptly inform the Banks.
17.4 Assumptions
The Agent shall be entitled to rely on any communication or document
believed by it to be genuine and correct and to have been communicated
or signed by the person by whom it purports to be communicated or signed
and shall not be liable to any of the parties to this Agreement for any
of the consequences of such reliance.
17.5 Legal Proceedings
The Agent shall not be obliged to take or commence any legal action or
proceeding against a Borrower or any other person arising out of or in
connection with the Financing Documents until it shall have been
indemnified or secured to its satisfaction against any and all costs,
claims and expenses (including, but to limited to, any costs award which
may be made against it as a result of any such legal action or
proceeding not being successful) which it may expend or incur in such
legal action or proceeding.
17.6 No Liability
Neither the Agent nor any of its directors, employees or agents shall be
liable for any action taken or omitted to be taken by it or any of them
under or in connection with the Financing Documents unless caused by its
or their gross negligence or wilful misconduct. The Agent shall not be
responsible for any statements, representations or warranties in this
the Financing Documents or for any information supplied or provided or
hereafter to be supplied or provided to any of the Banks and the Working
Capital Bank by the Agent, in respect of a Borrower or any other person
or for any other matter relating to the Facilities or the Financing
Documents or for the execution, effectiveness, genuineness, validity,
enforceability or sufficiency of such documents or any of the other
documents referred to herein or therein or for the recoverability of all
or any of the Loans or any of the other sums to become due and payable
pursuant hereto.
17.7 Credit Decisions
17.7.1 Each Bank and the Working Capital Bank acknowledges that it has,
independently and without reliance on the Agent and based on such
documents and information as it deemed appropriate, made its own
analysis of the transaction reached its own decision to enter into, this
Agreement and made its own investigation of the financial condition and
affairs of the Borrowers and its own appraisal of the creditworthiness
of the Borrowers.
17.1.2 Save as specifically provided herein, the Agent shall not be under nay
duty or obligation, either initially or on a continuing basis, to
provide any Bank or the Working Capital Bank with any credit information
or other information with respect to the financial condition of the
Company or the Borrower of which is otherwise relevant to the
Facilities.
17.7.3 Each Bank and the Working Capital Bank further acknowledges and confirms
that it will, independently and without reliance on the Agent and based
on such documents and information as it shall deem appropriate at the
time, make its own decisions in taking or not taking action under the
Financing Documents.
17.8 Advisers
The Agent shall be entitled to obtain and rely on the advice of any
professional advisers selected by it given in connection with the
Financing Documents or any of the matters contemplated hereby or
thereby, and shall not be liable to any of the Banks and the Working
Capital Bank for any of the consequences of such reliance.
17.9 Relationship with Banks
17.9.1 In performing its functions and duties under this Agreement, the Agent
shall act solely as the agent for the Banks and shall not assume or be
deemed to have assumed any obligation as agent or trustee for, or any
relationship of agency or trust with or the Borrowers.
17.9.2 Neither the Agent nor any Bank nor the Working Capital Bank shall be
under any liability or responsibility of any kind to the Borrowers or
any of the other Banks arising out of or in relation to any failure or
delay in performance or breach by an other Bank or Banks and the Working
Capital Bank or, as the case may be, a Borrower of any of its or their
respective obligations pursuant to the Financing Documents.
17.10 Agent's position as a Bank
With respect to its own Participation in the Loans, the Agent shall have
the same rights and powers under and in respect of the Financing
Documents as though it were not also acting as agent and/or trustee for
the Banks. The Agent may, without liability to account, accept deposits
from, lend money to and generally engage in any kind of banking or trust
business with or for any Borrower as if it were not the agent or the
trustee for the Banks.
17.11 Indemnity
Each of the Banks agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower) rateably according to the Banks' respective
Commitments from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
and disbursements of any kind or nature whatsoever (except in respect of
any agency, management or other fee due to the Agent) which may be
imposed on, incurred by or asserted against the Agent in its capacity as
agent for the Banks or in any way relating to or arising out of the
Financing Documents or any action taken or omitted by the Agent in
enforcing or preserving the rights of the Banks under the Financing
Documents, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Agent's gross negligence or wilful misconduct.
17.12 Resignation
17.12.1 Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving to the
Company and each of the Banks not less than 60 days' notice of its
intention to do so. Upon receipt of such notice of resignation the Banks
shall appoint as successor Agent any bank or financial institution
selected by the Company and the Majority Banks which is willing and able
to act as such agent for the Banks.
17.12.2 If no such successor Agent selected by the Company and the Majority
Banks shall have accepted such appointment within 20 days after the
Agent's giving of notice of resignation then the Majority Banks after
consultation with the Company shall have the right to appoint such a
successor Agent.
17.12.3 If no such successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 40 days after the
Agent's giving of notice of resignation then the resigning Agent may,
after consultation with the
Company, appoint as its successor any reputable and experience bank or
other financial institution with an office in London.
17.12.4 Any such appointment shall take effect upon notice thereof (which notice
shall specify the bank in London to which payments shall be made
thereafter) being given to the Company and each Bank. Thereafter, the
resigning Agent shall be discharged from any further obligation under
the Financing Documents and its successor and each of the other parties
hereto and thereto shall have the same rights and obligations inter se
as they would have had if such success had been a party to the Financing
Documents in place of the resigning Agent. The resigning Agent shall
make over to its successor all such records as its successor requires to
carry out its duties.
17.13 Change of Office
The Agent may from time to time in its sole discretion by written notice
to the Company and each Bank designate a different office in the United
Kingdom from which its duties as the Agent will thereafter be performed.
17.14 Scope of Duties
The Agent may (except where the same is required by the express
provisions of this Agreement to be authorised by all the Banks or the
Majority Creditors) grant waivers, vary the terms of the Financing
Documents and do or omit to do all such acts and things in connection
therewith as may be authorised in writing by the Majority Banks. Any
such waiver, variation, act or omission so authorised and effected by
the Agent shall be binding on all the Banks and the Agent shall be under
no liability whatsoever in respect of any such waiver, consent,
variation, act or omission. Except with the prior written agreement of
all the Banks, nothing in this Clause shall authorise (as between the
Agent and the Banks) (i) any change in the rate at which any interest or
commission is payable under this Agreement, (ii) any extension of the
date for, or alteration in the amount or currency of, the payment of any
principal, interest, fees or any other amount payable under this
Agreement, (iii) "Majority Banks" in Clause 1.1, (v) any variation of
Clause 8, 9 or 15 and this Clause 17 or (vi) any provision of this
Agreement which requires the consent of all the Banks.
17.15 Consents
The Agent may at any time upon the application and at the cost of the
Borrowers and without any consent of any of the Banks (only if and so
far as its reasonable opinion the interests of the Banks shall not be
materially prejudiced thereby) give any consent, approval or license
required on the Agent under the terms of this Agreement, save where this
Agreement expressly requires that such consent, approval or license
should be given only with the approval of, or on the instructions of,
the Banks, the Majority Banks or the Majority Creditors.
17.16 Evidence
The Agent may accept a certificate signed by any director of the
secretary of the Company or any Borrower as to any fact or matter on
which the Agent may need or wish to be satisfied as sufficient evidence
thereof and a like certificate that any assets in the opinion of the
person so certifying have a particular value or produce a particular
income or are suitable for a particular purpose as sufficient evidence
that they have that value or produce that income or are so suitable and
the Agent shall not be bound in any such case to call for further
evidence or be responsible for any loss that may be occasioned by its
failing to do so.
17.17 Distribution of Proceeds of Enforcement
17.17.1 In this Clause 17.17 the following expressions shall have the following
meanings:
"Bank Outstandings" means, in respect of a Bank (which expression for
the purposes of this Clause 17.17 shall include the Working Capital
Bank), the aggregate amount owed to such Bank by way of principal,
interest, commission and fees in respect of the Facilities, including
all amounts actually or contingently owed to the Working Capital Bank at
such time under, or in respect of, the uncommitted Engagements Facility;
and
"Total Outstandings" means the aggregate of the Bank Outstandings of
each Bank.
17.17.2 Subject to the terms of the Intercreditor Agreement on the enforcement
of all or any of the Security Documents, any amount of enforcement
proceeds paid to the Agent pursuant to the Intercreditor Agreement shall
be applied as follows. The Agent shall be entitled to deduct from the
proceeds of such enforcements its costs, charges and expenses incurred
in connection with such enforcement together an amount equal to all sums
due to the Agent hereunder before distributing to each Bank an amount
equal to the remaining proceeds multiplied by:
Bank Outstanding of such Bank
Total Outstandings
where Bank Outstandings, the Working Capital Bank's Outstandings and the
Total Outstandings are all calculated as at the date of enforcement.
17.17.3 The Agent shall notify each Bank of any proposed distribution and the
proposed date of distribution and each Bank shall provide to the Agent a
calculation of what is due to it in respect of the sums referred to in
Clause 17.17.1. The Agent shall send copies of all such calculations to
all other Banks and, in the absence of manifest error, the Agent shall
make the distributions on the basis of such calculations.
17.17.4 If any continent liability incurred in the calculation of Bank's
Outstandings finally matures or is settled for less than the contingent
amount provided for in the relevant calculations then the relevant Bank
shall notify the Agent of that fact and such adjustment shall be made by
payment by such Bank to the Agent for distribution amongst the Banks as
may be necessary to put the Banks into the position they
would have been in (but taking no account of the time cost of money) had
the original distribution been made on the basis of the actual as
opposed to the contingent liability.
17.17.5 The Agent may, at its discretion, accumulate proceeds of realisations on
an interest bearing account in its own name until there is a minimum of
(pound)500,000 to distribute under Clause 17.17.2.
17.18 Net Limits
For the avoidance of doubt, any credit balances taken into account by a
Bank when operating a net limit in respect of any overdraft under the
Overdraft Facility shall not be subject to Clause 16.2 and shall, on the
enforcement of the Security Documents, be applied first in reduction of
the relevant overdraft provided under the Overdraft Facility to the
extent taken into account in operating the net limit.
18. FEES AND EXPENSES
18.1 Expenses
The Company shall, on demand, pay all expenses (including, but not
limited to, legal, valuation and accounting fees) and any VAT thereon
incurred by:
(i) the Agent and the Banks in connection with the negotiation,
preparation and execution of any of the Financing Documents and
the other documents contemplated hereby and thereby now or at
any time hereafter;
(ii) the Agent, the Banks and the Working Capital Bank in connection
with the granting of any release, waiver or consent or in
connection with any variation of any Financing Document; and
(iii) the Agent, the Banks and the Working Capital Bank in enforcing,
perfecting, protecting or preserving (or attempting so to do)
any of their rights, or in suing for or recovering any sum due
from a Borrower or any other person under any Financing
Document.
18.2 Agency Fees
The Company shall pay to the Agent agency fees in accordance with the terms of
the Fees Letter. For the avoidance of doubt, all liabilities and obligations of
the Company under the Fees Letter are hereby deemed to be incurred under this
Agreement.
18.3 Commitment Fee
18.3.1 The Company shall pay a commitment fee in Sterling in respect of the
Revolving Loan Facility and (for so long as it is not payable on demand)
the Overdraft Facility to the Agent for the account of the Banks (pro
rata to their Revolving Loan
Commitments and Overdraft Commitments) at a rate equal to half the
Margin on the difference from time to time between (i) the Total
Revolving Loan Commitments and the Total Overdraft Commitments and (ii)
the Revolving Loan and the Overdraft Outstandings.
18.3.2 Such fees shall accrue day to day on the basis of a 365 day year and the
number of days elapsed in respect of each successive period of 3 months
from the date hereof and shall be paid on the relevant Bank's usual
quarterly charging days.
18.4 Deferred Fee
18.4.1 Subject to Clause 18.4.2 the Borrowers shall pay a fee in Sterling to
the Agent, for the accounts of the Banks and the Working Capital Bank,
pro rata to their Commitments and in the case of the Working Capital
Bank the amount of the Uncommitted Engagements Facility, on 2nd January
1996 equal to 1.00 per cent. of the aggregate amount of the Facilities
as at 31st December 1995.
18.4.2 Payment of the fee referred to in Clause 18.4.1 may be deferred until
29th February 1995 PROVIDED THAT if such fee is paid in the period set
out in Column A below, it shall be increased by the amount set out in
Column B below opposite the relative period:
Column A Column B
-------- --------
(pound)
03.01.96 to 31.09.96 50,000
01.02.96 to 29.02.96 100,000
18.5 Facility Fee
The Company shall following the raising of New Equity or the occurrence of a
Majority Disposal, pay to the Agent, for the account of the Banks and
the Working Capital Bank, pro rata to their Commitments and in the case
of the Working Capital Bank the amount of the Uncommitted Engagements
Facility, a facility fee in Sterling equal to 1.00 per cent. per annum
of the aggregate available amount of the Facilities. Such fee shall
accrue from day to day, be calculated on the basis of a year of 365 days
and be paid in arrear of each 31st May and 30th November and on the
Final Repayment Date.
18.6 Success Fee
The Company shall pay to the Agent, for the account of the Banks and the
Working Capital Bank, pro rata to their Total Sterling Commitments, a
success fee in Sterling calculated as follows:
(i) if a New Equity Raising occurs by 30th April 1996, a success fee
of (pound)100,000 shall be payable on the date the proceeds
thereof are received by the Company; or
(ii) if a New Equity Raising or a Major Disposal or a Change of
Control occurs on a date (the "Relevant Date") (but in the case
of a New Equity Raising being after 30th April 1996) in the
period set out in Column A below, a success fee equal to the
percentage per annum, set out in Column B below opposite the
relative period, of the average aggregate available amount of
the Facilities for the period from the date of this Agreement to
the Relevant Date shall be payable on the Relevant Date:
Column A Column B
-------- --------
the date of this Agreement to 30th September 1996 1.00%
1st October 1996 to 31st December 1996 1.50%
1st January 1997 to 31st March 1997 2.00%
1st April 1997 and thereafter 3.00% or
(iii) if no New Equity Raising, Major Disposal or Change of Control
has occurred by the Final Repayment Date, a success fee equal to
3 per cent. per annum of the average aggregate available amount
of the Facilities for the period from the date of this Agreement
to the Final Repayment Date shall be payable on the Final
Repayment Date.
18.7 Documentary Tax Indemnity
All stamp, documentary, registration or other like duties or Taxes,
including any penalties, additions, fines, surcharges or interest
relating thereto, which are imposed or charged on or in connection with
any of the Financing Documents shall be paid by the Company PROVIDED
THAT the Agent shall be entitled but not obliged to pay any such duties
or Taxes (whether or not they are its primary responsibility), whereupon
the Company shall on demand indemnify the Agent against those duties or
Taxes and against any costs and expenses so incurred by the Agent in
discharging them.
18.8 VAT
18.8.1 All payments made under the Financing Documents are calculated without
regard to Value Added Tax. If any such payment constitutes the whole or
any part of the consideration for a taxable or deemed taxable supply
(whether that supply is taxable pursuant to the exercise of an option or
otherwise) by the Agent or a Bank, the amount of that payment shall be
increased by an amount equal to the amount of VAT which is chargeable in
respect of the taxable supply in question.
18.8.2 No payment or other consideration to be made or furnished by any of the
Agent, the Bank or the Working Capital Bank to a Borrower pursuant to or
in connection with the Financing Documents or any transaction or
document contemplated herein may be increased or added to by reference
to (or as a result of any increase in the rate of) any VAT which shall
be or may become chargeable in respect of any taxable supply.
18.9 Indemnity Payments
Where in the Financing Documents a Borrower has an obligation to
indemnify or reimburse any of the Agent, the Banks and the Working
Capital Bank in respect of any loss or payment, the calculation of the
amount payable by way of indemnity or reimbursement shall take account
of the actual Tax treatment in the hands of such person (as determined
by the relevant person's auditors) of the amount payable by way of
indemnity or reimbursement together with the loss or payment in respect
of which the amount is payable.
19. SEVERABILITY, WAIVERS, REMEDIES CUMULATIVE
19.1 Severance
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction neither the legality, validity or enforceability of the
remaining provisions hereof nor the legality, validity or enforceability
of such provision under the law of any other jurisdiction shall in any
way be affected or impaired thereby.
19.2 Waivers
No failure to exercise, nor any delay in exercising, on the part of any
of the Agent, the Banks or the Working Capital Bank, any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or remedy. The
rights and remedies herein provided are cumulative and not exclusive of
any rights or remedies provided by law.
20. NOTICES
20.1 Method
Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by telex, facsimile transmission or
letter.
20.2 Delivery
Any communication or document to be made or delivered by one person to
another pursuant to this Agreement shall (unless the one has by 15 days'
written notice to the other specified another address) be made or
delivered to that other person, in the case of the Borrowers, at the
address given in Clause 20.3 or the relative Deeds of Accession, the
Agent and the Working Capital Bank at the respective addresses given in
the Clause 20.3, in the case of the Banks at the respective addresses
given in Schedule 1 or, as the case may be, the Schedule of the relative
Transfer Certificate.
20.3 Addresses
The addresses referred to in Clause 20.2 above are:
(A) the Borrowers:
The Clockhouse
The Campus
Hemel Hempstead
Hertfordshire HPQ 7TL
Attention: P. Bertram and A. Thompson
Fax: 01442 62129/60121
(B) the Agent:
Lloyds Bank Plc
Bank House
Wine Street
Bristol BS1 2AN
Attention: Loans Administration
Ans: LYOD LN
Telex: 888301
Fax: 01272 233367
(C) the Working Capital Bank:
Midland Bank plc
St. Magnus House
3 Lower Thames Street
London EC3R 6HA
Attention: Mrs. K. L. Bidwell
Tel: 0171 260 5654
Fax: 0171 260 5791
20.4 Deemed Receipt
20.4.1 Any notice given by the Agent shall be deemed to have been received:
(a) if sent by telex with the relevant answerback appearing at the
beginning and end of the relevant telex on the Business Day on
which transmitted;
(b) if sent by facsimile transmission, one Business Day after the
date it was transmitted;
(C) in the case of a written notice lodged by hand, at the time of
actual delivery; or
(d) if posted, on the second Business Day following the day on which
it was properly dispatched by first class mail postage prepaid.
20.4.2 Any notice given to the Agent shall be deemed to have been given only on
actual receipt.
20.5 Notices to the Banks
Any notice to be given by a Borrower to the Banks or any of them may be
given by serving such notice on the Agent together with a written
instruction that such notice is to be treated as notice to one or more
specified Banks. In the absence of such written instructions it shall be
deemed to be a notice to the Agent alone.
21. ASSIGNMENT AND TRANSFERS
21.1 Benefit of Agreement
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its successors and assigns.
21.2 Assignment and Transfers by the Borrowers
A Borrower shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations under this Agreement.
21.3 Assignments and Transfers by Banks
21.3.1 Any Bank with the prior written consent of the company, such consent not
to be unreasonably withheld or delayed, may at any time assign all or
any of its rights and benefits under any of the Financial Documents or
any Bank may transfer in accordance with Clause 21.3.3 below all or any
of its rights, benefits and obligations under any of the Financing
Documents, in each case, to any person that is a Qualifying Bank.
21.3.2 If any Bank assigns all or any of its rights and benefits under any of
the Financing Documents in accordance with Clause 23.3.1, then, unless
and until the assignee has confirmed to the Agent, the Working Capital
Bank and other Banks that it shall be under the same obligations towards
each of them as it would have been under if it had been a party hereto
as a Bank, the Agent, the Working Capital Bank and the other Banks shall
not be obliged to recognise such assignee as having the rights against
each of them which it would have had if it had been such a party hereto.
21.3.3 If any Bank (the "Existing Bank") wishes to transfer all or any part of
its Commitment or Participations in Advances to another bank or
financial institution (the "Bank Transferee"), such transfer may be
effected by way of a novation by the delivery to, and the execution by,
the Agent of a duly completed Transfer Certificate.
21.3.4 On the date specified in the Transfer Certificate:
(i) to the extent that in the Transfer Certificate the Existing Bank
seeks to transfer its Commitment or Participations, the
Borrowers and the Existing Bank shall each be released from
further obligations to each other under this Agreement and their
respective rights against each other shall be cancelled (such
rights and obligations being referred to in this Clause 21.3.4
as "Discharged Rights and Obligations");
(ii) the Borrowers and the Bank Transferee shall each assume
obligations towards each other and/or acquire rights against
each other which differ from the Discharged Rights and
Obligations only insofar as the Borrower and the Bank Transferee
have assumed and/or acquired the same in place of the Borrower
and the Existing Bank;
(iii) the Agent, the Borrowers, the Working Capital Bank, the Bank
Transferee and the other Banks shall acquire the same rights and
assume the same obligations among themselves as they would have
acquired and assumed had the Bank Transferee been a party
hereunder as a Bank with the rights and/or the obligations
acquired or assumed by it as a result of the transfer;
(iv) a proportion of the Existing Bank's rights under the Security
Documents equal to the proportion of the Existing Bank's rights
under this Agreement being transferred, shall automatically be
transferred to the Bank Transferee; and
(v) a proportion of the Existing Bank's rights and obligations under
the Intercreditor Agreement equal to the proportion of the
Existing Bank's rights under this Agreement being transferred
shall automatically be transferred to the Bank Transferee in
accordance with the terms of the Intercreditor Agreement.
21.3.5 The Agent will promptly complete Transfer Certificates on request by an
Existing Bank and upon payment by such Existing Bank of a fee of
(pound)750 to the Agent. The Working Capital Bank, the Borrowers and
each of the Banks hereby irrevocably authorize the Agent to execute any
duly completed Transfer Certificate on its behalf provided that such
authorisation does not extend to the execution of a Transfer Certificate
on behalf of either the Existing Bank or the Bank Transferee named
therein.
21.3.6 The Agent shall promptly notify the Company of the receipt and execution
on its behalf by the Agent of any Transfer Certificate.
21.3.7 A Borrower shall be under no obligation to pay any greater amount under
this Agreement following an assignment or transfer by a Bank of any of
its rights or obligations pursuant to the foregoing provisions of this
Clause 21 where, in the circumstances existing at the time of such
assignment or transfer, such greater amount would not have been payable
but for the assignment or transfer.
21.4 Disclosure of Information
The Agent and the Banks may not disclose any information furnished or
made available to them hereunder by the Borrowers unless such
information is available in the public domain PROVIDED THAT such
information may be disclosed to each other, their professional advisers
and to any actual or potential assignee, transferee or sub-participant
subject to the condition that each of the same undertakes to the Company
to keep confidential any such information and not disclose it save in
accordance with the provisions of this Clause 21.4.
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts and all
such counterparts when executed and taken together shall constitute one
and the same Agreement.
23. LAW
This Agreement shall be governed by, and construed in all respects in
accordance with, English law.
24. CURRENCY INDEMNITY
Any payment or payments made to or for the account of or received by the
Agent, the Working Capital Bank or any Bank in respect of any monies or
liabilities due, arising or incurred by any Borrower to the Agent, the
Working Capital Bank or any Bank in a currency (the "Currency of
Payment") other than the currency in which the payment should have been
made pursuant to this Agreement (the "Currency of Obligation") in
whatever circumstances (including, without limitation, as a result of a
judgment against such Borrower) and for whatever reason shall constitute
a discharge to such Borrower to the extent of the Currency of Obligation
amount which the Agent, the Working Capital Bank or Bank, as the case
may be, is able on the date or dates of receipt of such payment or
payments (or if not a Business Day on the next succeeding Business Day)
to purchase with the Currency of Payment amount in the London foreign
exchange market. If the amount of the Currency of Obligation which the
Agent, the Working Capital Bank or that Bank is so able to purchase
falls short of the amount originally due to the Agent, the Working
Capital Banks or that Bank, as the case may be, under this Agreement,
then such Borrower shall indemnify and hold the Agent, the Working
Capital Banks or that Bank, as the case may be, harmless against any
loss or damage arising as a result thereof by paying to the Agent, the
Working Capital Bank or that Bank, as the case may be, that amount in
the Currency of Obligation certified by the Agent, the Working Capital
Bank or that Bank, as the case may be, as necessary so to indemnify it.
It is hereby declared that this indemnity shall constitute a separate
and independent obligation from the other obligations contained in this
Agreement, shall give rise to a
separate and independent cause of action, shall apply irrespective of
any indulgence granted from time to time and shall continue in full
force and effect notwithstanding any judgment or order for a liquidated
sum or sums in respect of amounts due under this Agreement or under any
such judgment or order. The certificate of the Agent, the Working
Capital Bank or the relevant Bank, as the case may be, as to the amount
of any such loss or damage as aforesaid shall, in the absence of
manifest error, be conclusive and binding on each Borrower.
IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed on the date set out above.
SCHEDULE 1
THE BANKS
Term Loan Revolving Loan Overdraft
Bank and Address for Commitment Commitment Commitment
Lending Office Notices US$ (pound) (pound)
- -------------- ------- --- ------- -------
Lloyds Banks Plc Lloyds Banks Plc 4,883,665 6,879,355 --
Corporate Banking Division Corporate Banking Division
St. Georges House St. Georges House
6-8 Eastcheap 6-8 Eastcheap
London EC3M 1LL London EC3M 1LL
Attention: Nigel Robinson
Telephone: 0171-418 3532
Fax: 0171-489 8315
ABN AMRO Bank N.V. ABN AMRO Bank N.V. 13,953,615 19,655,705 --
101 Moorgate 101 Moorgate
London EC2M 6SB London EC2M 6SB
Attention: Paul Hodgson
Telephone: 0171-477 5128
Fax: 0171-638 3832
Midland Bank plc Midland Bank plc 4,651,109 6,551,767 3,609,782
St. Magnus House St. Magnus House
3 Lower Thames Street 3 Lower Thames Street
London EC3R 6HA London EC3R 6HA
Attention: Stephen Long/
Kathy Bidwell
Telephone: 0171-260 5646/
0171-260 5650
Fax: 0171-260 5791
National Westminster Bank Plc National Westminster Bank Plc 4,651,109 6,551,767 --
135 Bishopsgate 135 Bishopsgate
London EC2M 3UR London EC2M 3UR
Attention: Steve Hearne
Telephone: 0171-375 5000
Fax: 0171-375 5035
The Bank of Tokyo, Ltd. The Bank of Tokyo, Ltd. 2,325,555 3,275,883 --
12-15 Finsbury Circus Finsbury Circus House
London EC2M 7BT 12-15 Finsbury Circus
London EC2M 7BT
Attention: Manager - Loans
Administration
Telephone: 0171-216 1122
Telex: 946178 TOH LAD G
Fax: 0171-216 1188
Term Loan Revolving Loan Overdraft
Bank and Address for Commitment Commitment Commitment
Lending Office Notices US$ (pound) (pound)
- -------------- ------- --- ------- -------
The Fuji Bank, Limited The Fuji Bank, Limited 2,325,555 3,275,883 --
River Plate House River Plate House
7-11 Finsbury Circus 7-11 Finsbury Circus
London EC2M 7DH London EC2M 7DH
Attention: Stephen Odell/
Robert Pettitt
Telephone: 0171-588 2211
Fax: 0171-588 1400
BHF Bank A.G. BHF Bank A.G. 2,325,555 3,275,883 --
61 Queen Street 61 Queen Street
London EC4R 1AE London EC4R 1AE
Attention: P. Firth/
Christine Youds
Telephone: 0171-634 2300
Fax: 0171-220 7140
Banco Central Banco Central 1,162,777 1,637,942 --
Hispanoamericano S.A. Hispanoamericano S.A.
15 Austin Friars 15 Austin Friars
London EC2N 2DJ London EC2N 2DJ
Attention: Robert Soper/
Glenn Francis
Telephone: 0171-588 0181
Fax: 0171-588 5825
Banco Bilbao Vizcaya, S.A. Banco Bilbao Vizcaya, S.A. 930,222 1,310,353 --
100 Cannon Street 100 Cannon Street
London EC4N 6EH London EC4N 6EH
Attention: George Silva-Rozzi
Telephone: 0171-623 3060
Fax: 0171-929 4718
Barclays Bank PLC Barclays Bank PLC 2,790,838 3,931,303 --
Piccadilly Business Centre Piccadilly Business Centre
1/3 Arlington Street 1/3 Arlington Street
London SW1A 1RA London SW1A 1RA
Attention: Peter Chappel
Telephone: 0171-930 2383
Fax: 0171-441 6650
SCHEDULE 2
DRAWDOWN NOTICE
To: Lloyds Bank Plc
Bank House
Wine Street
Bristol BS1 2AN
Date
Dear Sirs,
Credit Agreement dated * made between (1) Automated Security (Holdings) PLC (2)
the Banks (3) Lloyds Bank Plc (as Agent), inter alios, and (4) Midland Bank plc
(as Working Capital Bank) (the "Credit Agreement")
Words and expressions defined in the Credit Agreement shall have the same
meanings when used herein. We hereby give you notice of the following proposed
borrowing of an Advance under the Credit Agreement.
The relevant details are as follows:
1. Facility:
2. Amount of Advance:
3. Currency of Advance:
4. Proposed Drawdown Date:
5. Duration of Interest Period:
6. Payment Instructions:
We confirm that no Default or Default Occurrence has occurred and is continuing
and that the representations and warranties deemed to be made on the proposed
Drawdown Date pursuant to Clause 13.3 of the Credit Agreement will be true and
correct on such Drawdown Date.
SIGNED
For and on behalf of
AUTOMATED SECURITY (HOLDINGS) PLC
(a company incorporated in England and Wales
under number 321639)
SCHEDULE 3
MANDATORY LIQUID ASSET COSTS FORMULA
(1) The additional rate relative to an Advance shall, subject as hereinafter
provided, be calculated in accordance with the following formula:
BY + L(Y-X) + S(Y-Z)% per annum
--------------------
100 - (B+S)
Where on the day of the application of the formula:
B = The percentage of the Agent's eligible liabilities which the
Bank of England then requires the Agent to Hold on a
non-interest-bearing deposit account in accordance with its the
Company ratio requirements.
Y = The rate at which Sterling deposits in an amount comparable with
such Advance are offered by the Agent to leading banks in the
London Inter-Bank Market at or about 11.00 a.m. on such day for
the relevant period.
L = The percentage of eligible liabilities which (as a result of the
requirements of the Bank of England) the Agent maintains as
secured money with members of the London Discount Market
Association or in certain marketable or callable securities
approved by the Bank of England, which percentage shall (in the
absence of evidence that any other figure is appropriate) be
conclusively presumed to be 5 per cent.
X = The rate at which secured Sterling deposits in an amount
comparable to such Advance may be placed by the Agent with
members of the London Discount Market Association at or about
11.00 a.m. on such day for the relevant period or, if greater,
the rate at which Sterling bills of exchange (of an amount
comparable to such Advance and of a tenor equal to the relevant
period) eligible for rediscounting at the Bank of England can be
discounted in the London Discount Market at or about 11.00 a.m.
on that day.
S = The percentage of the Agent's eligible liabilities which the
Bank of England requires the Agent to place as a special
deposit.
Z = The percentage interest rate per annum allowed by the Bank of
England on special deposits.
(2) For the purposes of this Schedule 3:
(i) "eligible liabilities" and "special deposits" shall bear the
meanings ascribed to them from time to time by the Bank of
England; and
(ii) "relevant period" in relation to each Interest Period means:
(a) if it is 3 monthly or less, that Interest Period; or
(b) if it is more than 3 months, 3 months.
(3) In the application of the above formula, B, Y, L, X, S and Z will be
included in this formula as figures and not as percentages, e.g., if B =
0.5% and Y = 15%, BY will be calculated as 0.5 x 15 and not as 0.5% x
15%.
(4) The additional rate computed by the Agent in accordance with this
Schedule 3 shall, if not so already, be rounded upward to 4 decimal
places.
(5) In the event of a change in circumstances (including the imposition of
alternative or additional official requirements) which renders the above
formula inapplicable, the Agent shall notify Newco of the manner in
which the additional rate shall thereafter be determined which shall
reflect the additional costs following such change incurred by the Banks
at such time and from time to time.
SCHEDULE 4
FORM OF TRANSFER CERTIFICATE
TRANSFER CERTIFICATE
To: Lloyds Bank Plc
and the other parties
to the Credit Agreement (as defined below)
This transfer certificate ("Transfer Certificate") relates to a credit agreement
dated * and made by (1) Automated Security (Holdings) PLC, (2) certain other
companies, (3) certain banks (4) Lloyds Bank Plc (as Agent) and (5) Midland Bank
plc (as Working Capital Bank) (the "Credit Agreement" which term shall include
any amendments or supplements thereto).
Terms defined in the Credit Agreement shall, unless otherwise defined, have the
same meanings when used in this Transfer Certificate.
I. *[Details of Existing Bank] (the "Existing Bank"):
1. confirms that to the extent that details appears in the Schedule
to this Transfer Certificate under the headings "Existing Bank's
Commitment" and "Participation in the Advances," those details
accurately summarize its Commitment and its Participation in the
Advances all or part of which is to be transferred; and
2. requests [Details of Bank Transferee] (the "Bank Transferee") to
accept and procure, in accordance with Clause 21.3 of the Credit
Agreement (i) the substitution for the Existing Bank by the Bank
Transferee in respect of the amount specified in the Schedule
hereto of its Commitment and its Participation in the Advances,
and (ii) the transfer of that proportion of the Existing Bank's
rights and obligations under the Security Documents and the
Intercreditor Agreement as determined by Clause 21.3 of the
Credit Agreement, by signing this Transfer Certificate.
II. The Bank Transferee hereby requests each of the Borrowers, the Banks,
the Working Capital Bank and the Agent to accept this executed Transfer
Certificate as being delivered under and for the purposes of Clause 21
of the Credit Agreement so as to take effect in accordance with the
terms of that Clause on [date of transfer] being the date on or before
which an executed copy of this Transfer Certificate is delivered to the
Agent.
III. The Bank Transferee:
1. represents and warrants that as at the date hereof is (i) a
Qualifying Bank, and (ii) an authorized institution under the
Banking Act 1987;
2. confirms that it has received a copy of the Credit Agreement and
the Intercreditor Agreement together with such other documents
and information as it has requested in connection with this
transaction;
3. confirms that it has not relied and will not rely on the
Existing Bank to check or enquire on its behalf into the
legality, validity, effectiveness, adequacy, accuracy or
completeness of any such documents or information and the
Existing Bank will not support any losses suffered by the Bank
Transferee pursuant to this transaction;
4. agrees that it has not relied and will not rely on any of the
Existing Bank, the Agent, the Working Capital Bank and the Banks
to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of the Borrowers or any other party to the Financing
Documents; and
5. confirms that its Lending Office is in the United Kingdom.
IV. The Bank Transferee undertakes with the Existing Bank and each of the
other parties to the Credit Agreement and the Intercreditor Agreement
that it will perform, in accordance with their terms, all those
obligations which, by the terms of the Credit Agreement and the
Intercreditor Agreement, will be assumed by it upon delivery of the
executed copy of this Transfer Certificate to the Agent.
V. On execution of this Transfer Certificate by the Agent on their behalf,
the Borrowers, the Banks, the Working Capital Bank and the Agent and the
other parties to the Intercreditor Agreement accept the Bank Transferee
as a part y to the Credit Agreement in substitution for the Existing
Bank with respect to all those rights and obligations which, by the
terms of the Credit Agreement, will be assumed by the Bank Transferee
after delivery of the executed copy of this Transfer Certificate to the
Agent.
VI. None of the Existing Bank, the Banks, the Working Capital Bank and the
Agent and the other parties to the Intercreditor Agreement:
1. makes any representation or warranty or assumes any
responsibility with respect to the legality, validity,
effectiveness, adequacy or enforceability of any of the
Financing Documents; or
2. assumes any responsibility for the financial condition of the
Borrowers or any other party to any of the Financing Documents
or any other document or for the performance and observance by
the Borrowers or any other party to the Credit Agreement or any
other document and any and all conditions and warranties,
whether express or implied by law or otherwise, are excluded
(save as aforesaid).
VII. The Bank Transferee confirms that its Lending Office and address for
notices for the purposes of the Credit Agreement and the Intercreditor
Agreement are as set out in the Schedule hereto.
VIII. The Existing Bank hereby gives notice to the Bank Transferee (and the
Bank Transferee hereby acknowledges and agrees with the Existing Bank)
that the Existing Bank is under no obligation to re-purchase (or in any
other manner to assume, undertake or discharge any obligation or
liability in relation to) the transferred Commitment and/or
Participation at any time after this Transfer Certificate shall have
taken effect.
IX. Following the date upon which this Transfer Certificate shall have taken
effect, without limiting the provisions hereof, each of the Bank
Transferee and the Existing Bank hereby acknowledges and confirms to the
other that in relation to the relative Commitment and/or Participation
(or part thereof) hereby transferred variations, amendments or
alterations to any of the terms of any of the Financing Documents
arising in connection with any renegotiation or rescheduling of the
obligations hereunder shall apply to and be binding on the Bank
Transferee alone.
X. This Transfer Certificate shall be construed in accordance with, and
governed by, English law.
*[Bank Transferee]
By:__________________________________
(Duly Authorised)
*[Existing Bank]
By:_________________________________
(Duly Authorised)
The Agent on behalf of itself and all other parties to the Credit Agreement and
the Intercreditor Agreement.
By:__________________________________
(Duly Authorised)
Dated:
THE SCHEDULE
Existing Bank's Commitment Amount of Commitment Transferred
Participation in the Amount of Participation
Advances Transferred
[Bank Transferee]
Lending Office Address for notices
* *
Attention: *
Telex: *
Answerback: *
SCHEDULE 5
THE GROUP
PART A
CHARGING GROUP MEMBERS
Company Jurisdiction of Incorporation Registered No.
- ------- ----------------------------- --------------
Automated Security (Holdings) PLC England and Wales 00321639
ASH Capital Finance (Jersey) Jersey, Channel Islands
Limited
Automated Security Limited England and Wales 02467427
Modern Security Systems Limited England and Wales 00822246
Telecom Security Limited England and Wales 01977016
TVX Limited England and Wales 01111792
Automated Loss Prevention Systems England and Wales 02486617
Limited
Automated Security (Properties) England and Wales 00894721
Limited
PART B
OTHER GROUP COMPANIES
All those companies listed in the attached Group Structure diagram other than
the companies referred to in Part A of this Schedule 5.
SCHEDULE 6
FORM OF DEED OF ACCESSION
THIS DEED is made this[_____] day of [_______] 19[__] by [____________________]
(the "New Party") in favour of the other parties to the Credit Agreement (as
defined below).
WHEREAS:
(A) This Deed is supplemental to a credit agreement ("the Credit Agreement")
dated [ _______ ] 19[__] made between (1) Automated Security (Holdings)
PLC Limited, (2) certain other companies, (3) certain banks (4) Lloyds
Bank Plc as agent and (5) Midland Bank plc as working capital bank.
(B) The New Party wishes to accede to the Credit Agreement as a Borrower.
(C) It is a term of the Credit Agreement, that in order to accede as a
Borrower, the New Party must enter into this Deed.
NOW THIS DEED WITNESSETH AS FOLLOWS
(1) Words and expressions defined in the Credit Agreement shall have the
same meanings when used herein.
(2) The New Party hereby:
(i) agrees to be bound by all the terms and conditions of the Credit
Agreement insofar as they relate to a Borrower as if the New
Party was a party to the Credit Agreement in such capacity; and
(ii) represents and warrants to the Agents and the Banks in the terms
of [Clauses 13.2(a)-(g)] but such representations and warranties
shall be given so as to apply, mutatis mutandis, to the New
Party only.
(3) The New Party confirms that it has delivered to the Agent the documents
specified in the Schedule hereto.
(4) The New Party hereby agrees that it shall accede to the Credit Agreement
immediately upon the Agent counter-signing this Deed.
IN WITNESS WHEREOF the New Party has caused this Deed to be duly executed the
day and year first above written.
THE COMMON SEAL of )
[ ] )
was hereunto affixed in )
the presence of: )
Director
Director/Secretary
We hereby agree, on behalf of all parties to the Credit Agreement, that the New
Party shall, from the date of our signature, accede to the Credit Agreement as
if it were a Borrower named therein and a party thereto.
SIGNED
- ---------------------------
for and on behalf of
Lloyds Bank Plc
as Agent
Date: [ ]
SCHEDULE
(a) a Certified Copy of memorandum and articles of association of the New
Party;
(b) a Certified Copy of the resolution of the Board of Directors of the New
Party approving the transactions contemplated by this Deed and the
Guarantee and Debenture referred to below and authorizing the execution
of this Deed, the said Guarantee and Debenture and any other documents
contemplated by the Credit Agreement;
(c) Certified Copies of all other resolutions, authorizations, approvals,
consents and licenses, corporate, official or otherwise, necessary or
desirable, to enable the New Party to give effect to the transactions
contemplated by this Deed and the said Guarantee and Debenture and for
the validity and enforceability of this Deed and the said Guarantee and
Debenture; and
(d) a Guarantee and Debenture.
The Company
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
AUTOMATED SECURITY )
(HOLDINGS) PLC )
The Borrowers
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
ASH CAPITAL FINANCE )
(JERSEY) LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
AUTOMATED SECURITY )
LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
MODERN SECURITY SYSTEMS )
LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
TELECOM SECURITY )
LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
TVX LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
AUTOMATED LOSS PREVENTION )
SYSTEMS LIMITED )
SIGNED by )
PETER BERTRAM ) PETER BERTRAM
for and on behalf of )
AUTOMATED SECURITY )
(PROPERTIES) LIMITED )
The Agent
SIGNED by )
LESLEY TINSLEY ) LESLEY TINSLEY
for and on behalf of )
LLOYDS BANK Plc )
The Banks
SIGNED by )
N ROBINSON ) N ROBINSON
for and on behalf of )
LLOYDS BANK Plc )
SIGNED by )
P F HODGSON ) P F HODGSON
for and on behalf of )
ABN AMRO BANK N.V. )
SIGNED by )
PAUL THOMPSON ) PAUL THOMPSON
for and on behalf of )
MIDLAND BANK plc )
SIGNED by )
STEVEN CHARLES HEARN ) STEVEN CHARLES HEARN
for and on behalf of )
NATIONAL WESTMINSTER )
BANK Plc )
SIGNED by )
DAVID MOSS ) DAVID MOSS
for and on behalf of )
THE BANK OF TOKYO, LTD )
SIGNED by )
R PETTITTE ) R PETTITTE
for and on behalf of )
THE FUJI BANK, LIMITED )
SIGNED by )
MICHAEL DUTFIELD ) MICHAEL DUTFIELD
for and on behalf of )
BHF - BANK AG )
SIGNED by )
W K SCOTT and ) W K SCOTT
R G SOPER ) R G SOPER
for and on behalf of )
BANCO CENTRAL )
HISPANOAMERICANO S.A. )
SIGNED by )
JOSE ANTONIO LOPEZ RUIZ and) JOSE ANTONIO LOPEZ RUIZ
JUAN PEREZ CALOT ) JUAN PEREZ CALOT
for and on behalf of )
BANCO BILBAO VIZCAYA, S.A. )
SIGNED by )
A ALDERSON ) A ALDERSON
for and on behalf of )
BARCLAYS BANK PLC )
The Working Capital Bank
SIGNED by )
PAUL THOMPSON ) PAUL THOMPSON
for and on behalf of )
MIDLAND BANK plc )
JOINT AND SEVERAL
GENERAL CONTINUING GUARANTY
OF
AUTOMATED SECURITY CORPORATION,
SONITROL MANAGEMENT CORPORATION,
SONITROL CORPORATION
AND
AUTOMATED SECURITY HOLDINGS INC.
JOINT AND SEVERAL GENERAL CONTINUING GUARANTY, dated as of December
21, 1995 (as amended from time to time, the "Guaranty"), by Automated Security
Corporation, a Delaware corporation, Sonitrol Management Corporation, a Delaware
corporation, Sonitrol Corporation, a Delaware corporation, and Automated
Security Holdings Inc., a Delaware corporation (each individually a "Guarantor"
and all collectively the "Guarantors"), in favor of (i) Lloyds Bank Plc, as
security trustee (in such capacity, the "Security Trustee") for the banks, the
agent, the working capital lender and the other lenders that either now or in
the future are parties to the Credit Agreement referred to below (collectively,
the "Banks") and the holders of the US Loan Notes referred to below pursuant to
the terms of the Inter-Creditor Agreement referred to below (collectively, the
"U.S. Loan Note Holders", (ii) the Banks and (iii) the U.S. Loan Note Holders
(each of the Security Trustee, the Banks and the U.S. Loan Note Holders being a
"Beneficiary" and all collectively the "Beneficiaries").
R E C I T A L S
A. Pursuant to a Credit Agreement dated as of December 21, 1995 (as
amended from time to time, the "Credit Agreement") by and among Automated
Security (Holdings) PLC, a company incorporated under the laws of England and
Wales ("Holdings"), the Companies listed in Part A of Schedule 5 of the Credit
Agreement (collectively with Holdings, the "Borrowers") and the Banks, the Banks
have agreed to make certain U.S. Dollar-denominated and Sterling-denominated
credit facilities available to the Borrowers, subject to the terms and
conditions set forth therein.
B. The U.S. Loan Note Holders are the holders of certain 8.28% senior
notes (as amended from time to time, the "U.S. Loan Notes") issued by Holdings
pursuant to a note agreement dated 27th May 1994 with The Prudential Insurance
Company of America as amended by a First Amendment dated on or about the date
hereof made between the same parties (as so amended and as otherwise amended
from time to time, the "U.S. Loan Note Agreement").
C. Pursuant to an Inter-Creditor Agreement dated December 21, 1995 (as
amended from time to time, the "Inter-Creditor Agreement") by and among
Holdings, the Security Trustee, the Banks and the U.S. Loan Note Holders, the
Beneficiaries have appointed the Security Trustee to act as its agent and
trustee in connection with this Guaranty.
Guaranty
1
D. Each Guarantor is a direct or indirect Subsidiary of Holdings.
E. In consideration of the provisions of the credit facilities
evidenced by the Credit Agreement and the U.S. Loan Notes and the terms thereof
and of the Inter-Creditor Agreement, the Guarantors have agreed, at the request
of the Borrowers, to guaranty unconditionally any and all of the obligations of
the Borrowers to the Beneficiaries as provided herein.
A G R E E M E N T
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor agrees as follows:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1. Definitions. The following terms with initial capital
letters have the following meanings:
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time, or any successor statute.
"Banks" is defined in the Preamble.
"Beneficiaries" is defined in the Preamble (and for the avoidance of
doubt shall include all Banks and U.S. Loan Note Holders as defined in the
Inter-Creditor Agreement).
"Borrowers" is defined in the Recitals.
"Business Day" shall have the meaning set forth in the Credit
Agreement.
"Collateral" is defined in Section 2.2.
"Credit Agreement" is defined in the Recitals.
"Default" shall have the meaning set forth in the Inter-Creditor
Agreement.
"Default Rate" means the lessor of (i) the rate per annum calculated
in the manner set forth in Clause 8.3 of the Credit Agreement (provided that
determinations therein specified to be made by the Agent shall be made for
purposes hereof by the Security Trustee) and (ii) the maximum rate allowed by
applicable law.
Guaranty
2
"Financing Documents" means the Credit Agreement, the U.S. Loan Notes,
the U.S. Loan Note Agreement, the Inter-Creditor Agreement and all other
Financing Documents (as defined in the Credit Agreement) and Financing
Agreements (as defined in the Inter-Creditor Agreement).
"Funding Guarantor" is defined in Section 2.10.
"Guarantor" and "Guarantors" is defined in the Preamble.
"Guaranty" is defined in the Preamble.
"Holdings" is defined in the Recitals.
"Inter-Creditor Agreement" is defined in the Recitals.
"Material Adverse Effect" shall have the meaning set forth in the
Credit Agreement and "Material Adverse Change" means a change that has had or
will have a Material Adverse Effect.
"Maximum Net Worth" is defined in Section 2.10.
"Net Worth" is defined in Section 2.10.
"Obligations" is defined in Section 2.1.
"Obligor" means each of the Borrowers, the Guarantors and the Other
Guarantors.
"Other Guarantor" is defined in Section 2.2.
"Other Guaranty" is defined in Section 2.2.
"Person" means an individual, a corporation, a partnership, a trust,
an unincorporated organization, joint venture or any other entity or
organization, including a government or any agency or political subdivision
thereof.
"Remaining Guarantor" is defined in Section 2.10.
"Security Trustee" is defined in the Preamble.
"Subordinated Debt" is defined in Section 2.8.
"U.S. Loan Note Agreement" is defined in the Recitals.
"U.S. Loan Note Holders" is defined in the Preamble.
"U.S. Loan Notes" is defined in the Recitals.
Guaranty
3
Section 1.2. Related Matters.
1.2.1. Construction. Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, "including" is not limiting,
and "or" has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder" and similar terms in this Guaranty
refer to this Guaranty as a whole (including the Preamble, the Recitals, the
Schedules and the Exhibits) and not to any particular provision of this
Guaranty. Article, section, subsection, exhibit, schedule, recital and preamble
references in this Guaranty are to this Guaranty unless otherwise specified.
References in this Agreement to any agreement, other document or law "as
amended" or "as amended from time to time," or to amendments of any document or
law, shall include any amendments, supplements, replacements, renewals, waivers
or other modifications not prohibited by the Note Documents. References in this
Agreement to any law (or any part thereof) include any rules and regulations
promulgated thereunder (or with respect to such part) by the relevant
governmental authority, as amended from time to time.
1.2.2. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of New York (other than
choice of law rules that would require the application of the laws of any other
jurisdiction). No reference herein to any provision of California law shall be
construed as a waiver of or otherwise impair the foregoing choice of New York
law.
1.2.3. Headings. The Article and Section headings used in this
Guaranty are for convenience of reference only and shall not affect the
construction hereof.
1.2.4. Severability. If any provision of this Guaranty shall be held
to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
ARTICLE 2.
GUARANTY
Section 2.1. Guaranty. The Guarantors unconditionally jointly and
severally guaranty and promise to pay to the order of the Security Trustee, for
the benefit of the Beneficiaries, on demand, in lawful money of the United
States of America, any and all Obligations of the Borrowers from time to time
owed to the Beneficiaries. The term "Obligations" is used herein in its most
comprehensive sense and includes any and all present and future obligations and
liabilities of the Borrowers of every type and description under any of the
Financing Documents to the Beneficiaries, or any of them, or any of their
successors or assigns, or any Person entitled to indemnification under the
Guaranty
4
Financing Documents, whether for principal, interest, letter of credit or other
reimbursement obligations, cash collateral cover, fees, expenses, indemnities or
other amounts (including attorney's fees and expenses), including without
limitation all Bank Liabilities (as defined in the Inter-Creditor Agreement) and
all Note Holder Liabilities (as defined in the Inter-Creditor Agreement),
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under the Bankruptcy Code (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding, and
whether or not recovery of any such obligation or liability may be barred by a
statute of limitations or such obligation or liability may otherwise be
unenforceable. All Obligations shall be conclusively presumed to have been
created in reliance on this Guaranty. All payments hereunder shall be made on
the same basis as payments by the Borrowers under Section 12.4 of the Credit
Agreement.
Section 2.2. Continuing and Irrevocable Guaranty. This is a continuing
guaranty of the Obligations and may not be revoked and shall not otherwise
terminate unless and until the Obligations have been indefeasibly paid and
performed in full. If notwithstanding the foregoing any Guarantor shall have any
right under Applicable Law to terminate this Guaranty prior to indefeasible
payment in full of the Obligations, no such termination shall be effective until
noon the next Business Day after the Security Trustee shall receive written
notice thereof, signed by such Guarantor. Any such termination shall not affect
this Guaranty in relation to (a) any Obligation that was incurred or arose prior
to the effective time of such notice, (b) any Obligation incurred or arising
after such effective time where such Obligation is incurred or arises either
pursuant to commitments existing at such effective time or incurred for the
purpose of protecting or enforcing rights against any Borrower, any Guarantor or
other Guarantor of or other Person directly or indirectly liable on the
Obligations or any portion thereof (an "Other Guarantor") or any security
("Collateral") given for the Obligations or any other guaranties of the
Obligations or any portion thereof (an "Other Guaranty"), (c) any renewals,
extensions, readvances, modifications or rearrangements of any of the foregoing
or (d) the liability of any other Guarantor hereunder. Without limiting the
generality of the foregoing, if any part of the Obligations arises under
revolving credit facilities, then even if the Borrowers are no longer entitled
to further credit (as a result of the purported termination hereof or
otherwise), no termination of this Guaranty shall in any event be effective to
reduce the obligations of any Guarantor hereunder with respect to any extensions
of credit that may thereafter be made to the Borrowers by the Beneficiaries to
the extent that the outstanding amount of such credit (including letter of
credit and other contingent exposure), together with all other Obligations then
outstanding, does not exceed the aggregate amount of all Obligations outstanding
as of the time any termination of this Guarantor becomes effective.
Guaranty
5
Section 2.3. Nature of Guaranty. The liability of each Guarantor
hereunder is independent of and not in consideration of or contingent upon the
liability of any Borrower or any other Obligor and a separate action or actions
may be brought and prosecuted against any Guarantor, whether or not any action
is brought or prosecuted against any Borrower or any other Obligor or whether
any Borrower or any other Obligor is joined in any such action or actions. This
Guaranty shall be construed as a continuing, absolute and unconditional guaranty
of payment (and not merely of collection) without regard to:
2.3.1. the legality, validity or enforceability of any of the
Financing Document, any of the Obligations, any Lien or Collateral or any Other
Guaranty;
2.3.2. any defense (other than payment), set-off or counterclaim that
may at any time be available to any Borrower or any other Obligor against, and
any right of set-off at any time held by, any Beneficiary; or
2.3.3. any other circumstance whatsoever (with or without notice to or
knowledge of any Guarantor or any other Obligor), whether or not similar to any
of the foregoing, that constitutes, or might be construed to constitute, an
equitable or legal discharge of any Borrower or any other Obligor, in bankruptcy
or in any other instance.
Section 2.4. Authorization. Each Guarantor authorizes each
Beneficiary, without notice to or further assent by such Guarantor, and without
affecting any Guarantor's liability hereunder (regardless of whether any
subrogation or similar right that such Guarantor may have or any other right or
remedy of such Guarantor is extinguished or impaired), from time to time to:
2.4.1. permit any Borrower to increase or create Obligations, or
terminate, release, compromise, subordinate, extend, accelerate or otherwise
change the amount or time, manner or place of payment of, or rescind any demand
for payment or acceleration of, the Obligations or any part thereof (including
increasing or decreasing the rate of interest thereon), or otherwise amend the
terms and conditions of any of the Financing Documents or any provision thereof;
2.4.2. take and hold Collateral from any Borrower or any other Person,
perfect or refrain from perfecting a Lien on such Collateral, and exchange,
enforce, subordinate, release (whether intentionally or unintentionally), or
take or fail to take any other action in respect of, any such Collateral or Lien
or any part thereof;
2.4.3. exercise in such manner and order as it elects in its sole
discretion, fail to exercise, waive, suspend, terminate or suffer expiration of,
any of the remedies or rights of such Beneficiary against any Borrower or any
other Obligor in respect of any Obligations or any Collateral;
2.4.4. release, add or settle with any Obligor in respect of this
Guaranty, any Other Guaranty or the Obligations;
Guaranty
6
2.4.5. accept partial payments on the Obligations and apply any and
all payments or recoveries from any Obligor or Collateral to such of the
Obligations as each Beneficiary may elect in its sole discretion, whether or not
such Obligations are secured or guaranteed;
2.4.6. refund at any time, at such Beneficiary's sole discretion, any
payments or recoveries received by such Beneficiary in respect of any
Obligations or Collateral; and
2.4.7. otherwise deal with any Borrower, any other Obligor and any
Collateral as such Beneficiary may elect in its sole discretion.
Section 2.5. Certain Waivers. Each Guarantor waives:
2.5.1. the right to require the Beneficiaries to proceed against any
Borrower or any other Obligor, to proceed against or exhaust any Collateral or
to pursue any other remedy in any Beneficiary's power whatsoever and the right
to have the property of the Borrowers or any other Obligor first applied to
the discharge of the Obligations;
2.5.2. all rights and benefits under any applicable law purporting to
reduce a guarantor's obligations in proportion to the obligation of the
principal or providing that the obligation of a surety or guarantor must neither
be larger nor in other respects more burdensome than that of the principal;
2.5.3. the benefit of any statute of limitations affecting the
Obligations or any Guarantor's liability hereunder and of Section 359.5 of the
California Code of Civil Procedure;
2.5.4. any requirement of marshaling or any other principle of
election of remedies and all rights and defenses arising out of an election of
remedies by any Beneficiary, even though that election of remedies, such as
nonjudicial foreclosure with respect to the security for a guaranteed
obligation, has destroyed any Guarantor's rights of subrogation and
reimbursement against any Borrower by the operation of Section 580d of the
California Code of Civil Procedure or otherwise;
2.5.5. any right to assert against any Beneficiary any defense (legal
or equitable), set-off, counterclaim and other right that any Guarantor may now
or any time hereafter have against any Borrower or any other Obligor;
2.5.6. presentment, demand for payment or performance (including
diligence in making demands hereunder), notice of dishonor or nonperformance,
protest, acceptance and notice of acceptance of this Guaranty, and all other
notices of any kind, including (i) notice of the existence, creation or
incurrence of new or additional Obligations, (ii) notice of any action taken or
omitted by the Beneficiaries in reliance hereon, (iii) notice of any default by
the Borrowers or any other Obligor, (iv) notice that
Guaranty
7
any portion of the Obligations is due, (v) notice of any action against any
Borrower or any other Obligor, or any enforcement of other action with respect
to any Collateral, or the assertion of any right of any Beneficiary hereunder;
2.5.7 all defenses that at any time may be available to any Guarantor
by virtue of any valuation, stay, moratorium or other law now or hereafter in
effect;
2.5.8. any rights, defenses and other benefits any Guarantor may have
by reason of any failure of any Beneficiary to hold a commercially reasonable
public or private foreclosure sale or otherwise to comply with applicable law in
connection with a disposition of the Collateral; and
2.5.9. without limiting the generality of the foregoing or any other
provision hereof, all rights and benefits under California Civil Code Sections
2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 or any similar
provisions of applicable law.
Section 2.6. Subrogation; Certain Agreements.
2.6.1 EACH GUARANTOR WAIVES ANY AND ALL RIGHTS OF SUBROGATION,
INDEMNITY, CONTRIBUTION OR REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS
TO ENFORCE ANY POWER, RIGHT OR REMEDY THAT ANY BENEFICIARY MAY NOW OR HEREAFTER
HAVE IN RESPECT OF THE OBLIGATIONS AGAINST ANY BORROWER OR ANY OTHER OBLIGOR,
ANY AND ALL BENEFITS OF AND RIGHTS TO PARTICIPATE IN ANY COLLATERAL, WHETHER
REAL OR PERSONAL PROPERTY, NOW OR HEREAFTER HELD BY ANY BENEFICIARY, AND ANY AND
ALL OTHER RIGHTS AND CLAIMS (AS DEFINED IN THE BANKRUPTCY CODE) ANY GUARANTOR
MAY HAVE AGAINST ANY BORROWER OR ANY OTHER OBLIGOR, UNDER APPLICABLE LAW OR
OTHERWISE, AT LAW OR IN EQUITY, BY REASON OF ANY PAYMENT HEREUNDER, UNLESS AND
UNTIL THE OBLIGATIONS SHALL HAVE BEEN PAID IN FULL. Without limitation, the
Guarantors shall exercise no voting rights, shall file no claim, and shall not
participate or appear in any bankruptcy or insolvency case involving any
Borrower with respect to the Obligations unless and until all the Obligations
shall have been paid in full. If, notwithstanding the foregoing, any amount
shall be paid to any Guarantor on account of any such rights at any time, such
amount shall be held in trust for the benefit of the Beneficiaries and shall
forthwith be paid to the Security Trustee to be held as Collateral or credited
and applied in accordance with the terms of the Inter-Creditor Agreement and the
other Financing Documents upon the Obligations, whether matured, unmatured,
absolute or contingent, in the discretion of the Security Trustee.
2.6.2. Each Guarantor assumes the responsibility for being and keeping
itself informed of the financial condition of each Borrower and each other
Obligor and of all other circumstances bearing upon the risk of nonpayment of
the Obligations that
Guaranty
8
diligent inquiry would reveal, and agrees that the Beneficiaries shall have no
duty to advise any Guarantor of information regarding such condition or any such
circumstances.
Section 2.7. Bankruptcy No Discharge.
2.7.1. Without limiting Section 2.3., this Guaranty shall not be
discharged or otherwise affected by any bankruptcy, reorganization or similar
proceeding commenced by or against any Borrower or any other Obligor, including
(i) any discharge of, or bar or stay against collecting, all or any part of the
Obligations in or as a result of any such proceeding, whether or not assented to
by any Beneficiary, (ii) any disallowance of all or any portion of any
Beneficiary's claim for repayment of the Obligations, (iii) any use of cash or
other collateral in any such proceeding, (iv) any agreement or stipulation as to
adequate protection in any such proceeding, (v) any failure by any Beneficiary
to file or enforce a claim against any Borrower or any other Obligor or its
estate in any bankruptcy or reorganization case, (vi) any amendment,
modification, stay or cure of any Beneficiary's rights that may occur in any
such proceeding, (vii) any election by any Beneficiary under Section 1111(b)(2)
of the Bankruptcy Code, or (viii) any borrowing or grant of a Lien under Section
364 of the Bankruptcy Code. Each Guarantor understands and acknowledges that by
virtue of this Guaranty, it has specifically assumed any and all risks of any
such proceeding with respect to each Borrower and each other Obligor.
2.7.2. Notwithstanding anything to the contrary herein contained, this
Guaranty (and any Lien on the Collateral securing this Guaranty or the
Obligations) shall continue to be effective or be reinstated, as the case may
be, if at any time any payment, or any part thereof, of any or all of the
Obligations is rescinded, invalidated, declared to be fraudulent or preferential
or otherwise required to be restored or returned by any Beneficiary in
connection with any bankruptcy, reorganization or similar proceeding involving
any Borrower, any other Obligor or otherwise, if the proceeds of any Collateral
are required to be returned by such Beneficiary under any such circumstances, or
if any Beneficiary elects to return any such payment or proceeds or any part
thereof in its sole discretion, all as though such payment had not been made or
such proceeds not been received. Without limiting the generality of the
foregoing, if prior to any such rescission, invalidation, declaration,
restoration or return, this Guaranty shall have been canceled or surrendered (or
if any Lien or Collateral shall have been released or terminated in connection
with such cancellation or surrender), this Guaranty (and such Lien and
Collateral) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, discharge or otherwise affect the
obligations of the Guarantors in respect of the amount of the affected payment
or application of proceeds (or such Lien or Collateral).
Section 2.8. Subordination.
2.8.1. Each Guarantor hereby absolutely subordinates, both in right of
payment and in time of payment, any and all present or future obligations and
liabilities
Guaranty
9
of any Borrower and each other Obligor to such Guarantor ("Subordinated Debt"),
to the prior payment in full in cash of the Obligations, whether or not such
Subordinated Debt constitutes or arises out of any subrogation, reimbursement,
contribution, indemnity or similar right attributable to this Guaranty. If,
whether or not at any Beneficiary's request, any Guarantor shall receive, prior
to payment in full in cash of all Obligations, payment of any sum from any
Borrower or any other Obligor upon any Subordinated Debt, any such sum shall be
received by such Guarantor as trustee for the Beneficiaries and shall forthwith
be paid over to the Security Trustee on account of the Obligations, without
reducing or affecting in any manner the liability of any Guarantor under this
Guaranty.
2.8.2. Each Guarantor shall file in any bankruptcy or reorganization
or similar proceeding in which the filing of claims is required by applicable
law, all claims that such Guarantor may have against any Borrower or other
Obligor (or its nominee) relating to any Subordinated Debt. If the Guarantor
does not file any such claim, the Security Trustee (or its nominee) as
attorney-in-fact for the Guarantor is hereby authorized to do so in the name of
such Guarantor. Each Guarantor agrees that, in connection with any such
proceeding, it shall not contest or oppose the treatment of claims of the
Beneficiaries in any plan of reorganization or otherwise and it shall vote any
claims that exist by virtue of this Guaranty or the Subordinated Debt in
connection with any plans of reorganization or otherwise, as may be requested by
the Security Trustee.
2.8.3. Each Guarantor hereby grants the Security Trustee a power of
attorney for the purposes set forth in this Section 2.8. Such power of attorney
is coupled with an interest and cannot be revoked.
Section 2.9. Maximum Liability of Guarantors. The obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any applicable provisions of
comparable state law.
Section 2.10. Right of Contribution. In order to provide for just and
equitable contribution among the Guarantors and any Other Guarantors (for
purposes of this Section only, each Guarantor and each Other Guarantor is
referred to as a "Guarantor"), in connection with the execution of this
Guaranty, the Guarantors have agreed among themselves that if any Guarantor
satisfies some or all of the Obligations (a "Funding Guarantor"), the Funding
Guarantor shall be entitled to contribution from the other Guarantors that have
positive Maximum Net Worth (as defined below) for all payments made by the
Funding Guarantor in satisfying the Obligations, so that each Guarantor that
remains obligated under this Guaranty or any Other Guaranty at the time
that a Funding Guarantor makes such payment (a "Remaining Guarantor") and has a
positive Maximum Net Worth shall bear a portion of such payment equal to the
percentage that such Remaining Guarantor's Maximum Net Worth bears to the
aggregate Maximum Net Worth of all Remaining Guarantors that have positive
Maximum Net Worth.
Guaranty
10
As used herein, "Net Worth" means, with respect to any Guarantor, the
amount, as of the respective date of calculation, by which the sum of a Person's
assets (including subrogation, indemnity, contribution, reimbursement and
similar rights that the Guarantor may have), determined on the basis of a "fair
valuation" or their "fair saleable value" (whichever is the applicable test
under Section 548 and other relevant provisions of the Bankruptcy Code and the
relevant state fraudulent conveyance or transfer laws), is greater than the
amount that will be required to pay all of such Person's debts, in each case
matured or unmatured, contingent or otherwise, as of the date of calculation,
but excluding liabilities arising under this Guaranty or any Other Guaranty and
excluding, to the maximum extent permitted by applicable law with the objective
of avoiding rendering such Person insolvent, liabilities subordinated to the
Obligations arising out of loans or advances made to such Person by any other
Person. "Maximum Net Worth" means, with respect to any Guarantor, the greatest
of the Net Worth of such Guarantor calculated as of the following dates: (A) the
date on which such Person becomes a Guarantor, (B) the date on which such
Guarantor expressly reaffirms this Guaranty or the Other Guaranty to which it
is a party, (C) the date on which demand for payment is made on such Guarantor
hereunder or under such Other Guaranty, (D) the date on which payment is made by
such Guarantor hereunder or thereunder or (E) the date on which any judgment,
order or decree is entered requiring such Guarantor to make payment hereunder or
in respect hereof or under or in respect of such Other Guaranty. The meaning of
the terms "fair valuation" and "fair saleable value" and the calculation of
assets and liabilities shall be determined and made in accordance with the
relevant provisions of the Bankruptcy Code and applicable state fraudulent
conveyance or transfer laws.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Each Guarantor represents and warrants that all representations and
warranties made with respect to it, its assets and its obligations in Section
13.2 of the Credit Agreement are true and correct and makes the following
additional representations and warranties, all of which shall survive until
termination of this Guaranty pursuant to Section 2.2.
Section 3.1. Financial Benefit. Each Guarantor hereby acknowledges and
warrants it has derived or expects to derive a financial advantage from each
loan or other extension of credit and each renewal, extension, release of
Collateral, or other relinquishment of legal rights, made or granted or to be
made or granted by the Beneficiaries in connection with the Obligations. After
giving effect to this Guaranty and the other Financing Documents to which any
Guarantor is a party, and the transactions contemplated hereby and thereby, each
Guarantor is not Insolvent or left with assets or capital that is unreasonably
small in relation to its business or the Obligations. "Insolvent" means, with
respect to any Guarantor, that (a) determined on the basis of a "fair valuation"
or their "fair saleable value" (whichever is the applicable test under
Guaranty
11
Section 548 and other relevant provisions of the Bankruptcy Code and the
relevant state fraudulent conveyance or transfer laws) the sum of such
Guarantor's assets is less than its debts, or (b) such Guarantor is generally
not paying its debts as they become due.
Section 3.2. Review of Documents; Understanding With Respect to
Waivers. Each Guarantor hereby acknowledges that it has copies of and is fully
familiar with the Credit Agreement, the U.S. Loan Notes and each other Financing
Document. Each Guarantor warrants and agrees that each waiver set forth in this
Guaranty is made with such Guarantor's full knowledge of its significance and
consequences and after opportunity to consult with counsel of its own choosing
and that, under the circumstances, each such waiver is reasonable and should not
be found contrary to public policy or law.
ARTICLE 4.
MISCELLANEOUS
Section 4.1. Expenses. Each Guarantor shall pay to the Security
Trustee any and all costs and expenses, (including attorneys' fees and
expenses), that any Beneficiary may incur in connection with (a) the collection
of all sums guaranteed hereunder or (b) the exercise or enforcement of any of
the rights, powers or remedies of the Beneficiaries under this Guaranty or
applicable law. All such amounts and all other amounts payable hereunder shall
be payable on demand, together with interest at the Default Rate, from and
including the due date to and excluding the date of payment.
Section 4.2. Amendments and Other Modifications. No amendment of any
provision of this Guaranty (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
the Security Trustee. Any waiver or consent relating to any provision of this
Guaranty shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand in similar
or other circumstances.
Section 4.3. Cumulative Remedies; Failure or Delay. The rights and
remedies provided for under this Guaranty are cumulative and are not exclusive
of any rights and remedies that may be available to the Beneficiaries under
applicable law or otherwise. No failure or delay on the part of any Beneficiary
in the exercise of any power, right or remedy under this Guaranty shall impair
such power, right or remedy or shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude other or
further exercise of such or any other power, right or remedy.
Section 4.4. Notices, Etc. All notices and other communications under
this Guaranty shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by prepaid telex,
Guaranty
12
telecopy or telegram, and shall be deemed given when received by the intended
recipient thereof. Unless otherwise specified in a notice given in accordance
with the foregoing provisions of this Section, all notices and other
communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated on
Schedule 4.4.
Section 4.5. Successors and Assigns. This Guaranty and each amendment
hereof shall be binding upon and, subject to the next sentence, inure to the
benefit of each Guarantor, the Beneficiaries and their respective successors and
assigns. The Guarantor shall not assign any of its rights or obligations
hereunder without the prior written consent of the Security Trustee. The benefit
of this Guaranty shall automatically pass with any assignment of the Obligations
(or any portion thereof), to the extent of such assignment.
Section 4.6. Choice of Forum.
4.6.1. Each of the Guarantors irrevocably agrees for the benefit of
each of the Beneficiaries that the courts of England shall have jurisdiction to
hear and determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Guaranty (and the other
Financing Documents) and, for such purposes, irrevocably submits to the
jurisdiction of such courts. Each of the Guarantors irrevocably agrees that the
courts of the State of New York and the courts of the United States of America
in New York shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Guaranty (and the other Financing Documents) and, for such purposes,
irrevocably submits to the jurisdiction of such courts. Each of the Guarantors
irrevocably waives any objection which it might now or hereafter have to the
courts referred to in this Section 4.6.1 being nominated as the forum to hear
and determine any suit, action or proceeding, and to settle any disputes, which
may arise out of or in connection with this Guaranty and the Financing Documents
and agrees not to claim that any such court is not a convenient or appropriate
forum.
IN ANY ACTION AGAINST ANY GUARANTOR, SERVICE OF PROCESS MAY BE MADE
UPON SUCH GUARANTOR BY DELIVERY OR BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SCHEDULE 4.4., WHICH SERVICE
SHALL BE DEEMED SUFFICIENT FOR PERSONAL JURISDICTION AND SHALL BE DEEMED
EFFECTIVE UPON RECEIPT, IN THE CASE OF DELIVERY, AND 10 DAYS AFTER MAILING, IN
THE CASE OF MAILING. Each Guarantor hereby irrevocably appoints CT Corporation
Systems (the "Process Agent"), with offices on the date hereof in New York, New
York, as Process Agent to receive for and on behalf of such Guarantor service of
process in the County of New York relating to this Agreement. SERVICE OF PROCESS
IN ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR MAY BE MADE ON THE PROCESS
AGENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER
Guaranty
13
METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE OF
NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO ACCEPT SUCH
SERVICE FOR AND ON BEHALF OF SUCH GUARANTOR AND TO ADMIT SERVICE WITH RESPECT
THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE PERSONAL
SERVICE ON SUCH GUARANTOR, SUFFICIENT FOR PERSONAL JURISDICTION, 10 DAYS AFTER
MAILING, AND SHALL BE LEGAL AND BINDING UPON SUCH GUARANTOR FOR ALL PURPOSES,
NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF SUCH LEGAL
PROCESS TO SUCH GUARANTOR, OR ANY FAILURE ON THE PART OF SUCH GUARANTOR TO
RECEIVE THE SAME. Each Guarantor confirms that it has instructed the Process
Agent to mail to such Guarantor, upon service of process being made on the
Process Agent pursuant to this Section, a copy of the summons and complaint or
other legal process served upon it, by registered mail, return receipt
requested, at such Guarantor's address set forth in Schedule 4.4., or to such
other address as such Guarantor may notify the Process Agent in writing. Each
Guarantor agrees that it will at all times maintain a process agent to receive
service of process in the County of New York on its behalf with respect to this
Agreement. If for any reason the Process Agent or any successor thereto shall no
longer serve as such process agent or shall have changed its address without
notification thereof to the Beneficiaries, such Guarantor, immediately after
gaining knowledge thereof, irrevocably shall appoint a substitute process agent
acceptable to the Security Trustee in the County of New York and advise the
Security Trustee thereof.
4.6.2. The submission to the jurisdiction of the courts referred to in
Section 4.6.1 shall not (and shall not be construed as to) limit the right of
the Beneficiaries or any of them to take proceedings against any of the
Guarantors in any other court of competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
Section 4.7. Set-Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuation of any Default, each
Beneficiary, each holder or transferee of any Obligations or any Person with any
interest therein is hereby irrevocably authorized by each Guarantor, at any time
or from time to time, without notice to such Guarantor or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other indebtedness, in each case whether direct or indirect or contingent or
matured or unmatured at any time held or owing by such Beneficiary, such holder,
such transferee or such other Person, to or for the credit or the account of
such Guarantor, against and on account of the obligations of such Guarantor to
the Beneficiaries, such holder, such transferee, or such other Person under this
Guaranty or the other Financing Documents to which such Guarantor is a party,
irrespective of whether or not such Beneficiary, such
Guaranty
14
holder, such transferee or such other Person shall have made any demand for
payment and although such obligations may be contingent and unmatured.
Section 4.8. Currency of Obligations and Payments. The dollar is the
currency of account and payment for each and every sum at any time due from the
Guarantors hereunder; provided that any amount of Obligations expressed to be
payable in a currency other than dollars shall be paid in that other currency.
If any sum due from any Guarantor under this Guaranty (or any sum due from any
Borrower under any Financing Document in respect of which any Guarantor is
obligated hereunder) or any order or judgment given or made in relation thereto
has to be converted from the currency (the "first currency") in which the same
is payable thereunder or under such order or judgment into another currency (the
"second currency") for the purpose of (i) making or filing a claim or proof
against such Guarantor, (ii) obtaining an order or judgment in any court or
other tribunal or (iii) enforcing any order or judgment given or made in
relation hereto, the Guarantors shall indemnify and hold harmless the
Beneficiaries from and against any loss suffered as a result of any discrepancy
between (a) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (b) the rate or
rates of exchange at which such person may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum paid
to in satisfaction, in whole or in part, of any such order, judgment, claim or
proof.
Section 4.9. Application of Payments and Collections. In the case of
any payments by or collection from any Guarantor hereunder, the proceeds of such
payment or collection shall be applied in the manner set forth in Clause 5 of
the Inter-Creditor Agreement.
Section 4.10. Execution in Counterparts. This Guaranty may be executed
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Guaranty.
Section 4.11. Complete Agreement. This Guaranty, together with the
exhibits and schedules hereto and other Financing Documents, is intended by the
parties as the final expression of their agreement regarding the subject matter
hereof and as a complete and exclusive statement of the terms and conditions of
such agreement.
Section 4.12. Limitation of Liability. No claim shall be made by any
Guarantor against any Beneficiary or the affiliates, directors, officers,
employees or agents of any Beneficiary for any special, indirect, consequential
or punitive damages in respect of any claim for breach of contract or under any
other theory of liability arising out of or related to the transactions
contemplated by this Guaranty, or any act, omission or event occurring in
connection therewith; and each Guarantor waives, releases and agrees not to sue
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
Guaranty
15
Section 4.13. WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND THE
BENEFICIARIES (BY ACCEPTANCE HEREOF) WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION UNDER THIS GUARANTY OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
Guaranty
16
IN WITNESS WHEREOF, the parties hereto have duly executed this
Guaranty as of the date set forth above.
GUARANTORS
AUTOMATED SECURITY
CORPORATION, a Delaware
corporation
By:/s/ Peter Bertram
--------------------------------
Name: PETER BERTRAM
Title: Director
SONITROL MANAGEMENT
CORPORATION, a Delaware
corporation
By:/s/ Peter Bertram
--------------------------------
Name: PETER BERTRAM
Title: Director
SONITROL MANAGEMENT
CORPORATION, a Delaware
corporation
By:/s/ Peter Bertram
--------------------------------
Name: PETER BERTRAM
Title: Director
AUTOMATED SECURITY
HOLDINGS INC., a Delaware
corporation
By:/s/ Peter Bertram
--------------------------------
Name: PETER BERTRAM
Title: Director
Guaranty
17
Agreed and accepted on behalf of
the Beneficiaries by:
LLOYDS BANK Plc
By:/s/ L.H. Tinsley
--------------------------------
Name: L.H. TINSLEY
Address: St. Georges House
6-8, Eastcherp, EC3
Guaranty
18
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 21, 1995 (as amended from time
to time, the "Agreement"), by and among Automated Loss Prevention Systems
Limited, a company incorporated in England and Wales ("ALPSL"), Automated
Security Corporation, a Delaware corporation ("ASC") and Automated Security
Holdings Inc., a Delaware corporation ("ASHI" and together with ALPSL and ASC
each individually a "Pledgor" and collectively the "Pledgors") and Lloyds Bank
Plc, as security trustee (in such capacity, the "Security Trustee") for the
banks, the agent, the working capital lender and the other lenders that either
now or in the future are parties to the Credit Agreement referred to below
(collectively, the "Banks") and the holders of the US Loan Notes referred to
below pursuant to the terms of the Inter-Creditor Agreement referred to below
(collectively, the "U.S. Loan Note Holders"). The Banks, the U.S. Loan Note
Holders and the Security Trustee are collectively referred to herein as the
"Secured Parties."
R E C I T A L S
A. Pursuant to a Credit Agreement dated as of December 21, 1995 (as
amended from time to time, the "Credit Agreement") by and among Automated
Security (Holdings) PLC, a company incorporated under the laws of England and
Wales ("Holdings"), the Companies listed in Part A of Schedule 5 of the Credit
Agreement (collectively with Holdings, the "Borrowers") and the Banks, the Banks
have agreed to make certain U.S. Dollar-denominated and Sterling-denominated
credit facilities available to the Borrowers, subject to the terms and
conditions set forth therein.
B. The U.S. Loan Note Holders are the holders of certain 8.28% senior
notes (as amended from time to time, the "U.S. Loan Notes") issued by Holdings
pursuant to a note agreement dated 27th May 1994 with The Prudential Insurance
Company of America as amended by a First Amendment dated on or about the date
hereof made between the same parties (as so amended and as otherwise amended
from time to time the "U.S. Loan Note Agreement").
C. Pursuant to an Inter-Creditor Agreement dated December 21, 1995 (as
amended from time to time, the "Inter-Creditor Agreement") by and among
Holdings, the Security Trustee, the Banks and the U.S. Loan Note Holders, the
Beneficiaries have appointed the Security Trustee to act as its agent and
trustee in connection with this Agreement.
D. Each Pledgor is a direct or indirect Subsidiary of Holdings.
E. ALPSL is one of the Borrower under the Credit Agreement.
F. Pursuant to a Joint and Several General Continuing Guaranty, dated
as of December 21, 1995 (as amended from time to time, the "Guaranty") by ASC,
ASHI and other Guarantors thereunder in favor of the Secured Parties, ASC and
ASHI have jointly and severally agreed to guaranty the obligations of the
Borrowers under
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the Credit Agreement and the obligations of Holdings under the U.S. Loan Notes
and the U.S. Loan Note Agreement.
G. The Pledgors are the owners of certain shares of capital stock of
certain indirect Subsidiaries of Holdings, as described on Schedule A (the
"Pledged Stock"). It is a condition to the extension of the foregoing credit
facilities that the Pledged Stock be pledged to the Secured Parties as set forth
herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1. Definitions.
The following terms with initial capital letters have the following
meanings:
"Acceleration" is defined in Section 5.1.
"Agreement" is defined in the Preamble.
"Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, judgments and decrees of any Governmental Authority.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time, or any successor statute.
"Banks" is defined in the Preamble.
"Borrowers" is defined in the Recitals.
"Charges" means all federal, state, country, city, municipal or other
taxes, levies, assessments or charges that, if not paid when due, may result in
a Lien of any Governmental Authority against Collateral.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in the Recitals.
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"Default" shall mean any Default as defined in the Inter-Creditor
Agreement, including any Default (as defined in the Credit Agreement) or any
Event of Default (as defined in the U.S. Loan Note Agreement).
"Default Occurrence" means any Default Occurrence (as defined in the
Credit Agreement) or any other event or condition that, with the giving of
notice or lapse of time, or both, would, unless cured or waived, become a
Default.
"Default Rate" means the lesser of (i) the rate per annum calculated
in the manner set forth in Clause 8.3 of the Credit Agreement (provided that
determinations therein specified to be made by the Agent shall be made for
purposes hereof by the Security Trustee) and (ii) the maximum rate allowed by
applicable law.
"Financing Documents" means the Credit Agreement, the U.S. Loan Notes,
the U.S. Loan Note Agreement, the Inter-Creditor Agreement and all other
Financing Documents (as defined in the Credit Agreement) and Financing
Agreements (as defined in the Inter-Creditor Agreement).
"Governmental Approval" means any authorization, approval, permit or
license of or by or filing with any Governmental Authority.
"Governmental Approval" means any nation, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of government, including any tribunal or
arbitrator(s) of competent jurisdiction.
"Guaranty" is defined in the Recitals.
"Holdings" is defined in the Recitals.
"Inter-Creditor Agreement" is defined in the Recitals.
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any of the foregoing.
"Material Adverse Effect" shall have the meaning set forth in the
Credit Agreement and "Material Adverse Change" means a change that has had or
will have a Material Adverse Effect.
"Person" means an individual, a corporation, a partnership, a trust,
an unincorporated organization or any other entity or organization, including a
Governmental Authority.
"Pledged Collateral" is defined in Section 4.1.
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"Pledged Stock" is defined in the Recitals.
"Pledgor" and "Pledgors" are defined in the Preamble.
"Proceeds" is defined in Section 2.1.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" is defined in the Preamble.
"Securities Act" is defined in Section 4.8.
"Security Interest" is defined in Section 2.1.
"Security Trustee" is defined in the Preamble.
"UCC" means the Uniform Commercial Code (as amended from time to time)
of the State of New York.
"U.S. Loan Note Agreement" is defined in the Recitals.
"U.S. Loan Note Holders" is defined in the Preamble.
"U.S. Loan Notes" is defined in the Recitals.
Section 1.2. Related Matters.
1.2.1. Terms Used in the UCC. Unless the context clearly otherwise
requires, all lower-case terms used and not otherwise defined herein that are
used or defined in Article 9 or 8 (or any equivalent subpart) of the UCC have
the same meanings herein.
1.2.2. Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, and "including" is not
limiting. The words "hereof," "herein," "hereby," "hereunder" and similar terms
in this Agreement refer to this Agreement as a whole (including the Preamble,
the Recitals and all Schedules and Exhibits) and not to any particular provision
of this Agreement. Article, section, subsection, exhibit, recital, preamble and
schedule references in this Agreement are to this Agreement unless otherwise
specified. References in this Agreement to any agreement, other document or law
"as amended" or "as amended from time to time," or to amendments of any document
or law, shall include any amendments, supplements, replacements, renewals,
waivers or other modifications not prohibited by the Financing Documents.
References in this Agreement to any law (or any part thereof) include any rules
and regulations promulgated thereunder (or with respect to such part) by the
relevant Governmental Authority, as amended from time to time.
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1.2.3. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, (other than
choice of law rules that would require the application of the laws of any other
jurisdiction).
1.2.4. Headings. The Article and Section Headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
1.2.5. Severability. If any provision of this Agreement or any Lien or
other right hereunder shall be held to be invalid, illegal or unenforceable
under Applicable Law in any jurisdiction, such provision, Lien or other right
shall be ineffective only to the extent of such invalidity, illegality or
unenforceability, which shall not affect any other provisions herein or any
other Lien or right granted hereby or the validity, legality or enforceability
of such provision, Lien or right in any other jurisdiction.
ARTICLE 2.
THE SECURITY INTEREST; SECURED OBLIGATIONS
Section 2.1. Security Interest. To secure the payment and performance
of the Secured Obligations as and when due, each Pledgor hereby conveys,
pledges, assigns and transfers to the Security Trustee, and grants to the
Security Trustee, as trustee and representative for the equal and ratable
benefit of the Secured Parties, a security interest (the "Security Interest")
in, all right, title, claim and interest of such Pledgor in and to the following
property, whether now owned and existing or hereafter acquired or arising, and
wherever located (such property being, collectively, the "Collateral"):
2.1.1. The Pledged Stock and all certificates and instruments
representing or evidencing the Pledged Stock;
2.1.2. Any and all securities issued by any issuer of any Pledged
Stock, or any successor thereto, that any Pledgor acquires or has the right to
acquire from time to time in any manner in substitution for or in addition to
any of the foregoing and any and all certificates and instruments representing
or evidencing such securities;
2.1.3. Any and all proceeds and products of any of the foregoing,
whether now held and existing or hereafter acquired or arising, including any
and all cash, securities, instruments and other property from time to time paid,
payable or otherwise distributed in respect of or in exchange for any or all of
the foregoing (collectively, the "Proceeds"). "Proceeds" shall include (i) any
options, warrants, securities or other property issued or delivered by the
issuer of or obligor on any Collateral as a stock dividend or distribution in
connection with any reclassification, increase or reduction of capital or issued
or delivered in connection with any merger or
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other reorganization and (ii) any property received upon the liquidation or
dissolution of any issuer of or obligor on any Collateral or upon or in respect
of any distribution of capital.
Section 2.2. Secured Obligations. The Security Interest shall secure
for the equal and ratable benefit of the Secured Parties, the due and punctual
payment and performance of any and all present and future obligations and
liabilities of each Pledgor of every type or description to any Secured Party,
or any of its successors or assigns, or any Person entitled to indemnification
under the Credit Agreement, the U.S. Loan Notes, the U.S. Loan Note Agreement,
the Guaranty or the other Financing Documents,
(a) arising under or in connection with the Credit Agreement, the U.S.
Loan Notes, the U.S. Loan Note Agreement, the Guaranty or the other Financing
Documents, whether for principal, interest, letter of credit or other
reimbursement obligations, cash collateral cover, fees, expenses, indemnities or
other amounts (including attorney's fees and expenses); or
(b) arising under or in connection with this Agreement or any other
Financing Document, including for reimbursement of amounts that may be advanced
or expended by the Security Trustee (i) to satisfy amounts required to be paid
by any Pledgor under this Agreement or any other Financing Document for claims
and Charges, together with interest thereon to the extent provided, or (ii) to
maintain or preserve any Collateral or to create, perfect, continue or protect
any Collateral or the Security Interest therein, or its priority;
in each case whether due or not due, direct or indirect, joint and/or several,
absolute or contingent, voluntary or involuntary, liquidated or unliquidated,
determined or undetermined, now or hereafter existing, renewed or restructured,
whether or not from time to time decreased or extinguished and later increased,
created or incurred, whether or not arising after the commencement of a
proceeding under the Bankruptcy Code (including post-petition interest) and
whether or not allowed or allowable as a claim in any such proceeding, and
whether or not recovery of any such obligation or liability may be barred by a
statute of limitations or such obligation or liability may otherwise be
unenforceable (all obligations and liabilities described in this Section 2.2 are
collectively referred to as the "Secured Obligations").
ARTICLE 3.
WARRANTIES AND REPRESENTATIONS
Each Pledgor represents and warrants that all representations and
warranties made with respect to it, its assets and its obligations in Section
13.2 of the Credit Agreement are true and correct and makes the following
additional representations and warranties, all of which shall survive until
termination of this Agreement pursuant to Section 6.7.
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Section 3.1. Authorization, Binding Effect, No Conflict, Etc.
3.1.1. The execution, delivery and performance by each Pledgor of this
Agreement and each other Financing Documents to which it is a party have been
duly authorized by all necessary corporate action. This Agreement and each such
other Financing Documents has been duly executed and delivered by each Pledgor
party thereto and such agreements are the legal, valid and binding obligations
of such Pledgor, enforceable against it in accordance with their respective
terms, except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
creditors' rights generally. The execution, delivery and performance by any
Pledgor of this Agreement and each other Financing Document to which such
Pledgor is a party, the consummation of the transactions contemplated hereby or
thereby, or the exercise by the Security Trustee of any of the voting and other
rights or remedies hereunder, do not and will not (a) violate any provision of
the charter or bylaws of such Pledgor, (b) conflict with, result in a breach of
or constitute (or, with the giving of notice or lapse of time or both,
constitute) a default under, or require the approval or consent of any Person
pursuant to, any contractual obligation of such Pledgor or violate any provision
of Applicable Law binding on such Pledgor, or (c) result in the creation or
imposition of any Lien of any nature whatsoever upon any of such Pledgor's
assets except for Liens created under this Agreement and the other Financing
Documents. Except for filings and recordings in connection with the perfection
of Liens created by the Financing Documents, all of which have been made and are
in full force and effect, no Governmental Approval is or will be required in
connection with the execution, delivery and performance by any Pledgor of this
Agreement or any other Financing Documents to which any Pledgor is a party, the
consummation of the transactions contemplated hereby or thereby, or the exercise
by the Security Trustee of any of the voting and other rights or remedies
hereunder, or to ensure the legality, validity or enforceability hereof or
thereof, except as may be required in connection with the disposition of
Collateral by laws affecting the offering and sale of securities generally.
Section 3.2. Title to Collateral: Validity and Perfection of Security
Interest; Absence of Other Liens.
3.2.1. Each Pledgor has good and marketable title to all Collateral.
The Security Interest constitutes a valid and, upon delivery of all Pledged
Collateral to the Secured Party pursuant to Section 4.1. hereof, perfected Lien
in all of the Collateral and secures payment and performance of the Secured
Obligations.
3.2.2. The Collateral is free and clear of all Liens other than the
Security Interest and other Liens in favor of Security Trustee.
Section 3.3. Regarding the Pledged Stock. Schedule 3.3. sets forth the
number of authorized and the number of issued shares of each class of capital
stock of each issuer of Pledged Stock. All outstanding capital stock of each
such issuer has been duly authorized, validly issued and is fully paid and
non-assessable. There are no
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outstanding options, warrants, convertible securities or other rights,
contingent or absolute, to acquire any capital stock of any such issuer.
ARTICLE 4.
COVENANTS AND AGREEMENTS
Section 4.1. Delivery of Pledged Collateral, Etc.
4.1.1. On the date hereof, each Pledgor is delivering to the Security
Trustee all Collateral consisting of certificated securities, instruments or the
like the physical possession of which is necessary in order for the Security
Interest to be perfected or delivery of which was requested by the Security
Trustee to assure the priority of the Security Interest therein (such Collateral
being "Pledged Collateral"). Each Pledgor shall deliver to the Security Trustee
promptly after acquisition thereof all Pledged Collateral acquired after the
date hereof. All Pledged Collateral shall be in suitable form for transfer by
delivery, or be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Security
Trustee. The Security Trustee shall have the right, at any time in its
discretion and without notice to any Pledgor, to transfer to or to register in
the name of the Security Trustee or its nominee any or all of the Collateral,
subject only to the revocable rights specified in Section 4.7.1. In addition,
the Security Trustee shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
4.1.2. Without limitation of Section 4.1.1., if any Pledgor receives
or becomes entitled to receive any securities issues by any issuer of Pledged
Stock, or any successor thereto, in any manner in substitution for or in
addition to the Pledged Stock, or if any Pledgor shall become entitled to
receive or shall receive any securities or other property in addition to, in
substitution of, as a conversion of, or in exchange for, any of the Pledged
Stock or any other Collateral, such Pledgor shall receive the same as the agent
for the Security Trustee, and shall hold the same in trust for and deliver the
same promptly to the Security Trustee in the exact form in which received,
together with appropriate instruments of transfer or assignments in blank, to be
held by the Security Trustee as Collateral hereunder.
Section 4.2. Further Assurances. Each Pledgor shall, at its own
expense, perform on request of the Security Trustee, such acts as may be
necessary or advisable in the opinion of the Security Trustee, or that the
Security Trustee may request at any time, to assure the attachment, perfection
and first priority of the Security Interest, to exercise the rights and remedies
of the Secured Parties hereunder or to carry out the intent of this Agreement.
Section 4.3. Power of Attorney. Each Pledgor hereby irrevocably
appoints the Security Trustee and its employees and agents as such Pledgor's
true and lawful attorneys-in-fact, with full power of substitution, to do (a)
all things required to be
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done by such Pledgor under this Agreement or the other Financing Documents, and
(b) to do all things that the Security Trustee may deem necessary or advisable
to assure the attachment, perfection and first priority of the Security Interest
or otherwise to exercise the rights and remedies of the Secured Parties
hereunder or carry out the intent of this Agreement, in each case irrespective
of whether a Default or Default Occurrence then exists (except as otherwise
provided herein) and at the Pledgor's expense. Without limitation, the Security
Trustee and its officers and agents shall be entitled to affix, by facsimile
signature or otherwise, the general or special endorsement of any Pledgor, in
such manner as the Security Trustee shall deem advisable, to any Collateral that
has been delivered to or obtained by the Security Trustee without appropriate
endorsement or assignment, which endorsement shall be effective for all
purposes.
Section 4.4. Payments of Charges and Claims. Each Pledgor shall pay
(a) all Charges imposed upon any Collateral, and (b) all claims that have become
due and payable and, under Applicable Law, have or may become Liens upon any
Collateral, in each case before any penalty shall be incurred with respect
thereto; provided that, unless foreclosure, levy or similar proceedings shall
have commenced, such Pledgor need not pay or discharge any such Charges to
claims so long as the validity or amount thereof is being contested in good
faith and by appropriate proceedings and so long as adequate reserves therefore
have been established in accordance with generally accepted accounting
principles. If any Pledgor fails to pay or obtain the discharge of any Charge,
claim or Lien required to be paid or discharged under this Section and asserted
against any material portion of the Collateral, the Security Trustee may, at any
time and from time to time, in its sole discretion and without waiving or
releasing any obligation of such Pledgor under this Agreement or the other
Financing Documents or waiving any Default or Event of Default, make such
payment, obtain such discharge or take such other action with respect thereto as
the Security Trustee deems advisable; provided, however, that the Security
Trustee shall in any event first have given such Pledgor written notice of its
intent to do the same and such Pledgor shall not have, within 15 days of such
notice, paid such claim or obtained to the Security Trustee's satisfaction the
release of the claim or Lien to which such notice relates.
Section 4.5. Duty of Care.
4.5.1 The Secured Parties shall have no duty of care with respect to
the Collateral, except that each Secured Party shall have an obligation to
exercise reasonable care with respect to Collateral in its possession; provided
that (i) each Secured Party shall be deemed to have exercised reasonable care if
Collateral in its possession is accorded treatment substantially comparable to
that which such Secured Party accords its own property or treatment
substantially in accordance with actions requested by any Pledgor in writing,
although the Secured Party shall not be obligated to comply with any such
requests, and (ii) the Secured Parties shall have no obligation to take any
actions to preserve rights against other parties with respect to any Collateral.
Without limitation, the Secured Parties shall have no duty with respect to
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calls, conversions, presentments, maturities, notices or other matters relating
to Collateral, or to maximize interest or other returns with respect thereto.
4.5.2 Each Pledgor hereby agrees to indemnify and hold harmless each
Secured Party and its directors, officers, employees and agents against any and
all claims, actions, liabilities, costs and expenses of any kind or nature
whatsoever (including reasonable fees and disbursements of counsel) that may be
imposed on, incurred by, or asserted against any of them, in any way relating to
or arising out of this Agreement or any action taken or omitted by them
hereunder, except to the extent a court holds in a final and nonappealable
judgment that they directly resulted from the gross negligence or willful
misconduct of such Persons against and from all such obligations and
liabilities.
4.5.3 The Security Trustee may at any time deliver or redeliver the
Collateral or any part thereof to any Pledgor and the receipt of any of the same
by such Pledgor shall be complete and full acquittance for the Collateral so
delivered, and the Security Trustee thereafter shall be discharged from any
liability or responsibility therefor.
Section 4.6 Sale of Collateral; Further Encumbrances. No Pledgor shall
(a) except for dispositions with the prior written consent of the Security
Trustee ("Permitted Sales"), sell, lease or otherwise dispose of any Collateral,
or any interest therein, or (b) grant or suffer to exist any Lien in or on any
Collateral. Concurrently with any Permitted Sale, the Security Interest shall
automatically be released from the Collateral so disposed of; provided, however
that the Security Interest shall continue in the Proceeds thereof. If any
Collateral, or any interest therein, is disposed of in violation of these
provisions, the Security Interest shall continue in such Collateral or interest
notwithstanding such disposition, the Person to which the Collateral or interest
is being transferred shall be bound by this Agreement, and the Pledgor shall
deliver all Proceeds thereof to the Security Trustee to be held as Collateral
hereunder.
Section 4.7 Voting and Other Consensual Rights; Distributions.
4.7.1. So long as no Default shall exist:
4.7.1.1. Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to any Collateral, for any purpose
not inconsistent with the terms of this Agreement and the other Financing
Documents; provided, however, that such Pledgor shall not exercise any such
right if it would result in a Default or a Default Occurrence or have a Material
Adverse Effect. Within 10 days of exercising any such right in a manner material
to the Secured Parties, the Pledgor shall give notice to the Security Trustee of
such exercise and the action taken or approved in connection therewith.
4.7.1.2. Except as otherwise provided herein, each Pledgor shall
be entitled to receive and retain and use free of the Security Interest any and
all cash
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and other property paid or otherwise distributed in respect to the Collateral;
provided, however, that any and all (A) dividends and other distributions paid
or payable other than in cash and (B) cash paid upon or in respect of any of the
Collateral upon or in respect of the liquidation or dissolution of any issuer
thereof or upon or in respect of any distribution of capital or redemption or
exchange of any Collateral shall be delivered to the Security Trustee, in the
exact form received, to be held as Collateral hereunder.
4.7.2. So long as a Default shall exist, at the sole option of the
Security Trustee, any or all rights of the Pledgors to exercise voting and other
consensual rights and to receive cash and other property distributed in respect
of Collateral as permitted above by this Section, shall cease, at the option of
the Security Trustee, and the Security Trustee, if and when it notified the
Pledgors of the exercise of such option, shall have the sole right to exercise
any or all such voting and other consensual rights and receive and to hold as
Collateral any or all such cash and other property.
4.7.3. All cash and other property required to be delivered to the
Security Trustee hereunder shall, if received by any Pledgor, be received in
trust for the benefit of the Secured Parties, be segregated from the other
property of the Pledgors, and promptly be delivered to the Security Trustee in
the same form as so received (with any appropriate endorsements of assignments).
4.7.4. The Security Trustee shall execute and deliver (or cause to be
executed and delivered) to the Pledgors all proxies and other instruments as any
Pledgor may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this Section.
Section 4.8. Registration Rights.
4.8.1. Each Pledgor agrees that, at any time following the occurrence
of an Acceleration, upon request of the Security Trustee and without expense to
the Secured Parties, it shall at its own expense:
4.8.1.1. use its best efforts to obtain all necessary
Governmental Approvals for the sale by the Security Trustee of the Collateral or
any part thereof;
4.8.1.2. prepare, cause to be filed and use its best efforts to
cause to become effective with respect to the Collateral, or any part thereof,
one or more registration statements under the Securities Act of 1933, as amended
(or any similar statute from time to time in effect, the "Securities Act"), on
Form S-1 (or such other form for which the respective issuer of the Collateral
then qualifies and which is available for the sale of the Collateral in
accordance with the intended method of disposition thereof) or one or more
qualifications for exemption from registration or similar documents under the
Securities Act relating to any public offering or sale by the Security Trustee
of such Collateral;
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4.8.1.3. prepare, cause to be filed and use its best efforts to
cause to become effective with respect to the Collateral, or any part thereof,
such qualification statements or similar documents (including any offering
circular) as may be necessary to have such Collateral qualified or registered
under the securities laws of such other jurisdictions (including the applicable
state securities of "Blue Sky" law), and to obtain such Governmental Approvals
for the sale of such Collateral, as the Security Trustee may request in
connection with any such offering or sale;
4.8.1.4. include in any such registration statement,
qualification statement or similar document all appropriate information relating
to the transaction or transactions in which the Security Trustee proposes to
offer or sell such Collateral;
4.8.1.5. cause to be filed such pre-effective and post-effective
amendments to each such registration statement, qualification statement or
similar document as may be necessary to prevent any statement therein contained
from being untrue or misleading, and such filing, qualification or registration
to be kept effective for such period as the Security Trustee may deem
appropriate to facilitate the sale or other disposition of such Collateral;
4.8.1.6. furnish the Security Trustee with such numbers of copies
of each such registration statement, qualification statement or similar
document, and any amendments thereto as the Security Trustee may request;
4.8.1.7. furnish to the Security Trustee a legal opinion of
counsel acceptable to the Security Trustee as to such matters regarding such
offering or sale as the Security Trustee may reasonable request; and
4.8.1.8. do such further acts and things as the Security Trustee
may deem necessary to advisable to effectuate the offering and sale by the
Security Trustee of such Collateral in compliance with Applicable Law.
4.8.2. Each Pledgor agrees to indemnify and hold harmless the Secured
Parties and each underwriter (within the meaning of the Securities Act) acting
in the transaction, and each Person controlling (within the meaning of the
Securities Act) any Secured Party or underwriter, from and against any and all
claims, actions, liabilities, costs and expenses (including legal fees and
expenses) based upon or arising out of any actual or alleged untrue statement of
a material fact contained in any such registration statement, qualification
statement or similar document, or part thereof, or any actual or alleged
omission to state a material fact required to be stated in any such document, or
part thereof, or necessary to make the statements contained therein not
misleading; provided, however, that no Pledgor shall have any liability to any
Person under the foregoing indemnity on account of any actual or alleged untrue
or misleading statement contained in, or any actual or alleged omission from,
any information furnished in writing to such Pledgor by such Person specifically
for use in such document and included thereon in reliance therein.
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4.8.3. If the indemnification provided for in this Section 4.8. is
unavailable to or otherwise insufficient to hold harmless an indemnified party
hereunder in respect of any claims, actions, liabilities, costs or expenses
referred to herein, then each Pledgor, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such claims, actions, liabilities, costs or expenses in such
proportion as is appropriate to reflect the relative fault of such Pledgor, any
Secured Party and each underwriter in connection with the statements or
omissions that resulted in such claims, actions, liabilities, costs or expenses,
as well as any other relevant equitable considerations.
4.8.4. Each Pledgor agrees that (i) exercise of registration and other
rights provided in this Section 4.8 is not required in connection with any
exercise of remedies under Article 5 of this Agreement, (ii) such rights may be
exercised or not exercised in the sole discretion of the Security Trustee and
(iii) any request for exercise of such rights may be withdrawn in whole or in
part at any time by the Security Trustee in its sole discretion.
ARTICLE 5.
DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
Section 5.1. Remedies Upon Default. If upon or after the occurrence of
any Default, the Security Trustee elects to exercise remedies under this
Agreement (the occurrence of any such election or other event shall be referred
to as an "Acceleration"), then, whether or not all the Secured Obligations shall
have become immediately due and payable:
5.1.1. In addition to all its other rights, powers and remedies under
this Agreement and Applicable Law, each Secured Parties shall have, and may
exercise, any and all of the rights, powers and remedies of any secured part
under the UCC, all of which rights, powers and remedies shall be cumulative and
not exclusive, to the extent permitted by Applicable Law.
5.1.2. The Security Trustee shall have the right, all at the Security
Trustee's sole option and as the Security Trustee in its discretion may deem
necessary or advisable, to do any or all of the following:
5.1.2.1. to foreclose the Security Interest by any available
judicial procedure or without judicial process; and
5.1.2.2. to exercise any and all other rights, powers, privileges
and remedies of any owner of the Collateral, including rights of conversion,
exchange or subscription or other rights or upon the exercise by any Pledgor or
the Security Trustee of any right, power or privilege pertaining to the
Collateral, the right to deposit and deliver any and all of the Collateral to
any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Security
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13
Trustee may determine to be appropriate, all without liability except to account
for property actually received by it, but the Security Trustee shall have no
duty to the Pledgors to exercise any such right, power or privilege and shall
not be responsible for any failure to do so or delay in so doing.
5.1.3. The Security Trustee shall have the right to sell or
otherwise dispose of all or any Collateral at public or private sale or sales,
with such notice as may be required by Section 5.3., in lots or in bulk, at any
exchange, over the counter or at any of the Security Trustee's offices or
elsewhere, for cash or on credit, with or without representations or warranties,
all as the Security Trustee, in its discretion, may deem advisable. The
Collateral need not be present at any such sales. If sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Security Trustee until the sale price is paid by the
purchaser thereof, but the Secured Parties shall not incur any liability in case
any such purchaser shall fail to take up and pay for the Collateral so sold and,
in case of any such failure, such Collateral may be sold again upon like notice.
The Security Trustee shall not be obligated to make any sale of the Collateral
regardless of notice of sale having been given. The Security Trustee may
purchase all or any part of the Collateral at public or, if permitted by
Applicable Law, private sale, and in lieu of actual payment of the purchase
price, the Security Trustee may apply against such purchase price any amount of
the Secured Obligations. Each Pledgor agrees that any sale of Collateral
conducted by the Security Trustee in accordance with the foregoing provisions of
this Section and Section 5.2. shall be deemed to be a commercially reasonable
sale under Section 9-504 of the UCC.
5.1.4. The Security Trustee shall not be required to register or
qualify any of the Collateral that constitutes securities under applicable state
or federal securities laws in connection with any sale or other disposition
thereof if such disposition is effected in a manner that complies with all
applicable federal and state securities laws. The Security Trustee shall be
authorized at any such disposition (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will represent and
agree that they are "accredited investors" or "qualified institutional buyers"
under Applicable Law and purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof. If any such
Collateral is sold at private sale, each Pledgor agrees that if such Collateral
is sold in a manner that the Security Trustee in good faith believes to be
reasonable under the circumstances then existing, then (A) the sale shall be
deemed to be commercially reasonable in all respects, (B) such Pledgor shall not
be entitled to a credit against the Secured Obligations in any amount in excess
of the purchase price, and (C) the Secured Parties shall not incur any liability
or responsibility to any Pledgor in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Pledgor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by the Security Trustee of any such Collateral for an amount
substantially less than the price that might have been achieved had the
Collateral been
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so traded may be commercially reasonable in view of the difficulties that may be
encountered in attempting to sell Collateral that is privately traded.
Section 5.2. Application of Proceeds.
5.2.1. Any cash proceeds received by the Security Trustee in respect
of any sale of, collection from, or other realization upon, all of any part of
the Collateral following the occurrence of an Acceleration or otherwise
(including insurance proceeds) may be held by the Security Trustee as Collateral
and/or then or at any time thereafter applied as provided in the Inter-Creditor
Agreement (or as otherwise determined by the Security Trustee if the
Inter-Creditor Agreement is no longer in effect).
5.2.2. Each Pledgor and any other Person then obligated therefor shall
pay to the Security Trustee on demand any deficiency with regard to the Secured
Obligations that may remain after such sale, collection or realization of, from
or upon the Collateral.
5.2.3. Payments received from any third party on account of any
Collateral shall not reduce the Secured Obligations until paid in cash to the
Security Trustee. The application of proceeds by the Security Trustee shall be
without prejudice to the Security Trustee's rights as against any Pledgor or
other Persons with respect to any Secured Obligations that may then be or remain
unpaid.
5.2.4. If at any time after an Acceleration any Pledgor receives any
collections upon or other Proceeds of any Collateral, whether in the form of
cash, notes or otherwise, such Proceeds shall be received in trust for the
Secured Parties and such Pledgor shall keep all such Proceeds separate and apart
from all other funds and property so as to be capable of identification as the
property of the Secured Parties and promptly deliver such Proceeds to the
Security Trustee in the identical form received.
Section 5.3. Notice. Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Security Trustee will send or otherwise make available to each
Pledgor reasonable notice of the time and place of any public sale or of the
time on or after which any private sale of any Collateral is to be made. Each
Pledgor agrees that any notice required to be given by the Security Trustee of a
sale or other disposition of Collateral, or any other intended action by the
Security Trustee, that is received in accordance with the provisions set forth
in Section 6.4. five days prior to such proposed action shall constitute
commercially reasonable and fair notice thereof to the Pledgers. The Security
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Pledgor hereby
waives any right to receive notice of any public or private sale of any
Collateral or other security for the Secured Obligations except as expressly
provided for in this Section.
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15
ARTICLE 6.
GENERAL
Section 6.1. Security Trustee's Expenses, Including Attorneys' Fees.
Regardless of the occurrence of a Default or Default Occurrence, the Pledgors
jointly and severally agree to pay to the Security Trustee any and all advances,
charges, costs and expenses, including the fees and expenses of counsel and any
experts or agents, that the Security Trustee may incur in connection with (a)
the administration of this Agreement, (b) the creation, perfection or
continuation of the Security Interest or protection of its priority or the
Collateral, including the discharging of any prior or junior Lien or adverse
claim against the Collateral or any part thereof that is not permitted hereby or
by the Financing Documents, (c) the custody, preservation or sale of, collection
from, or other realization upon, any of the Collateral, (d) the exercise or
enforcement of any of the rights, powers or remedies of the Security Trustee
under this Agreement or under Applicable Law (including attorneys' fees and
expenses incurred by the Security Trustee in the collection of Collateral
deposited with the Security Trustee and amounts incurred in connection with the
operation, maintenance or foreclosure of the Security Interest) or any workout
or restructuring or insolvency or bankruptcy proceeding or (e) the failure by
any Pledgor to perform or observe any of the provisions hereof. All such amounts
and all other amounts payable hereunder shall be payable on demand, together
with interest at the Default Rate, from and including the due date to and
excluding the date of payment.
Section 6.2. Amendments and Other Modifications. No amendment of any
provision of this Agreement (including a waiver thereof or consent relating
thereto) shall be effective unless the same shall be in writing and signed by
the Security Trustee. Any waiver or consent relating to any provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on any Pledgor in any case shall
entitle such Pledgor to any other or further notice or demand in similar or
other circumstances.
Section 6.3. Cumulative Remedies; Failure or Delay.
The rights and remedies provided for under this Agreement are
cumulative and are not exclusive of any rights and remedies that may be
available to the Secured Parties under Applicable Law, the other Financing
Documents or otherwise. No failure or delay on the part of the Security Trustee
in the exercise of any power, right or remedy under this Agreement shall impair
such power, right or remedy or shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude other or
further exercise of such or any other power, right or remedy.
Section 6.4. Notices, Etc. All notices and other communications under
this Agreement shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid) or
by prepaid telex,
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16
telecopy or telegram, and shall be deemed given when received by the intended
recipient thereof. Unless otherwise specified in a notice given in accordance
with the foregoing provisions of this Section 6.4, notices and other
communications shall be given to the parties hereto at their respective
addresses (or to their respective telex telecopier numbers) indicated on
Schedule 6.4.
Section 6.5. Successors and Assigns. This Agreement shall be binding
upon and, subject to the next sentence, inure to the benefit of each Pledgor and
the Security Trustee and their respective successors and assigns. No Pledgor
shall assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Security Trustee. The benefits of this Agreement
shall pass automatically with any assignment of the Secured Obligations (or any
portion thereof), to the extent of such assignment.
Section 6.6. Payments Set Aside. Notwithstanding anything to the
contrary herein contained, this Agreement, the Secured Obligations and the
Security Interest shall continue to be effective or reinstated, as the case may
be, if at any time any payment, or any part thereof, of any or all of the
Secured Obligations is rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be restored or returned by any Secured
Party in connection with any bankruptcy, reorganization or similar proceeding
involving any Pledgor, any other party liable with respect to the Secured
Obligations or otherwise, if the proceeds of any Collateral are required to be
returned by such Secured Party under any such circumstances, or if any Secured
Party elects to return any such payment or proceeds or any part thereof in its
sole discretion, all as though such payment had not been made or such proceeds
not been received. Without limiting the generality of the foregoing, if prior to
any such rescission, invalidation, declaration, restoration or return, this
Agreement shall have been cancelled or surrendered or the Security Interest or
any Collateral shall have been released or terminated in connection with such
cancellation or surrender, this Agreement and the Security Interest and such
Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, discharge or otherwise affect the
obligations of the Pledgors in respect of the amount of the affected payment or
application of proceeds, the Security Interest or such Collateral.
Section 6.7. Continuing Security Interest; Termination. This Agreement
shall create a continuing security interest in the Collateral and, except as
provided below, the Security Interest and all agreements, representations and
warranties made herein shall survive until, and this Agreement shall terminate
only upon, the indefeasible payment in full of the Secured Obligations.
Notwithstanding anything in this Agreement or Applicable Law to the
contrary, the agreements of the Pledgors set forth in Sections 4.8.2 and 6.1
shall survive the payment of all other Secured Obligations and the termination
of this Agreement.
Pledge Agreement
17
Section 6.8. Choice of Forum
6.8.1. Each of the Pledgors irrevocably agrees for the benefit of each
of the Beneficiaries that the courts of England shall have jurisdiction to hear
and determine any suit, action or proceeding, and to settle any disputes, which
may arise out of or in connection with this Agreement (and the other Financing
Documents) and, for such purposes, irrevocably submits to the jurisdiction of
such courts. Each of the Pledgors irrevocably agrees that the courts of the
State of New York and the courts of the United States of America in New York
shall have jurisdiction to hear and determine any suit, action or proceeding,
and to settle any disputes, which may arise out of or in connection with this
Agreement (and the other Financing Documents) and, for such purposes,
irrevocably submits to the jurisdiction of such courts. Each of the Pledgors
irrevocably waives any objection which it might now or hereafter have to the
courts referred to in this Section 6.8.1 being nominated as the forum to hear
and determine any suit, action or proceeding, and to settle any disputes, which
may arise out of or in connection with this Agreement and the Financing
Documents and agrees not to claim that any such court is not a convenient or
appropriate forum.
IN ANY ACTION AGAINST ANY PLEDGOR, SERVICE OF PROCESS MAY BE MADE UPON
SUCH PLEDGOR OR BY DELIVERY OR BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS INDICATED IN SCHEDULE 6.4, WHICH SERVICE SHALL BE
DEEMED SUFFICIENT FOR PERSONAL JURISDICTION AND SHALL BE DEEMED EFFECTIVE UPON
RECEIPT, IN THE CASE OF DELIVERY, AND 10 DAYS AFTER MAILING, IN THE CASE OF
MAILING. Each Pledgor hereby irrevocably appoints CT Corporation Systems (the
"Process Agent"), with offices on the date hereof in New York, New York as
Process Agent to receive for and on behalf of such Pledgor service of process in
the County of New York relating to this Agreement. SERVICE OF PROCESS IN ANY
ACTION OR PROCEEDING AGAINST ANY PLEDGOR MAY BE MADE ON THE PROCESS AGENT BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER METHOD
OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW
YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO ACCEPT SUCH
SERVICE FOR AND ON BEAHLF OF SUCH PLEDGOR AND TO ADMIT SERVICE WITH RESPECT
THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE PERSONAL
SERVICE ON SUCH PLEDGOR, SUFFICIENT FOR PERSONAL JURISDICTION, 10 DAYS AFTER
MAILING, AND SHALL BE LEGAL AND BINDING UPON SUCH PLEDGOR FOR ALL PURPOSES,
NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF SUCH LEGAL
PROCESS TO SUCH PLEDGOR, OR ANY FAILURE ON THE PART OF SUCH PLEDGOR TO RECEIVE
THE SAME. Each Pledgor confirms that it has instructed the Process Agent to mail
such Pledgor, upon service of process being made on the Process Agent pursuant
to this Section, a copy of the summons and complaint or other legal process
served upon it, be registered mail, return receipt
Pledge Agreement
18
requested, at such Pledgor's address set forth in Schedule 6.4., or to such
other address as such Pledgor may notify the Process Agent in writing. Each
Pledgor agrees that it will at all time maintain a process agent to receive
service of process in the County of New York on its behalf with respect to this
Agreement. If for any reason the Process Agent or any successor thereto shall no
longer serve as such process agent or shall have changed its address without
notification thereof to the Beneficiaries, such Pledgor, immediately after
gaining knowledge thereof, irrevocably shall appoint a substitute process agent
acceptable to the Security Trustee in the County of New York and advise the
Security Trustee thereof.
6.8.2. The submission to the jurisdiction of the courts referred to in
Section 6.8.1. shall not (and shall not be construed as to) limit the right of
the Beneficiaries or any of them to take proceedings against any of the Pledgors
in any other court of competent jurisdiction nor shall the taking of proceedings
in any one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if and to the extent permitted by
applicable law.
Section 6.9. Waiver and Estoppel. Except as otherwise provided in this
Agreement, each Pledgor hereby waives: (a) presentment, protest, notice of
dishonor, release, compromise, settlement, extension or renewal and any other
notice of or with respect to the Secured Obligations and hereby ratifies and
confirms whatever the Security Trustee may do in this regard; (b) notice prior
to taking possession or control of any Collateral; (C) any bond or security that
might be required by any court prior to allowing the Security Trustee to
exercise any of their rights, powers or remedies; (d) the benefit of all
valuation, appraisement, redemption and exemption laws; (e) any rights to
require marshalling of the Collateral upon any sale or otherwise to direct the
order in which the Collateral shall be sold; (f) any set-off; and (g) any rights
to require the Security Trustee to proceed against any Person, proceed against
or exhaust any Collateral or any other security interests or guaranties or
pursue any other remedy in the Security Trustee power, or to pursue any of such
rights in particular order or manner, and any defenses arising by reason of any
disability or defense of any Person.
Section 6.10. Nature of Agreement. This Agreement is independent of
and not in consideration of or contingent upon the liability of any Borrower or
any other Person and foreclosure or other action may be taken against all or any
Collateral and a separate action or actions may be brought and prosecuted
against any Pledgor, whether or not any foreclosure or other action is taken
with respect to any other collateral or action is brought or prosecuted against
any Borrower or any other obligor or whether any Borrower or any other obligor
is joined in any such action or actions. This Agreement shall be construed as
continuing, absolute and unconditional without regard to:
6.10.1. the legality, validity or enforceability of the Credit
Agreement, the U.S. Loan Notes or any other Financing Document, any of the
Secured
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Obligations, any Lien or other collateral or any guaranty of the Secured
Obligations or any part thereof;
6.10.2. any defense (other than payment), set-off or counterclaim that
may at any time be available to any Borrower or any other obligor against, and
any right of setoff at any time held by, any Secured Party; or
6.10.3. any other circumstance whatsoever (with or without notice to
or knowledge of any Pledgor or any other obligor), whether or not similar to any
of the foregoing, that constitutes, or might be construed to constitute, an
equitable or legal discharge of any Borrower or any other obligor for the
Secured Obligations, in bankruptcy or in any other instance.
Section 6.11. Authorization. Each Pledgor authorizes each Secured
Party, without notice to or further assent by such Pledgor, and without
affecting any Pledgor's liability hereunder or the Security Interest (regardless
of whether any subrogation or similar right that such Pledgor may have or any
other right or remedy of such Pledgor is extinguished or impaired), from time to
time to:
6.11.1. permit any Borrower to increase or create Secured Obligations,
or terminate, release, compromise, subordinate, extend, accelerate or otherwise
change the amount or time, manner or place of payment of, or rescind any demand
for payment or acceleration of, the Secured Obligations or any part thereof
(including increasing or decreasing the rate of interest thereon), or otherwise
amend the terms and conditions of the Credit Agreement, the U.S. Loan Notes, any
other Financing Document or any provision thereof;
6.11.2. take and hold other collateral from any Borrower or any other
Person, perfect or refrain from perfecting a Lien on such other collateral, and
exchange, enforce, subordinate, release (whether intentionally or
unintentionally), or take or fail to take any other action in respect of, any
such other collateral or Lien or any part thereof;
6.11.3. exercise in such manner and order as it elects in its sole
discretion, fail to exercise, waive, suspend, terminate or suffer expiration of,
any of the remedies or rights of such Secured Party against any Borrower of any
other Person in respect of any Secured Obligations or any other collateral;
6.11.4. release, add or settle with any Person in respect of this
Agreement, any guaranty or the Secured Obligations;
6.11.5. accept partial payments on the Secured Obligations and apply
any and all payments or recoveries from any Person or other collateral to such
of the Secured Obligations as any Secured Party may elect in its sole
discretion, whether or not such Secured Obligations are otherwise secured or
guaranteed;
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6.11.6. refund at any time, at such Secured Party's sole discretion,
any payments or recoveries received by such Secured Party in respect of any
Secured Obligations or other collateral; and
6.11.7. otherwise deal with any Borrower, any other obligor and any
other collateral as such Secured Party may elect in its sole discretion.
Section 6.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.
Section 6.13. Complete Agreement. This Agreement, together with the
exhibits and schedules hereto and other Financing Documents, is intended by the
parties as a final expression of their agreement regarding the subject matter
hereof and as a complete and exclusive statement of the terms and conditions of
such agreement.
Section 6.14. Limitation of Liability. No claim shall be made by any
Pledgor against the Secured Parties or the affiliates, directors, officers,
employees or agents of the Secured Parties for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or under any other theory of liability arising out of or related to the
transactions contemplated by this Agreement and the other Financing Documents,
or any act, omission or event occurring in connection therewith; and each
Pledgor hereby waives, release and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 6.15. WAIVER OF TRIAL BY JURY. EACH PLEDGOR AND THE SECURITY
TRUSTEE WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS AGREEMENT OR
ANY OTHER FINANCING DOCUMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION
OR ACTIONS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first set forth above.
Pledgors:
Automated Loss Prevention Systems, Limited
a company incorporated in England and Wales
By:/s/ Peter Bertram
---------------------------------------------
Name: PETER BERTRAM
Title: Group Finance Director
Automated Security Corporation, a Delaware
corporation
By:/s/ Peter Bertram
---------------------------------------------
Name: PETER BERTRAM
Title: Director
Automated Security Holdings Inc., a Delaware
corporation
By:/s/ Peter Bertram
---------------------------------------------
Name: PETER BERTRAM
Title: Director
Security Trustee:
Lloyds Bank Plc
By:/s/ L.H. Tinsley
---------------------------------------------
Name: L.H. TINSLEY
Title: Director, Capital Markets Group
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SCHEDULE A
PLEDGED STOCK
1. 1,000 shares of Common Stock , $0.01 par value per share, of Sonitrol
Management Corporation, a Delaware corporation, constituting 100% of the
issued and outstanding shares of such Common Stock.
2. 759 share of Common Stock, $0.01 par value per share, of Sonitrol
Corporation, a Delaware corporation, constituting 100% of the issued and
outstanding shares of such Common Stock.
3. 1 share of Common Stock, $1.00 part value per share, of API Security, Inc.,
a Delaware corporation, constituting 9.1% of the issued and outstanding
shares of such Common Stock.
4. 458 shares of Common Stock, $0.01 par value per share, of Automated
Security Corporation, a Delaware corporation, 100% of the issued and
outstanding shares of such Common Stock.
5. 11 shares of Common Stock, $1.00 par value per share, of Automated Security
Holdings, Inc., a Delaware corporation, constituting 100% of the issued and
outstanding shares of such Common Stock.
Existing Liens - Schedule
1
SCHEDULE 3.3
CAPITALIZATION OF ISSUERS OF PLEDGED STOCK
1. Issuer: Sonitrol Management Corporation
Number of Authorized Shares: 1,000 shares of Common Stock
Number of Issued and Outstanding Shares: 1,000 shares of Common Stock
2. Issuer: Sonitrol Corporation
Number of Authorized Shares: 1,000 shares of Common Stock
Number of Issued and Outstanding Shares: 759 shares of Common Stock
3. Issuer: API Security, Inc.
Number of Authorized Shares: 100 shares of Common Stock
Number of Issued and Outstanding Shares: 11 shares of Common Stock
4. Issuer: Automated Security Corporation
Number of Authorized Shares: 1,000 shares of Common Stock
Number of Issued and Outstanding Shares: 458 shares of Common Stock
5. Issuer: Automated Security Holding, Inc.
Number of Authorized Shares: 100 shares of Common Stock
Number of Issued and Outstanding Shares: 11 shares of Common Stock
Pledge Agreement - Schedule
1
SCHEDULE 4.4.
ADDRESSES
1. If to Automated Security Corporation:
Automated Security Corporation
8550 Higuera Street, Culver City, CA 90232
Attention:
Telex:
Facsimile:
2. If to Sonitrol Management Corporation:
Sonitrol Management Corporation
8 Campus Circle, Suite 150
Westland, TX 76262
Attention:
Telephone:
Facsimile:
3. If to Sonitrol Corporation
Sonitrol Corporation
1800 Diagonal Road, Suite 180
Alexandria, VA 22314
Attention:
Telephone:
Facsimile:
4. If to Automated Security Holdings Inc.:
Automated Security Holdings Inc.
[Address]
Attention:
Telephone:
Facsimile:
5. If to the Beneficiaries:
Lloyds Bank Plc
Corporate Banking Division
St. Georges House
6-8 Eastcheap
London EC3M ILL
Attention: Nigel Robinson
Telephone: 0171-418 3532
Facsimile: 0171-489 8315
Guaranty
Instructions
1
CONFORMED COPY
DATED 21st December 1995
TELECOM SECURITY LIMITED
-and-
LLOYDS BANK Plc
as Security Trustee
-----------------------
GUARANTEE AND DEBENTURE
-----------------------
WILDE SAPTE
1 Fleet Place
London ED4M 7WS
Tel. 071 246 7000
Fax. 071 246 7777
VOLUME I
Document Parties
- -------- -------
Credit documentation
1. Conformed copy of Credit Agreement ASH, certain subsidiaries of ASH,
Lloyds as Agent, Midland as Working
Capital Bank, certain other banks
and financial institutions
2. Conformed copy of Inter-Creditor ASH, Lloyds as Security Trustee,
Agreement Lloyds as Agent, Midland as Working
Capital Bank, certain other banks
and PRICOA
TABLE OF CONTENTS
Clause Heading Page Number
- ------ ------- -----------
1. DEFINITIONS AND INTERPRETATION ...................................... 1
2. GUARANTEE ........................................................... 3
3. MORTGAGES, FIXED CHARGES AND FLOATING CHARGE ........................ 3
4. NEGATIVE PLEDGE ..................................................... 5
5. FURTHER ASSURANCE ................................................... 5
6. DEBTS AND CREDIT BALANCES ........................................... 6
7. CONVERSION OF FLOATING CHARGE AND AUTOMATIC CRYSTALLISATION ......... 7
8. INSURANCE ........................................................... 7
9. UNDERTAKINGS BY THE CHARGOR ......................................... 8
10. POWERS OF THE SECURITY TRUSTEE ...................................... 10
11. APPOINTMENT OF RECEIVER ............................................. 11
12. POWER OF ATTORNEY ................................................... 12
13. PROTECTION OF PURCHASERS ............................................ 13
14. CONSOLIDATION OF ACCOUNTS AND SET-OFF ............................... 13
15. CURRENCY ............................................................ 13
16. APPLICATION ......................................................... 14
17. NOTICES ............................................................. 14
18. NEW ACCOUNTS ........................................................ 15
19. CONTINUING SECURITY ................................................. 15
20. REMEDIES CUMULATIVE ETC ............................................. 15
21. PROVISIONS SEVERABLE ................................................ 16
22. THE SECURITY TRUSTEE'S DISCRETION ................................... 16
23. AMENDMENTS .......................................................... 16
24. LAW ................................................................. 16
25. AMENDMENTS TO SECURED DOCUMENTS ..................................... 17
26. TRUST ............................................................... 17
27. ASSIGNMENT .......................................................... 17
SCHEDULE 1 - GUARANTEE PROVISIONS PURSUANT TO CLAUSE 2 .................... 18
SCHEDULE 2 - THE LEGALLY MORTGAGED PROPERTY ............................... 22
AUTOMOTED SECURITY (HOLDINGS) PLC
CERTAIN BANKS AND FINANCIAL INSTITUTIONS
CREDIT AGREEMENT
DATED 21ST DECEMBER 1995
Table of Contents - VOLUME I
Parties
- -------
ASH Capital Finance (Jersey) Limited ASH Jersey
Automated Loss Prevention Systems Limited ALPS
Automated Security Corporation ASC
Automated Security Holdings Inc. ASHI
Automated Security (Holdings) PLC ASH
Automated Security Limited ASL
Automated Security (Properties) Limited ASP
Modern Security Systems Limited MSSL
Sonitrol Corporation SC
Sonitrol Management Corporation SMC
Telecom Security Limited TSL
TVX Limited TVX
ABN Amro N.V. ABN
Allied Irish Banks p.l.c. AIB
Banco Bilbao Vizcaya, S.A. Bilbao
Barclays Bank PLC Barclays
BHF-Bank AG BHF
Lloyds Bank Plc Lloyds
Midland Bank plc Midland
National Westminster Bank Plc NatWest
Prudential Insurance Company of America PRICOA
The Bank of Tokyo, Ltd Tokyo
The Fuji Bank, Limited Fuji
All documents dated 21st December 1995 unless otherwise stated.
THIS GUARANTEE AND DEBENTURE dated the 21st day of December 1995 is granted
BY:
(1) TELECOM LIMITED, a company incorporated under the laws of England and Wales
with registered number 1977016 (the "Chargor")
IN FAVOUR OF:
(2) LLOYDS BANK Plc, acting from its office at P.O. Box 560, Regent House, St
John's Road, Bedminster, Bedford, BS99 1PQ as agent and trustee for the
Secured Parties (the "Security Trustee") pursuant to the Intercreditor
Agreement (as such term is defined below).
NOW THIS DEED WITNESSETH as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Guarantee and Debenture, unless the context otherwise requires or
unless otherwise defined or provided for in this Guarantee and Debenture,
words and expressions shall have the same meanings as is attributed to them
under the Credit Agreement (as such term is defined below). In addition,
the following words and expressions shall have the respective meanings
ascribed to them:
"Banks" means all and each of the Banks and the Engagements Bank as such
terms are defined in the Credit Agreement;
"Credit Agreement" means a credit agreement of even date and made between
(1) Automated Security (Holdings) PLC, (2) Certain subsidiaries of
Automated Security (Holdings) PLC, (3) Certain banks, (4) Lloyds Bank Plc
as agent and (5) Midland Bank plc as engagements bank; and
"Charged Property" means the property, assets and income of the Chargor
mortgaged or charged to the Security Trustee (whether by way of legal
mortgage, fixed or floating charge) by or pursuant to this Guarantee and
Debenture and each and every part thereof;
"Credit Balances" has the meaning ascribed to that term in Clause 3.1(e);
"Debts" has the meaning ascribed to that term in Clause 3.1(d);
"Demand" means (i) the service of a notice by the Agent under Clause 15 of
the Credit Agreement, or (ii) the service of a notice by the US Loan Note
Holders under paragraph 7(a) of the US Loan Notes Instrument;
"Floating Charge Property" has the meaning ascribed to that term in Clause
3.1(i);
"Guarantee" means the guarantee given by the Chargor in the terms of Clause
2.1 subject to and with the benefit of the provisions set forth in Schedule
1;
"Intercreditor Agreement" means an intercreditor agreement executed or to
be executed by the Security Trustee, the parties to the Credit Agreement
and the US Loan Note Holders;
"Legally Mortgaged Property" has the meaning ascribed to that term in
Clause 3.1(a);
"Receiver" means an administrative receiver or a receiver appointed
pursuant to the provisions of this Guarantee and Denbenture or pursuant to
any applicable law and such expression shall include, without limitation, a
receiver and manager;
"Secured Documents" means all and each of the Credit Agreement, the Fees
Letter, the US Loan Notes Instrument, the US Loan Notes, this Guarantee and
Debenture and any other Security Document executed by the Chargor;
"Secured Obligations" means the actual, contingent, present and/or future
obligations and liabilities of the Chargor to any of the Secured Parties
under, or pursuant to, all or any of the Secured Documents;
"Secured Parties" means all and each of the Security Trustee, the Banks,
the Agent and the US Loan Note Holders;
Security Trustee's Rate" means, in respect of a particular day and
particular sum, the rate per annum at which the Security Trustee offered
deposits in Sterling in the amount of such sum for a one month period to
prime banks in the London inter-bank market at or about 11:00 a.m. (London
time) on such day;
"US Loan Notes" means $60,721,638.12, 8.28 per cent senior notes due 1998;
"US Loan Note Holders" means the holders for the time being of the US Loan
Notes; and
"US Loan Notes Instrument" means the Note Agreement dated as of May 27,
1994 between Automated Security (Holdings) PLC and The Prudential Insurance
Company of America as amended by the First Amendment dated on or about the
date hereof made between the same parties.
1.2 In this Guarantee and Debenture:
(a) references to Clauses and Schedules are to be construed as references
to the Clauses of, and Schedules to, this Guarantee and Debenture,
references to sub-Clauses shall unless otherwise specifically stated
be construed as references to the sub-Clauses of the Clause in which
the reference appears and references to this Guarantee and Debenture
include its Schedules;
(b) references to this Guarantee and Debenture (or to any specified
provisions of this Guarantee and Debenture) or any other document
shall be
construed as references to this Guarantee and Debenture, that
provision or that document as in force for the time being and as
amended in accordance with its terms, or, as the case may be, with the
agreement of the relevant parties;
(c) words importing the singular shall include the plural and vice versa;
(d) references to a person shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any state or any agency thereof;
(e) references to any statute or statutory provision include any statute
or statutory provision which amends, extends, consolidates or replaces
the same, or which has been amended, extended, consolidated or
replaced by the same, and shall include any orders, regulations,
instruments or other subordinate legislation made under the relevant
statute;
(f) the words "other" and "otherwise" shall not be construed ejusdem
generis with any foregoing words where a wider construction is
possible; and
(g) the words "including" and "in particular" shall be construed as being
by way of illustration or emphasis only and shall not be construed as,
nor shall they take effect as, limiting the generality of any
foregoing words.
2. GUARANTEE
2.1 The Chargor hereby guarantees to the Security Trustee as agent and trustee
for the Secured Parties that it shall on demand, after the making of a
Demand, pay to the Security Trustee in the currency in which the same falls
due for payment, all moneys which are now or at any time hereafter shall
have become due or owing by any company within the Group (other than
itself) from time to time to any or all of the Secured Parties under or
pursuant to the terms of all or any of the Secured Documents.
2.2 The Guarantee given pursuant to Clause 2.1 is given subject to, and with
the benefit of the provisions set forth in Schedule 1.
2.3 The Chargor hereby covenants with the Security Trustee as agent and trustee
for the Secured Parties that it shall on demand, after the making of a
Demand, to the extent that the same have fallen due pursuant to the terms
of the Secured Documents and have not been paid, pay to the Security
Trustee all costs and expenses incurred by the Security Trustee in relation
to this Guarantee and Debenture and the protection or enforcement of the
Security Trustee's rights hereunder.
3. MORTGAGES, FIXED CHARGES AND FLOATING CHARGE
3.1 The Chargor, with full title guarantee, as continuing security for the
payment of the Secured Obligations hereby charges in favour of the Security
Trustee (as agent and trustee for the Secured Parties):
(a) by way of legal mortgage all estates or interests in the freehold,
leasehold and other immovable property described in Schedule 2 and the
proceeds of sale thereof and all buildings and trade and other
fixtures on any such property belonging to the Chargor (the "Legally
Mortgaged Property")
(b) by way of fixed charge all estates or interests in any freehold,
leasehold and other immovable property now or at any time during the
continuance of this security belonging to the Chargor (other than the
Legally Mortgaged Property) and the proceeds of sale thereof and all
buildings and trade and other fixtures from time to time on any such
property belonging to the Chargor;
(c) by way of fixed charge all plant, machinery, vehicles, computers and
office and other equipment owned by the Chargor both present and
future;
(d) by way of fixed charge all book debts and other debts now and from
time to time due or owing to the Chargor (the "Debts") and (subject to
the provisions of Clause 6.2 hereof) all moneys which the Chargor
receives in respect thereof;
(e) by way of fixed charge (but subject to the provisions of Clause 6.2
hereof) all balances standing to the credit of any current, deposit or
other account of the Chargor with the Secured Parties (including,
inter alia, any account designated a realisations account for the
proceeds of disposals of any of the assets of the Chargor) or with
other bankers, financial institutions or similar third parties (the
"Credit Balances");
(f) by way of fixed charge all stocks, shares, debentures, bonds, notes,
loan capital of:
(i) any Subsidiary of the Chargor; and
(ii) any other body corporate;
and all rights to subscribe for, redeem, convert other securities into
or otherwise acquire any of the same which may now or hereafter belong
to the Chargor, together with all dividends, interest and other income
and all other rights of whatsoever kind deriving from or incidental to
any of the foregoing;
(g) by way of fixed charge the goodwill of the Chargor and its uncalled
capital now or at any time hereafter in existence;
(h) by way of fixed charge all copyrights, patents, patent applications,
licences, trade marks, tradenames, know-how and inventions or other
rights of every kind deriving therefrom now or at any time hereafter
belonging to the Chargor and all fees, royalties and other rights of
every kind deriving from such copyrights, patents, trade marks,
tradenames, know-how and inventions; and
(i) by way of floating charge the whole of the Chargor's undertaking and
all its property, assets and rights, whatsoever and wheresoever,
present and future, other than any property or assets from time to
time or for the time being effectively mortgaged or charged to the
Security Trustee by way of fixed charge by this Clause 3 or any other
Security Document (hereinafter collectively referred to as the
"Floating Charge Property").
3.2 The security constituted by or pursuant to this Guarantee and Debenture
shall be in addition to and shall be independent of every bill, note,
guarantee, mortgage, pledge or other security which the Security Trustee or
any other Secured Party may at any time hold in respect of any of the
Secured Obligations and it is hereby declared that no prior security held
by the Security Trustee or any other Secured Party over the Charged
Property or any part thereof shall merge in the security created hereby or
pursuant hereto.
4. NEGATIVE PLEDGE
The Chargor hereby covenants that without the prior written consent of the
Security Trustee it shall not nor shall it agree or purport to:
(a) create or permit to subsist any Encumbrance (other than a Permitted
Encumbrance) whether in any such case ranking in priority to or pari
passu with or after the security created by this Guarantee and
Debenture save to the extent permitted or required under the Credit
Agreement or the US Loan Notes Instrument; or
(b) sell, discount, factor, transfer, lease, lend or otherwise dispose of,
whether by means of one or a number of transactions related or not and
whether at one time or over a period of time, the whole or any part of
its undertaking or assets except as permitted under the Credit
Agreement or the US Loan Notes Instrument.
5. FURTHER ASSURANCE
5.1 The Chargor hereby applies to the Chief Land Registrar for the registration
against the registered titles specified in Schedule 2 of the following:
(a) a restriction in the following terms:
"except under an order of the Registrar no charge or other security
interest is to be registered or noted without the consent of the
proprietor for the time being of charge number [ ]";
(b) a notice that under the provisions of this Guarantee and Debenture the
Secured Parties are under an obligation to make further advances.
5.2 The Chargor shall from time to time and to the extent it is able to do so
without breaching any provision of any other agreement binding upon it, at
the request of the Security Trustee and at the Chargor's cost, execute in
favour of the Security Trustee, or as it may direct, such further or other
legal assignments, transfers, mortgages, charges or other documents as in
any such case the Security Trustee shall stipulate over the Chargor's
estate or interest in any property or assets of whatsoever nature or tenure
and wheresoever situate, for the purpose of more effectively providing
security to the Security Trustee on the terms of, or as intended to be
created by, this Guarantee and Debenture for the payment or discharge of
the Secured Obligations. Without prejudice to the generality of the
foregoing, such assignments, transfers, mortgages, charges or other
documents shall be in such form as the Security Trustee shall stipulate and
may contain provisions such as are herein contained or provisions to the
like effect and/or such other provisions of whatsoever kind as the Security
Trustee shall consider requisite for the improvement or perfection of the
security constituted by or pursuant to this Guarantee and Debenture. The
obligations of the Chargor under this Clause shall be in addition to and
not in substitution for the covenants for further assurance deemed to be
included herein by virtue of the Law of Property (Miscellaneous Provisions)
Act 1994.
5.3 The Chargor shall immediately after the execution of this Guarantee and
Debenture (or upon becoming possessed thereof at any time hereafter)
deposit with the Security Trustee all deeds, certificates and other
documents constituting or evidencing title to its real property comprised
within the Charged Property or any part thereof and to any of the assets
and rights charged under Clause 3.1(e).
6. DEBTS AND CREDIT BALANCES
6.1 With reference to the Debts the Chargor shall collect in the Debts and
shall, in the absence of specific written instructions from the Security
Trustee to the contrary, pay into the Chargor's current account with the
Security Trustee and/or if so directed by the Security Trustee into a
special or specifically designated account with the Security Trustee either
in the name of the Chargor or the Security Trustee or into such other
account as the Security Trustee may direct all moneys which the Chargor may
receive in respect of the Debts and shall not without the prior consent in
writing of the Security Trustee sell, factor, discount or otherwise charge
or assign the Debts in favour of any other person or purport to do so and
the Chargor shall if called upon to do so by the Security Trustee from time
to time execute legal assignments of the Debts to the Security Trustee in
forms approved by the Security Trustee.
6.2 Prior to the security hereby created becoming enforceable, in the absence
of any written directions to the contrary from the Security Trustee to pay
such moneys into any other account, any moneys in respect of the Debts
received by the Chargor and paid into any current account with the Security
Trustee in accordance with the
requirements of Clause 6.1 hereof shall upon being paid into such current
account be released from the fixed charge created by Clause 3.1(d) hereof
and shall become subject to the floating charge created by Clause 3.1(i) .
Such release from the fixed charge shall not affect and shall be entirely
without prejudice to the continuance of the said fixed charge on all other
Debts of the Chargor outstanding from time to time and on all moneys which
the Chargor receives in respect thereof.
6.3 With reference to the Credit Balances the Chargor agrees to inform the
Security Trustee as soon as any Credit Balance with any third party comes
into existence and if so directed by the Security Trustee the Chargor shall
transfer any such Credit Balance into the Chargor's account with the
Security Trustee or into a specifically designated account with the
Security Trustee in the name of the Chargor or the Security Trustee or in
the joint names of the Chargor and the Security Trustee and shall not
without the prior consent in writing of the Security Trustee sell or
otherwise charge or assign any Credit Balance in favour of any person or
purport to do so.
7. CONVERSION OF FLOATING CHARGE AND AUTOMATIC CRYSTALLISATION
7.1 If, at any time, the Security Trustee believes that any assets of the
Chargor are in danger of being seized or sold under any form of distress,
execution or other similar process then without prejudice to the provisions
of Clause 7.2 the Security Trustee may, by notice in writing to the
Chargor, convert the floating charge created by this Guarantee and
Debenture into a fixed charge in relation to the assets specified in such
notice (which assets need not be exclusively those assets which are in
danger of seizure or sale) and the Security Trustee shall further be
entitled (but not bound) to take possession of or appoint a Receiver of
such assets.
7.2 If the Chargor charges, pledges or otherwise encumbers (whether by way of
fixed or floating security) any of the property, assets and income
comprising the Floating Charge Property or attempts so to do without the
prior consent in writing of the Security Trustee or if any creditor or
other person levies any distress, execution, sequestration or other process
against any of the said property, assets and income then in the absence of
any notice or other action by the Security Trustee pursuant to Clause 7.1
the floating charge hereby created shall automatically operate as a fixed
charge forthwith upon the occurrence of such event, but only in respect of
the assets, property or income in respect of which or against which such
action was taken.
8. INSURANCE
8.1 The Chargor shall at all times during the subsistence of the security
constituted by or pursuant to this Guarantee and Debenture comply with all
covenants, undertakings and conditions as to insurance of any part of the
Charged Property imposed by the terms of any lease, agreement for lease or
any tenancy under which the Chargor
derives its estate or interest therein and, subject to the foregoing and so
far as not inconsistent with the said terms, the Chargor shall at all such
times:
(a) cause all buildings, trade and other fixtures and all plant,
machinery, vehicles, computers and office and other equipment and all
stock in trade forming part of the Charged Property to be insured and
to be kept insured in such insurance office, in such amounts and
against such risks as the Security Trustee may require from time to
time, but otherwise in such insurance office of repute as shall have
been selected by the Chargor or with Lloyd's underwriters on the
equivalent basis as insurances are maintained by prudent companies
carrying on businesses comparable with that of the Chargor and on a
comparable scale as regards the property and assets insured, the
insured risks and the classes of risk to be covered and the amount of
the insurance cover;
(b) cause the interest of the Security Trustee and the other Secured
Parties in all parts of the Charged Property that are for the time
being insured otherwise than in the joint names of the Security
Trustee and the Chargor to be noted by endorsement on the policy or
policies of insurance relating thereto;
(c) duly and punctually pay all premiums and other moneys due and payable
under all such insurances as aforesaid and promptly upon request by
the Security Trustee produce to the Security Trustee the premium
receipts or other evidence of the payment thereof; and
(d) on demand by the Security Trustee, deposit all policies and other
contracts of insurance relating to the Charged Property or any part
thereof with the Security Trustee or produce the same to the Security
Trustee for inspection.
8.2 If default shall be made by the Chargor in complying with Clause 8.1 the
Security Trustee may but shall not be obliged to effect or renew any such
insurance as is mentioned in that Clause either in its own name or in its
name and that of the Chargor jointly or in the name of the Chargor with an
endorsement of the Security Trustee's interest. The moneys expended by the
Security Trustee on so effecting or renewing any such insurance shall be
reimbursed by the Chargor to the Security Trustee on demand and until so
reimbursed shall carry interest at the rate of two (2) per cent. above the
Security Trustee's Rate from time to time from the date of payment to the
date of reimbursement (after as well as before any judgment).
8.3 All claims and moneys received or receivable under any such insurances as
aforesaid shall (subject to the rights and claims of any lessor or landlord
of any part of the Charged Property) at the direction of the Security
Trustee be applied in making good the loss or damage in respect of which
the same has been received or in or towards the discharge of the Secured
Obligations.
9. UNDERTAKINGS BY THE CHARGOR
9.1 The Chargor hereby undertakes with the Security Trustee and the Secured
Parties that it will at all times while there shall subsist any security
constituted by or pursuant to this Guarantee and Debenture:
(a) keep all buildings, trade and other fixtures, fixed and other plant
and machinery forming part of the Charged Property in good and
substantial repair and permit the Security Trustee, its officers,
employees and agents free access at all reasonable times to view the
state and condition thereof, provided that the Security Trustee shall
have given the Chargor reasonable prior notice of its desire to
exercise its rights under this sub-Clause and requested access
accordingly;
(b) preserve, maintain and renew as and when necessary all copyrights,
licences, patents, trade marks and other rights required in connection
with its business:
(c) observe and perform all covenants and stipulations from time to time
affecting its freehold or leasehold property or the mode of user or
enjoyment of the same and not without the prior consent in writing of
the Security Trustee enter into any onerous or restrictive obligations
affecting any such property or make any structural or material
alteration thereto or do or suffer to be done on any such property
anything which is "development" as defined in section 55 of the Town
and Country Planning Act 1990 nor do or suffer or omit to be done any
act, matter or thing whereby any provision of any Act of Parliament,
order or regulation from time to time in force affecting any such
property is infringed;
(d) observe and perform all covenants reserved by or contained in any
lease, agreement for lease or tenancy agreement under which any part
of the Charged Property may be held and will not, without the consent
of the Security Trustee vary, surrender, cancel, assign or otherwise
dispose of or permit to be forfeited any leasehold interest forming
part of the Charged Property or agree any rent review;
(e) not without the prior consent of the Security Trustee part with
possession of the whole or any part of, or confer on any other person
any right or licence to occupy, or grant any licence to assign or
sub-let land or buildings forming part of the Charged Property;
(f) not without the prior written consent of the Security Trustee allow
any person other than itself to be registered under the Land
Registration Act 1925 as proprietor of the Charged Property or any
part thereof or create or permit to arise any overriding interest (as
specified in section 70(1) of the Land Registration Act 1925)
affecting such property and the reasonable costs incurred by the
Security Trustee of lodging a caution against registration of the
title to such property or a land charge (if unregistered) or any part
thereof, shall be an expense properly incurred in relation to this
security; and
(g) indemnify the Security Trustee (and as a separate covenant any
Receiver or Receivers appointed by it) against all existing and future
rents, taxes, rates, duties, fees, renewal fees, charges, assessments,
impositions and outgoings whatsoever (whether imposed by deed or
statute or otherwise and whether in the nature of capital or revenue
and even though of a wholly novel character) which now or at any time
during the continuance of the security constituted by or pursuant to
this Guarantee and Debenture are properly payable in respect of the
Charged Property or any part thereof or by the owner or occupier
thereof.
9.2 If any such sums as are referred to in Clause 9.1(g) shall be paid by the
Security Trustee (or any Receiver or Receivers) the same shall be
reimbursed by the Chargor to the Security Trustee on demand and until so
reimbursed shall bear interest at the rate of two (2) per cent. above the
Security Trustee's Rate from time to time from the date of payment to the
date of reimbursement (after as well as before any judgment).
10. POWERS OF THE SECURITY TRUSTEE
10.1 At any time after the making of a Demand, or if requested by the Chargor,
the Security Trustee may exercise without further notice and without any of
the restrictions contained in section 103 of the Law of Property Act 1925,
whether or not it shall have appointed a Receiver, all the powers conferred
on mortgagees by the Law of Property Act 1925 and all the powers and
discretions conferred by this Guarantee and Debenture.
10.2 The statutory powers of leasing, letting, entering into agreements for
leases or lettings and accepting and agreeing to accept surrenders of
leases conferred by sections 99 and 100 of the said Act shall not be
exercisable by the Chargor in relation to any part of the Charged Property
without the prior written consent of the Security Trustee. In addition to
such statutory powers the Security Trustee shall have power after serving
the notice referred to in Clause 10.1 to lease or make agreements for
leases at a premium or otherwise and accept surrenders of leases and
generally without any restriction on the kinds of leases and agreements for
leases that the Security Trustee may make and generally without the
necessity for the Security Trustee to comply with any restrictions imposed
by or the other provisions of the said sections 99 and 100. The Security
Trustee may delegate such powers to any person and no such delegation shall
preclude the subsequent exercise or such powers by the Security Trustee
itself or preclude the Security Trustee from making a subsequent delegation
thereof to some other person and any such delegation may be revoked.
10.3 The restriction on the right of consolidating mortgage securities contained
in section 93 of the Law of Property Act 1925 shall not apply to this
Guarantee and Debenture.
10.4 So far as permitted by law, neither the Security Trustee nor any Receiver
shall by reason of it or any Receiver entering into possession of any part
of the Charged Property when entitled so to do be liable to account as
mortgagee in possession or be liable for any loss or realisation or for any
default or omission for which a mortgagee in possession might be liable.
11. APPOINTMENT OF RECEIVER
11.1 At any time after the making of a Demand, or if requested by the Chargor or
after the application to the court for an administration order in relation
to the Chargor under the Insolvency Act 1986 the Security Trustee may
appoint one or more persons to be a Receiver or Receivers of the Charged
Property or any part thereof.
11.2 Subject to Section 45 of the Insolvency Act 1986, the Security Trustee may
remove any Receiver previously appointed hereunder, and appoint another
person or other persons as Receiver or Receivers, either in the place of a
Receiver so removed or who has otherwise ceased to act or to act jointly
with a Receiver or Receivers previously appointed hereunder.
11.3 If at any time and by virtue of any such appointment(s) any two or more
persons shall hold office as Receivers of the same assets or income, each
one of such Receivers shall be entitled (unless the contrary shall be
stated in any of the deed(s) or other instrument(s) appointing them) to
exercise all the powers and discretions hereby conferred on Receivers
individually and to the exclusion of the other or others of them.
11.4 Every such appointment or removal, and every delegation, appointment or
removal by the Security Trustee in the exercise of any right to delegate
its powers or to remove delegates herein contained, may be made in writing
under the hand of any officer of the Security Trustee.
11.5 Every Receiver shall have:
(a) all the powers conferred by the Law of Property Act 1925 on mortgagees
in possession and receivers appointed under that Act:
(b) all the powers specified in Schedule1of the Insolvency Act 1986; and
(c) all the powers of the Security Trustee hereunder.
11.6 In making any sale or other disposal of any of the Charged Property in the
exercise of their respective powers, the Receiver or the Security Trustee
may accept, as and by way of consideration for such sale or other disposal,
cash, shares, loan capital or other obligations, including without
limitation consideration fluctuating according to or dependent upon profit
or turnover and consideration the amount whereof is to be determined by a
third party. Any such consideration may be receivable in a lump sum or by
instalments.
11.7 All moneys received by any Receiver appointed under this Guarantee and
Debenture shall be applied in the following order: (1) in the payment or
the costs, charges and expenses of and incidental to the Receiver's
appointment and the payment of his remuneration; (2) in the payment and
discharge of any outgoings paid and liabilities incurred by the Receiver in
the exercise of any of the powers of the Receiver; (3) in providing for the
matters (other than the remuneration of the Receiver) specified in the
first three paragraphs of Section 109(8) of the Law of Property Act 1925;
(4) in or towards payment of any debts or claims which are required by law
to be paid in preference to the Secured Obligations but only to the extent
to which such debts or claims have such preference; (5) in or towards the
satisfaction of the Secured Obligations in accordance with the terms of the
Intercreditor Agreement, and (6) any surplus shall be paid to the Chargor
or other person entitled thereto. The provisions of this Clause and Clause
11.9 shall take effect as and by way of variation and extension to the
provisions of the said Section 109(8), which provisions as so varied and
extended shall be deemed incorporated herein.
11.8 Every Receiver shall be the agent of the Chargor which shall be solely
responsible for his acts and defaults and for the payment of his
remuneration.
11.9 Every Receiver shall be entitled to remuneration for his services at a rate
to be fixed by agreement between him and the Security Trustee (or, failing
such agreement, to be conclusively fixed by the Security Trustee)
commensurate with the work and responsibilities involved upon the basis of
charging from time to time adopted in accordance with his current practice
or the current practice of his firm and without being limited to the
maximum rate specified in section 109(6) of the Law of Property Act 1925.
12. POWER OF ATTORNEY
12.1 The Chargor hereby irrevocably appoints the following, namely:
(a) the Security Trustee;
(b) each and every person to whom the Security Trustee shall from time to
time have delegated the exercise of the power of attorney conferred by
this Clause; and
(c) any Receiver appointed hereunder and for the time being holding office
as such;
jointly and also severally to be its attorney or attorneys and in its name
and otherwise on its behalf to do all acts and things and to sign, seal,
execute, deliver, perfect and do all deeds, instruments, documents, acts
and things which may be required for carrying out any obligation imposed on
the Chargor by or pursuant to this Guarantee and Debenture (including but
not limited to the obligations of the Chargor under Clause 5.1 and the
statutory covenant referred to in such Clause) and, following the making of
a Demand, for carrying any sale, lease or other dealing by the Security
Trustee or such Receiver into effect, for conveying or transferring
any legal estate or other interest in land or other property or otherwise
howsoever, for getting in the Charged Property, and generally for enabling
the Security Trustee and the Receiver to exercise the respective powers
conferred on them by or pursuant to this Guarantee and Debenture or by law.
The Security Trustee shall have full power to delegate the power conferred
on it by this Clause, but no such delegation shall preclude the subsequent
exercise of such power by the Security Trustee itself or preclude the
Security Trustee from making a subsequent delegation thereof to some other
person; any such delegation may be revoked by the Security Trustee at any
time.
12.2 The power of attorney hereby granted is as regards the Security Trustee,
its delegates and any such Receiver (and as the Chargor hereby
acknowledges) granted irrevocably and for value as part of the security
constituted by this Guarantee and Debenture to secure proprietary interests
in and the performance of obligations owed to the respective donees within
the meaning of the Powers of Attorney Act 1971.
13. PROTECTION OF PURCHASERS
No purchaser or other person dealing with the Security Trustee or its
delegate or any Receiver appointed hereunder shall be bound to see or
enquire whether the right of the Security Trustee or such Receiver to
exercise any of its or his powers has arisen or become exercisable or be
concerned to see whether any such delegation by the Security Trustee shall
have lapsed for any reason or been revoked.
14. CONSOLIDATION OF ACCOUNTS AND SET-OFF
In addition to any general lien or similar rights to which they may be
entitled by operation of law, each of the Secured Parties shall have the
right at any time and without notice to the Chargor to combine or
consolidate all or any of the Chargor's then existing accounts with and
liabilities to each of such Secured Parties and to set off or transfer any
sum or sums standing to the credit of any one or more of such accounts in
or towards satisfaction of any of the liabilities of the Chargor to each of
such Secured Parties on any other account or in any other respect. The
liabilities referred to in this Clause may be actual, contingent, primary,
collateral, several or joint liabilities, and the accounts, sums and
liabilities referred to in this Clause may be denominated in any currency.
15. CURRENCY
For the purpose of or pending the discharge of any of the Secured
Obligations the Security Trustee may, in its sole discretion, convert any
moneys received, recovered or realised in any currency under this Guarantee
and Debenture (including the proceeds of any previous conversion under this
Clause) from their existing currency of denomination into any other
currency in which the Secured Obligations are
denominated at such rate or rates of exchange and at such time as the
Security Trustee thinks fit.
16. APPLICATION
The Chargor shall have no rights in respect of the application by the
Secured Parties of any sums received, recovered or realised by the Security
Trustee under this Guarantee and Debenture.
17. NOTICES
17.1 Without prejudice to any other method of service of notices and
communications provided by law, a demand or notice under this Guarantee and
Debenture shall be in writing signed by an officer or agent of the Security
Trustee and may be served on the Chargor by hand, by post or by facsimile
transmission. Any such notice or communication shall be sent to the address
or number of the Chargor as set out below:
Telecom Security Limited
The Clockhouse
The Campus
Hemel Hempstead
Hertfordshire HPQ 7TL
Facsimile Number: 01442 62129/60121
For the attention of: P Bertram and A Thompson
17.2 Any such notice or communication given by the Security Trustee shall he
deemed to have been received:
(a) if sent by facsimile transmission, with a confirmed receipt of
transmission from the receiving machine, on the business day on which
transmitted or the following business day if transmission is completed
after 5.30 pm;
(b) in the case of a written notice lodged by hand, on the business day of
actual delivery or the following business day if delivered after
normal business hours; and
(c) if posted, on the second business day following the day on which it
was properly dispatched by first class mail postage prepaid.
17.3 Any notice given to the Security Trustee shall he deemed to have been given
only on actual receipt.
18. NEW ACCOUNTS
If the Security Trustee or any other of the other Secured Parties receives
or is deemed to be affected by notice whether actual or constructive of any
subsequent charge or other interest affecting any part of the Charged
Property and/or the proceeds of sale thereof, then each of the Secured
Parties may open a new account or accounts with the Chargor. If any of the
Secured Parties do not open a new account or accounts they shall
nevertheless be treated as if they had done so at the time when the notice
was, or was deemed to be, received and as from that time all payments made
to the Secured Parties shall be credited or be treated as having been
credited to the new account or accounts and shall not operate to reduce the
amount secured by this Guarantee and Debenture at the time when the
Security Trustee or any other of the Secured Parties (as the case may be)
received or was deemed to have received such notice.
19. CONTINUING SECURITY
The security constituted by this Guarantee and Debenture shall be
continuing and shall not be considered as satisfied or discharged by any
intermediate payment or settlement of the whole or any part of the Secured
Obligations and shall be binding until all the Secured Obligations have
been discharged in full to the satisfaction of the Security Trustee and all
of the Secured Parties have ceased to have any obligation whether actual or
contingent to make any credit or accommodation available to any company
within the Group under or pursuant to the Financing Documents.
20. REMEDIES CUMULATIVE ETC.
20.1 The rights, powers and remedies provided in this Guarantee and Debenture
are cumulative and are not, nor are they to be construed as, exclusive of
any rights, powers or remedies provided by law or otherwise.
20.2 No failure on the part of the Security Trustee to exercise, or delay on its
part in exercising, any of its respective rights, powers and remedies
provided by this Guarantee and Debenture or by law (collectively the
"Rights") shall operate as a waiver thereof, nor shall any single or
partial waiver of any of the Rights preclude any further or other exercise
of that one of the Rights concerned or the exercise of any other of the
Rights.
20.3 The Chargor hereby agrees to indemnify the Security Trustee, the Secured
Parties and any Receiver against all losses, actions, claims, costs,
charges, expenses and liabilities incurred by the Security Trustee, the
Secured Parties and by any Receiver (including any substitute delegate
attorney as aforesaid) in relation to this Guarantee and Debenture or the
Secured Obligations (including, without limitation, the costs, charges and
expenses incurred in the carrying of this Guarantee and Debenture into
effect or in the exercise of any of the rights, remedies and powers
conferred hereby or in the perfection or enforcement of the security
constituted hereby or pursuant
hereto or in the perfection or enforcement of any other security for or
guarantee in respect of the Secured Obligations) or occasioned by any
breach by the Chargor of any of its covenants or obligations under this
Guarantee and Debenture. The Chargor shall so indemnify the Security
Trustee, the Secured Parties and any Receiver on demand and shall pay
interest on the sum demanded at the rate per annum of two (2) per cent.
above the Security Trustee's Rate from time to time from the date on which
the same were demanded by the Security Trustee, any Secured Parties or any
Receiver, as the case may be, and any sum so demanded together with any
interest, shall be a charge upon the Charged Property in addition to the
moneys hereby secured.
21. PROVISIONS SEVERABLE
Every provision contained in this Guarantee and Debenture shall be
severable and distinct from every other such provision and if at any time
any one or more of such provisions is or becomes invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
such provisions shall not in any way be affected thereby.
22. THE SECURITY TRUSTEE'S DISCRETION
22.1 Save where expressly stated to the contrary herein, any liberty or power
which may be exercised or any determination which may be made hereunder by
the Security Trustee may be exercised or made in the absolute and
unfettered discretion of the Security Trustee which shall not be under any
obligation to give reasons therefor.
22.2 A certificate by an officer of the Security Trustee as to any sums payable
to the Security Trustee hereunder shall, save in the case of manifest
error, be conclusive and binding.
23. AMENDMENTS
No amendments or waiver of any provision of this Guarantee and Debenture
and no consent to any departure by the Chargor therefrom shall in any event
be effective unless the same shall be in writing and signed or approved in
writing by the Security Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which it was given.
24. LAW
This Guarantee and Debenture shall be governed by and construed in
accordance with the provisions of English law.
25. AMENDMENTS TO SECURED DOCUMENTS
This Guarantee and Debenture shall remain in full force and effect
notwithstanding any amendments or variations from time to time of the
Secured Documents and all references to the Secured Documents herein shall
be taken as referring to the Secured Documents as amended or varied from
time to time (including, without limitation, any increase in the amount of
the Secured Obligations).
26. TRUST
The Security Trustee shall hold the benefit of the covenants, mortgages and
charges given by the Chargor hereto upon trust for the Secured Parties.
27. ASSIGNMENT
The Secured Parties shall have a full and unfettered right to assign or
otherwise transfer the whole or any part of the benefit of this Guarantee
and Debenture to any person to whom all or any part of its rights, benefits
and obligations under the Credit Agreement or the US Loan Notes, as the
case may be, are assigned or transferred in accordance with the provisions
of the Credit Agreement or the US Loan Notes, as the case may be, and the
expression "the Security Trustee" wherever used herein shall be deemed to
include the assignees and other successors, whether immediate or
derivative, of the Security Trustee, who shall be entitled to enforce and
proceed upon this Guarantee and Debenture in the same manner as if named
herein. The Security Trustee shall be entitled to disclose any information
concerning the Chargor to any such assignee or other successor or any
participant or proposed assignee, successor or participant.
IN WITNESS whereof the Chargor has executed this Guarantee and Debenture as
a deed and the Security Trustee has executed this Guarantee and Debenture
under hand with the intention that it be delivered the day and year first
before written.
SCHEDULE 1
GUARANTEE PROVISIONS PURSUANT TO CLAUSE 2
1.1 This Guarantee is a continuing security and shall remain in full force and
effect until all moneys, obligations and liabilities referred to in Clause
2 of this Guarantee and Debenture have been paid, discharged or satisfied
in full notwithstanding the liquidation or other incapacity or any change
in the constitution of any company with the Group or in the name and style
of any of them or any settlement of account or other mater whatsoever.
1.2 This Guarantee is in addition to and shall not merge with or otherwise
prejudice or affect or be prejudiced by any other right, remedy, guarantee,
indemnity or security and may be enforced without first having recourse to
the same or any other bill, note, mortgage, charge, pledge or lien now or
hereafter held by or available to the Security Trustee or the other Secured
Parties.
1.3 Notwithstanding that this Guarantee ceases to be continuing for any reason
whatever the Security Trustee and any of the other Secured Parties may
continue any accounts of any company within the Group or open one or more
new accounts and the liability of the Chargor hereunder shall not in any
manner be reduced or affected by any subsequent transactions or receipts or
payments into or out of any such accounts.
1.4 If any purported obligation or liability of any company within the Group to
any of the Secured Parties which if valid would have been the subject of
this Guarantee is not or ceases to be valid or enforceable against any
company within the Group on any ground whatsoever whether or not known to
the Secured Parties including but not limited to any defect in or want of
powers of any company within the Group or irregular exercise thereof or
lack of authority by any person purporting to act on behalf of any company
within the Group or any legal or other limitation (whether under the
Limitation Acts or otherwise), disability, incapacity or any change in the
constitution of or any amalgamation, reconstruction or liquidation of any
company within the Group, the Chargor shall nevertheless be liable to the
Secured parties in respect of that purported obligation or liability as if
the same were fully valid and enforceable and the Chargor was the principal
debtor in respect thereof. The Chargor hereby agrees to keep the Secured
Parties fully indemnified against all damages, loss, costs and expenses
arising from any failure of any company within the Group to carry out any
such purported obligation or liability.
1.5 The liability of the Chargor shall not be affected nor shall this Guarantee
and Debenture be discharged or diminished by reason of:
(a) any present or future bill, note guarantee, indemnity, mortgage,
charge, pledge, lien or other security or right or remedy held by or
available to the Secured Parties becoming wholly or in part void,
voidable or unenforceable on any ground whatsoever or by the Secured
Parties from
time to time dealing with, exchanging, varying, realising, releasing
or failing to perfect or enforce any of the same; or
(b) the Secured parties compounding with, discharging, releasing or
varying the liability of or granting any time, indulgence or
concession to any company within the Group or any other person or
renewing, determining, varying or increasing any bill, promissory note
or other negotiable instrument, accommodation, facility or transaction
in any manner whatsoever or concurring in, accepting or varying any
compromise, arrangement or settlement or omitting to claim or enforce
payment from any company within the Group or any other person; or
(c) any act or omission which would have discharged or affected the
liability of the Chargor had it been principal debtor instead of
guarantor or by anything done or omitted which bur for this provision
might operate to exonerate the Chargor.
1.6 The Chargor warrants to the Secured Parties that it has not taken or
received and undertakes that it will not take or receive the benefit of any
security from any company within the Group in connection with this
Guarantee and Debenture. If any such security is taken the Chargor hereby
declares that such security and all moneys at any time received in respect
thereof shall be held on trust for the Secured Parties and as security for
the liabilities of the Chargor under this Guarantee.
1.7 The Chargor hereby agrees to pay interest to the Security Trustee for the
account of the Secured Parties on all sums demanded under this Guarantee
and Debenture from the date of demand until actual payment (as well after
as before any judgment) at the rate of two (2) per cent. above the Security
Trustee's Rate calculated on a day to day basis. Such interest shall be
compounded monthly in accordance with the usual practice of the Security
Trustee but without prejudice to the right of the Security Trustee to
require payment of such interest.
1.8 Until the Secured Obligations have been paid, discharged or satisfied in
full, the Chargor hereby waives all rights of subrogation and indemnity
against any company within the Group and agrees not to share in any
security held or moneys received by the Security Trustee or any other
Secured Party on account of the Secured Obligations or (unless so
instructed by the Security Trustee) to claim or prove in competition with
the Secured Parties in the liquidation of any company within the Group in
respect of any moneys paid by the Chargor to the Security Trustee or any
other Secured Party under this Guarantee and Debenture. If the Chargor
receives any payment or other benefit or exercises any set-off or
counter-claim or otherwise acts in breach of this Clause anything so
received and any benefit derived directly or indirectly by the Chargor
therefrom shall be held in trust for the Secured Parties and as security
for the liabilities of the Chargor under this Guarantee and Debenture.
1.9 Any money received in connection with this Guarantee and Debenture may be
placed to the credit of a suspense account with a view to preserving the
right of each of the Secured Parties to prove for the whole of its claim
against any company within the Group or any other person liable or may be
applied by the Secured Parties
in or towards satisfaction of such of the moneys, obligations or
liabilities of the Chargor under this Guarantee and Debenture as the
Security Trustee may from time to time conclusively determine.
1.10 Any release, discharge or settlement between the Chargor and the Security
Trustee shall be conditional upon no security disposition or payment to the
Secured Parties by any company within the Group or any other person being
void, set aside or ordered to be refunded pursuant to any enactment or law
relating to bankruptcy, liquidation or insolvency or for any reason
whatever and if such condition shall not be fulfilled the Security Trustee
shall be entitled to enforce this Guarantee and Debenture subsequently as
if such release, discharge or settlement had not occurred and any such
payment had not been made.
1.11 Unless and until the Secured Parties are satisfied in their absolute
discretion as to the solvency of the Chargor the Secured Parties shall be
entitled to retain any security constituted by or pursuant to Clause 3 of
this Guarantee and Debenture for a period of up to six months after the
payment, discharge or satisfaction of all moneys, obligations and
liabilities that are or may become due, owing or incurred to or in favour
of the Secured Parties from each company within the Group or the Chargor
and notwithstanding any such payment, discharge or satisfaction, in the
event of an act of bankruptcy by or the commencement of winding-up of the
person making such payment or effecting such discharge or satisfaction at
any time within the said period of six months, the Security Trustee shall
be entitled to retain any such security for such further period as the
Security Trustee may determine.
1.12 If this Guarantee is determined or called in by demand made by the Security
Trustee, then the Secured Parties may open a new account or accounts with
any or all companies within the Group; if the Secured Parties do not open a
new account or accounts they shall nevertheless be treated as if they had
done so at the time of determination or calling in and as from that time
all payments made to the Secured Parties shall be credited or be treated as
having been credited to the new account or accounts and shall not operate
to reduce the amount for which this Guarantee is available as security at
that time.
1.13 The Security Trustee shall not be obliged before taking steps to enforce
this Guarantee:
(a) to take action or obtain judgment in any court against any company
within the Group or any other person; or
(b) to make or file any claim in a bankruptcy or liquidation of any
company within the Group or any other person; or
(c) to make, enforce or seek to enforce any claim against any company
within the Group or any other person under any security or other
document, agreement or arrangement.
1.14 All sums due and payable by the Chargor under this Guarantee and Debenture
shall be made in full without set-off or counter-claim and free and clear
of and (subject as
provided in the next sentence) without deduction for or on account of any
future or present Taxes. If:
(a) the Chargor is required by any law to make any deduction or
withholding from any sum payable by the Chargor to the Security
Trustee hereunder; or
(b) the Security Trustee or any other Secured Party is required by law to
make any payment on account of tax (other than tax on its overall net
income) or otherwise, on or in relation to any amount received or
receivable by the Secured Parties hereunder;
then the sum payable by the Chargor in respect of which such deduction,
withholding or payment is required to be made shall be increased to the
extent necessary to ensure that, after the making of such deduction,
withholding or payment, (and after taking account of any deduction,
withholding or payment which is required to be made as a result of the
increase) the Security Trustee receives and retains a net sum equal to the
sum which it and the other Secured Parties would have received and so
retained had no such deduction, withholding or payment been made.
1.15 This Guarantee and Debenture is and will remain the property of the
Security Trustee.
SCHEDULE 2
THE LEGALLY MORTGAGED PROPERTY
EXECUTED as a Deed by )
TELECOM SECURITY )
LIMITED ) PETER BERTRAM, Director
acting by two Directors or )
one Director and its Secretary ) P D STRUDWICK, Secretary
SIGNED for and on behalf of )
LLOYDS BANK Plc ) LESLEY TINSLEY