1
CONFORMED COPY
FACILITIES AGREEMENT
between
INVERESK RESEARCH GROUP LIMITED AND SUBSIDIARIES
and
BEAR STEARNS CORPORATE LENDING INC
as Lender, Arranger, Agent,
Security Trustee and Working Capital Bank
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SENIOR SERIES 1 TERM LOANS
SENIOR SERIES 2 TERM LOANS
C$15,300,000 CAPITAL EXPENDITURE FACILITY AND
L6,000,000 WORKING CAPITAL FACILITY
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[McGRIGOR DONALD SOLISITORS LOGO]
Erskine House
68-73 Queen Street
EDINBURGH
EH2 4NF
Telephone: 0131 226 7777
Facsimile: 0131 226 7700
E-Mail: enquiries@mcgrigors.com
Web Site: http://www.mcgrigors.com
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TABLE OF CONTENTS
CLAUSE HEADING PAGE NO.
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1 DEFINITIONS AND INTERPRETATION.........................................................1
1.1 Definitions............................................................................1
1.2 Construction..........................................................................24
1.3 Currency Conversion...................................................................26
2 THE FACILITIES........................................................................26
2.1 The Facilities........................................................................26
2.2 Lender's rights and obligations.......................................................27
3 PURPOSE AND CONDITIONS PRECEDENT......................................................27
3.1 Purpose...............................................................................27
3.2 Monitoring............................................................................27
3.3 Initial conditions precedent..........................................................27
3.4 Additional Acquisition Term Loans conditions precedent................................28
3.5 Further conditions precedent..........................................................28
3.6 Certain Funds Period..................................................................29
3.7 Maximum number of Loans...............................................................30
3.8 Conditions relating to Capital Expenditure Facility...................................30
4 UTILISATION OF TERM LOANS.............................................................30
4.1 Series 1 Term Facilities, Series 2 Term Facilities and Capital Expenditure Facilities.30
5 RE-DENOMINATION OF ACQUISITION TERM LOANS.............................................31
5.1 Parent's Option.......................................................................31
5.2 Agent's Option........................................................................31
5.3 Notice................................................................................31
5.4 Re-Denomination Amount................................................................32
5.5 Re-Denomination of Commitments........................................................32
6 THE WORKING CAPITAL FACILITY..........................................................32
6.1 Nature of Facility....................................................................32
6.2 Utilisation...........................................................................32
6.3 Optional Currencies...................................................................33
6.4 Exchange rate movements...............................................................34
6.5 FFE Contracts.........................................................................35
6.6 Bank Guarantees.......................................................................35
6.7 Guarantee Request.....................................................................36
6.8 Counter Indemnity from the Borrowers..................................................36
6.9 Counter Indemnity from the Working Capital Lenders....................................37
6.10 Working Capital Banks Participation...................................................37
6.11 Interest on Payments..................................................................38
7 REPAYMENT.............................................................................38
7.1 Repayment of Series 1 Term Facilities.................................................38
7.2 Repayment of Series 2 Term Facilities.................................................39
7.3 Repayment of Capital Expenditure Facility.............................................39
7.4 Repayment of Working Capital Facility.................................................40
8 prepayment and cancellation...........................................................40
8.1 Illegality............................................................................40
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CLAUSE HEADING PAGE NO.
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8.2 Change of control/Listing/Sale........................................................41
8.3 Unapplied Net Proceeds................................................................41
8.4 Insurance Claims......................................................................42
8.5 Relevant Receipts.....................................................................42
8.6 Notice................................................................................43
8.7 Cash Sweep............................................................................43
8.8 Voluntary cancellation................................................................43
8.9 Voluntary prepayment of Series 1 Term Facilities......................................43
8.10 Voluntary Prepayment of Series 2 Term Facilities......................................44
8.11 Voluntary Prepayment of Capital Expenditure Facility..................................44
8.12 Right of repayment and cancellation in relation to a single Lender....................44
8.13 Restrictions..........................................................................45
9 INTEREST ETC..........................................................................45
9.1 Series 1 Term Facilities, Series 2 Term Facilities and Capital Expenditure Facilities.46
9.2 Working Capital Facility..............................................................46
10 Interest Periods......................................................................48
10.1 Selection of Interest Periods.........................................................48
10.2 Changes to Interest Periods...........................................................49
10.3 Non-Business Days.....................................................................49
11 Changes to the calculation of interest................................................49
11.1 Absence of quotations.................................................................49
11.2 Market disruption.....................................................................49
11.3 Alternative basis of interest or funding..............................................50
11.4 Break Costs...........................................................................50
12 Fees..................................................................................51
12.1 Commitment fees.......................................................................51
13 Tax gross up and indemnities..........................................................51
13.1 Definitions...........................................................................51
13.2 Tax gross-up..........................................................................52
13.3 Tax indemnity.........................................................................53
13.4 Tax Credit............................................................................53
13.5 Stamp taxes...........................................................................54
13.6 Value added tax.......................................................................54
14 Increased costs.......................................................................54
14.1 Increased costs.......................................................................54
14.2 Increased cost claims.................................................................54
14.3 Exceptions............................................................................55
15 Other indemnities.....................................................................55
15.1 Currency indemnity....................................................................55
15.2 Other indemnities.....................................................................55
15.3 Indemnity to the Agent................................................................56
16 Mitigation by the FINANCE PARTIES.....................................................56
16.1 Mitigation............................................................................56
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CLAUSE HEADING PAGE NO.
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16.2 Limitation of liability...............................................................56
17 Costs and expenses....................................................................56
17.1 Transaction expenses..................................................................56
17.2 Amendment costs.......................................................................57
17.3 Enforcement costs.....................................................................57
18 Guarantee and indemnity...............................................................57
18.1 Guarantee and indemnity...............................................................57
18.2 Continuing guarantee..................................................................58
18.3 Reinstatement.........................................................................58
18.4 Waiver of defences....................................................................58
18.5 Immediate recourse....................................................................59
18.6 Appropriations........................................................................59
18.7 Deferral of Guarantors' rights........................................................59
18.8 Additional security...................................................................59
19 Representations.......................................................................59
19.1 Status................................................................................60
19.2 Power and Authority...................................................................60
19.3 Binding Obligations...................................................................60
19.4 Non-conflict with other obligation....................................................60
19.5 No default............................................................................60
19.6 No proceedings pending or threatened..................................................60
19.7 No Security...........................................................................61
19.8 Corporate Structure...................................................................61
19.9 No Borrowings.........................................................................61
19.10 Business Plan.........................................................................61
19.11 Reports...............................................................................61
19.12 Transaction Document representations..................................................62
19.13 Target Accounts.......................................................................62
19.14 Taxes.................................................................................62
19.15 Intellectual Property Rights..........................................................62
19.16 Environmental.........................................................................63
19.17 ERISA.................................................................................63
19.18 Licences..............................................................................64
19.19 Material Facts........................................................................64
19.20 Financial statements..................................................................64
19.21 Merger................................................................................65
19.22 Margin Stock..........................................................................65
19.23 Solvency..............................................................................65
19.24 Repetition............................................................................66
19.25 Limitation During Availability Period.................................................66
20 Information undertakings..............................................................66
20.1 Financial Information.................................................................66
20.2 Financial Statements..................................................................67
20.3 Investigation.........................................................................67
21 Financial covenants...................................................................68
21.1 Covenants.............................................................................68
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CLAUSE HEADING PAGE NO.
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21.2 Exchange rate adjustment..............................................................74
22 General undertakings..................................................................74
22.1 Positive Undertakings.................................................................74
22.2 Negative Undertakings.................................................................79
22.3 Ringfenced Undertakings...............................................................82
22.4 Merger - related undertakings.........................................................83
23 Events of Default.....................................................................83
23.1 Non-payment...........................................................................84
23.2 Certain Obligations...................................................................84
23.3 Other Obligations.....................................................................84
23.4 Misrepresentation.....................................................................84
23.5 Cross default.........................................................................84
23.6 Inability to pay debts................................................................84
23.7 Legal Process.........................................................................85
23.8 Insolvency Proceedings................................................................85
23.9 Insolvency order......................................................................85
23.10 Administration........................................................................85
23.11 Repossession of goods.................................................................85
23.12 Analogous proceedings.................................................................85
23.13 Change of Control.....................................................................86
23.14 Management Team.......................................................................86
23.15 Litigation............................................................................86
23.16 Subsidiaries..........................................................................86
23.17 Invalidity............................................................................86
23.18 Change in nature of business..........................................................86
23.19 Licences..............................................................................87
23.20 Qualified Accounts....................................................................87
23.21 Inter Creditor Deed...................................................................87
23.22 ERISA Termination Event...............................................................87
23.23 Material Adverse Effect...............................................................87
23.24 Acceleration..........................................................................87
23.25 Limitation During Availability Period.................................................88
24 Changes to the Lenders................................................................88
24.1 Assignment and Transfers by the Lenders...............................................88
24.2 Obligations...........................................................................88
24.3 Parent undertaking....................................................................88
24.4 Lenders ability to sub-contract.......................................................89
24.5 Limitation of responsibility of Existing Lenders......................................89
24.6 Procedure for transfer................................................................89
24.7 Disclosure of information.............................................................90
25 Changes to the Obligors...............................................................90
25.1 Assignations and transfer by Obligors.................................................90
25.2 Additional Borrowers..................................................................91
25.3 Resignation of a Borrower.............................................................91
25.4 Additional Guarantors.................................................................91
25.5 Repetition of Representations.........................................................92
25.6 Resignation of a Guarantor............................................................92
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CLAUSE HEADING PAGE NO.
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26 SYNDICATION...........................................................................92
26.1 Obligors' undertakings................................................................92
26.2 Costs of Syndication..................................................................93
27 Role of the Agent, THE SECURITY TRUSTEE and the Arranger..............................93
27.1 Appointment of the Agent..............................................................93
27.2 Duties of the Agent...................................................................93
27.3 Role of the Arranger..................................................................93
27.4 No fiduciary duties...................................................................93
27.5 Business with the Group...............................................................94
27.6 Rights and discretions of the Agent...................................................94
27.7 Majority Lenders' instructions........................................................94
27.8 Responsibility for documentation......................................................95
27.9 Exclusion of liability................................................................95
27.10 Lenders' indemnity to the Agent.......................................................95
27.11 Resignation of the Agent..............................................................96
27.12 Confidentiality.......................................................................96
27.13 Relationship with the Finance Parties.................................................96
27.14 Credit appraisal by the Finance Parties...............................................97
27.15 Finance Party's tax status confirmation...............................................97
27.16 Reference Lenders.....................................................................98
27.17 Appointment of the Security Trustee...................................................98
28 Conduct of business by the Finance Parties............................................98
29 Sharing among the Lenders.............................................................98
29.1 Payments to Lenders...................................................................98
29.2 Redistribution of payments............................................................99
29.3 Recovering Lender's rights............................................................99
29.4 Reversal of redistribution............................................................99
29.5 Exceptions............................................................................99
30 Payment mechanics....................................................................100
30.1 Payments to the Agent................................................................100
30.2 Distributions by the Agent...........................................................100
30.3 Distributions to an Obligor..........................................................100
30.4 Clawback.............................................................................100
30.5 Partial payments.....................................................................100
30.6 No set-off by Obligors...............................................................101
30.7 Business Days........................................................................101
30.8 Currency of account..................................................................101
30.9 Change of currency...................................................................102
31 Set-off..............................................................................102
32 Notices..............................................................................102
32.1 Communications in writing............................................................102
32.2 Addresses............................................................................102
32.3 Delivery.............................................................................103
32.4 Notification of address, fax number and telex number.................................104
(v)
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CLAUSE HEADING PAGE NO.
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32.5 English language.....................................................................104
33 ANNOUNCEMENTS........................................................................104
34 Calculations and certificates........................................................104
34.1 Accounts.............................................................................104
34.2 Certificates and Determinations......................................................105
34.3 Day count convention.................................................................105
35 Partial invalidity...................................................................105
36 Remedies and waivers.................................................................105
37 Amendments and waivers...............................................................105
37.1 Required consents....................................................................105
37.2 Exceptions...........................................................................105
38 Governing law........................................................................106
39 Enforcement..........................................................................106
39.1 Jurisdiction of English courts.......................................................106
39.2 Service of process...................................................................106
SCHEDULE 1 The Original Obligors...................................................................107
SCHEDULE 2 The Original Lenders....................................................................108
SCHEDULE 3 Conditions Precedent....................................................................109
SCHEDULE 4 Utilisation Request.....................................................................114
SCHEDULE 5 Selection Notice........................................................................115
SCHEDULE 6 Mandatory Cost Formula..................................................................116
SCHEDULE 7 Form of Transfer Certificates...........................................................118
SCHEDULE 8 Form of Accession Letter................................................................119
SCHEDULE 9 Form of Resignation Letter..............................................................120
SCHEDULE 10 Form of Compliance Certificate.........................................................121
SCHEDULE 11 Timetables.............................................................................122
SCHEDULE 12 Post Merger Group Structure............................................................123
SCHEDULE 13 Form of Guarantee Request..............................................................126
SCHEDULE 14 Clinical Group Members.................................................................127
SCHEDULE 15 Key Man Insurance......................................................................128
SCHEDULE 16 Part 1 Material Companies..............................................................129
SCHEDULE 16 Part 2 Dormant Companies...............................................................130
SCHEDULE 16 Part 3 Overseas Companies..............................................................131
(vi)
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THIS AGREEMENT is dated 22 February 2001 and made between:
(1) INVERESK RESEARCH GROUP LIMITED incorporated in Scotland (Registered
Number 198206) whose registered office is at Elphinstone Research
Centre, Tranent, East Lothian, EH33 2NE (the "PARENT");
(2) INVERESK RESEARCH (CANADA) INC incorporated in Canada with number
3844481 and having its registered office at 1170 Peel Street,
Montreal, Quebec H3B 4S8 ("CANADA HOLDCO");
(3) THE SUBSIDIARIES of the Parent listed in Schedule 1 as original
guarantors (together with the Parent and Canada Holdco the "ORIGINAL
GUARANTORS");
(4) BEAR STEARNS CORPORATE LENDING INC ("ARRANGER");
(5) THE FINANCIAL INSTITUTION stated in Schedule 2 as lender (the
"ORIGINAL LENDER");
(6) BEAR STEARNS CORPORATE LENDING INC as agent of the Lenders (the
"AGENT");
(7) BEAR STEARNS CORPORATE LENDING INC as security trustee for the
Lenders (the "SECURITY TRUSTEE"); and
(8) BEAR STEARNS CORPORATE LENDING INC as Working Capital Bank (the
"WORKING CAPITAL BANK").
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCESSION LETTER" means a document substantially in the form set out
in Schedule 8;
"ACCOUNTANT'S REPORT" means the due diligence report prepared by
Arthur Andersen in the agreed form;
"ADDITIONAL BORROWER" means a company which becomes an Additional
Borrower in accordance with Clause 25.2;
"ADDITIONAL GUARANTOR" means a company which becomes an Additional
Guarantor in accordance with Clause 25.4;
"ADDITIONAL OBLIGOR" means an Additional Borrower or an Additional
Guarantor;
"AFFILIATE" means, in relation to any person, a Subsidiary of that
person or a Holding Company of that person or any other Subsidiary of
that Holding Company;
"AGENT'S SPOT RATE OF EXCHANGE" means, in relation to any amount and
any Facility, the Agent's spot rate of exchange for the purchase of
the relevant currency
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with the Base Currency of the relevant Facility in the London foreign
exchange market at or about 11.00 am on a particular day;
"APPROPRIATE ACCOUNTING PRINCIPLES" means the accounting principles,
policies, standards, practices and bases stated:
(a) with regard to Target Group Companies (and any Subsidiaries
of the Target from time to time other than present
Subsidiaries of the Target), in the Target Accounts; and
(b) with regard to Group Companies other than any falling
within the foregoing paragraph (a), in the Original
Financial Statements;
"APPROVED FINANCIER" means any institution (funding or proposing to
fund the activities of the Clinical Group) approved in writing by the
Agent (such approval not to be unreasonably withheld or delayed);
"ARTICLES" means the Articles of Association of the Parent in the
agreed form and adopted by the Parent on or around the date hereof;
"AUDITORS" means in relation to each Group Company Arthur Andersen,
chartered accountants, of 18 Charlotte Square, Edinburgh EH2 4DF or,
as the case may be, such other reputable firm of chartered
accountants of international repute as shall have been approved in
writing by the Agent and appointed as auditors of the relative member
of the Group;
"AUTHORISATION" means an authorisation, consent, approval,
resolution, licence, exemption, filing or registration;
"AVAILABILITY PERIOD" means:
(a) in relation to the Series 1 Term Facilities and the Series
2 Term Facilities, the period from and including the date
of this Agreement to and including the earliest of:
(i) the Closing;
(ii) the date, if any, upon which the Merger
Agreement terminates; and
(iii) the date falling 12 months (or such longer
period as the Agent may agree) after the signing
of the Merger Agreement;
(b) in relation to the Capital Expenditure Facility, the period
from and including the date of this Agreement to and
including 30 June 2002; and
(c) in relation to the Working Capital Facility, the period
from and including the date of this Agreement to and
including 31 December 2007;
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"AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
Commitment under that Facility minus:
(a) the amount of its participation in any outstanding Loans or
Utilisations under that Facility; and
(b) in relation to any proposed Utilisation, the amount of its
participation in any Loans or Utilisations that are due to
be made under that Facility on or before the proposed
Utilisation Date;
"AVAILABLE FACILITY" means, in relation to a Facility, the aggregate
for the time being of each Lender's Available Commitment in respect
of that Facility;
"BANK GUARANTEE" means a Guarantee issued or undertaken or made or,
as the case may be, proposed to be issued, undertaken or made by the
Working Capital Bank under the Working Capital Facility in the agreed
form;
"BASE CURRENCY" means Sterling in respect of the Parent Series 1
Refinancing Term Facility and the Parent Series 2 Refinancing Term
Facility; US$ until the relevant Re-Denomination Date and thereafter
Canadian Dollars in respect of the Canada Holdco Series 1 Acquisition
Term Facility and the Canada Holdco Series 2 Acquisition Term
Facility; US$ until the relevant Re-Denomination Date and thereafter
Sterling in respect of the Parent Series 1 Acquisition Term Facility
and the Parent Series 2 Acquisition Term Facility; Canadian Dollars
in respect of the Capital Expenditure Facility; and Sterling in
respect of the Working Capital Facility;
"BORROWER" means an Original Borrower or an Additional Borrower
unless it has ceased to be a Borrower in accordance with Clause 25.3;
"BORROWER INDEMNITY" means in relation to a Borrower the indemnity
given by that Borrower to the Working Capital Bank pursuant to Clause
6.8 in respect of a Bank Guarantee;
"BREAK COSTS" means the amount (if any) by which:
(a) the interest which a Lender should have received for the
period from the date of receipt of all or any part of its
participation in a Loan or Utilisation or Unpaid Sum to the
last day of the current Interest Period in respect of that
Loan or Utilisation or Unpaid Sum, had the principal amount
or Unpaid Sum received been paid on the last day of that
Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by
placing an amount equal to the principal amount or Unpaid
Sum received by it on deposit with a leading bank in the
Relevant Interbank Market for a period starting on the
Business Day following receipt or recovery and ending on
the last day of the current Interest Period;
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for general business in London, Montreal and, until
the Re-denomination Date only, New York;
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"BUSINESS PLAN" means the business plan in the agreed form;
"CANADA HOLDCO SERIES 1 ACQUISITION TERM FACILITY" means the term
loan facility made available under this Agreement and described in
Clause 2.1.2(a);
"CANADA HOLDCO SERIES 1 ACQUISITION TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set under its name opposite the words "Canada
Holdco Series 1 Acquisition Term Facility Commitment" in
Schedule 2 (or the relevant Re-denominated Commitment
Amount) and the amount of any other Canada Holdco Series 1
Acquisition Term Facility Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Canada Holdco Series 1 Acquisition Term
Facility Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"CANADA HOLDCO SERIES 1 ACQUISITION TERM FACILITY LOAN" means a loan
made or to be made under the Canada Holdco Series 1 Acquisition Term
Facility or the principal amount outstanding for the time being of
that loan;
"CANADA HOLDCO SERIES 2 ACQUISITION TERM FACILITY" means the term
loan facility made available under this Agreement and described in
Clause 2.1.2(b);
"CANADA HOLDCO SERIES 2 ACQUISITION TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender the amount in the Base
Currency set under its name opposite the words "Canada
Holdco Series 2 Acquisition Term Facility Commitment" in
Schedule 2 (or the relevant Re-Denominated Commitment
Amount) and the amount of any other Canada Holdco Series 2
Acquisition Term Facility Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Canada Holdco Series 2 Acquisition Term
Facility Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"CANADA HOLDCO SERIES 2 ACQUISITION TERM FACILITY LOAN" means a loan
made or to be made under the Canada Holdco Series 2 Acquisition Term
Facility or the principal amount outstanding for the time being of
that loan;
"CANADIAN DOLLARS" and "C$" means the lawful currency of Canada;
"CANADIAN FINANCIAL ASSISTANCE DOCUMENTS" means the documentation
demonstrating satisfaction by Clintrials BioResearches Limited of
s123.66 of the Companies Act (Quebec) in connection with the grant of
the Security Documents to be executed by those companies, in a form
acceptable to the Agent acting reasonably;
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"CANADIAN REPORT ON TITLE" means the report on title in respect of
Clintrials BioResearches Limited's facility at 87 Senneville Road,
Senneville, Quebec, H9X 3R3 to be prepared by Desjardins Ducharme
Stein Monast;
"CAPITAL EXPENDITURE FACILITY" means the term loan facility made
available under this Agreement and described in Clause 2.1.2(c);
"CAPITAL EXPENDITURE FACILITY COMMITMENT" means;
(a) in relation to an Original Lender, the amount in the Base
Currency set under its name opposite the words "Capital
Expenditure Facility Commitment" in Schedule 2 and the
amount of any other Capital Expenditure Facility Commitment
transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Capital Expenditure Facility Commitment
transferred to it under this Agreement,
to the extent not cancelled reduced or transferred by it under this
Agreement;
"CAPITAL EXPENDITURE FACILITY LOAN" means a loan made or to be made
under the Capital Expenditure Facility or the principal amount
outstanding for the time being of that loan;
"CASH COLLATERAL ACCOUNTS" has the meaning given in Clause 6.4.3;
"CLEAN UP DATE" means the date falling three months after Closing;
"CLINICAL GROUP" means those companies listed in Schedule 14 together
with any other members of the Group (other than Inveresk Clinical
Research Limited) engaged in clinical trials operations from time to
time; and "CLINICAL GROUP MEMBERS" shall be construed accordingly;
"CLOSING" shall have the meaning ascribed thereto in the Merger
Agreement;
"COMMITMENT" means a Parent Series 1 Refinancing Term Facility
Commitment, a Parent Series 2 Refinancing Term Facility Commitment, a
Parent Series 1 Acquisition Term Facility Commitment, a Parent Series
2 Acquisition Term Facility Commitment, a Canada Holdco Series 1
Acquisition Term Facility Commitment a Canada Holdco Series 2
Acquisition Term Facility Commitment, a Capital Expenditure Facility
Commitment or a Working Capital Facility Commitment;
"COMMON STOCK PRICE" shall have the meaning given thereto in the
Merger Agreement;
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form set out in Schedule 10;
"DEFAULT" means an Event of Default or any event or circumstance
which would (with the expiry of a grace period, the giving of any
notice, the making of any determination, lapse of time and/or the
satisfaction of any of the conditions, in each case under Clause 23)
be an Event of Default;
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"DISTRIBUTION" means any dividend or other distribution whether in
cash or in specie which is declared or due and whether or not
actually paid;
"DORMANT COMPANIES" means any Group Company which has not traded or
has ceased trading (all such companies as at the date of execution of
this Agreement being listed in Part 2 of Schedule 16);
"DRAWDOWN DATE" means the date of first drawdown under the Series 1
Term Facilities or the Series 2 Term Facilities;
"EMPLOYEE BENEFIT PLAN" means any employees benefit plan within the
meaning of Section 3(3) of ERISA which:
(a) is maintained for employees of any Borrower or any ERISA
Affiliate; or
(b) has at any time within the preceding six years been
maintained for the employees of any Borrower or any current
or former ERISA Affiliate;
"ENVIRONMENT" means all or any gases, airs, vapours, liquids, land
(including building and any other structures, enclosures or erections
in, on or under it and any rock or soil and anything below the
surface of it), flora, fauna, wetlands, land covered with water and
water (including sea, ground and surface water) and all other nature
resources of any kind;
"ENVIRONMENTAL LAW" means all or any laws, statutes, treaties,
regulations, directives, ordinances, rules publicly available codes
of practice, circulars, guidance and notices having legal or judicial
import or effect whether of a criminal, civil or administrative
nature and the rules of common law concerning:
(a) pollution or contamination of the Environment;
(b) harm, whether actual or potential, to mankind and human
sense, living organisms and ecological systems;
(c) the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport
or handling of Dangerous Substances; and
(d) the emission, leakage, release or discharge into the
Environment of noise, vibration, dusts, fumes, gas, odours,
smoke, steam effluvia, heat, light, radiation (of any
kind), infection, electricity or any Dangerous Substance
and any matter or thing capable of constituting a nuisance
or an actionable wrong of any kind in respect of such
matters;
for these purposes "DANGEROUS SUBSTANCE" means any radioactive
emissions and any natural or artificial substance (whether in solid
or liquid form or in the form of a gas or vapour and whether alone or
in combination with any other substance) capable of causing harm to
man or any other living organism or damaging the Environment or
public health or welfare, including (without limitation) any
controlled, special, hazardous, toxic, radioactive or dangerous
waste;
"ENVIRONMENTAL REPORT" means the report in agreed form prepared by
Marsh UK Ltd;
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"EQUITY DOCUMENTS" means the Investment Agreement, the Articles and
the Loan Stock Instrument;
"EQUIVALENT AMOUNT" means in respect of any Loan requiring to be
re-denominated pursuant to Clause 5 an amount in Canadian Dollars or
Sterling (as appropriate having regard to the required currency of
re-denomination) which could be purchased with the relevant amount of
US$ at the Agent's spot buying rate for Canadian Dollars or Sterling
against US$ at or about 11.00 am on the second Business Day preceding
the Re-denomination Date;
"ERISA" means the Employee Retirement Income Security Act of 1974 (of
the United States of America), and the rules and regulations
thereunder, each as amended, supplemented or otherwise modified;
"ERISA AFFILIATE" means any person who together with any Borrower or
Group Company is treated as a single employer within the meaning of
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA;
"EVENT OF DEFAULT" means any event or circumstance specified as such
in Clause 23;
"EXISTING INVERESK FACILITIES" means those facilities made available
to the Parent pursuant to a Facilities Agreement dated 4 September
1999;
"FACILITY" means any Series 1 Term Facility, any Series 2 Term
Facility, the Capital Expenditure Facility, or the Working Capital
Facility;
"FACILITY OFFICE" means the office or offices notified by a Lender to
the Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five Business Days' written
notice) as the office or offices through which it will perform its
obligations under this Agreement;
"FFE AMOUNT" means that amount of Canadian Dollars or Sterling, as
appropriate, required in terms of the FFE Contract to purchase the
relevant amount of US Dollars;
"FFE CONTRACT" means any forward foreign exchange contract entered
into pursuant to Clause 22.1.3(p);
"FINAL REPAYMENT DATE" means:
(a) in respect of each Series 1 Term Facility, 31 December
2007;
(b) in respect of each Series 2 Term Facility, 31 December
2008;
(c) in respect of the Capital Expenditure Facility, 31 December
2007;
(d) in respect of the Working Capital Facility 31 December
2007;
"FINANCE DOCUMENT" means this Agreement, any Fee Letter, any
Accession Letter, each Security Document, the Inter Creditor
Agreement any Hedging Agreement and any other document designated as
such by the Agent and the Parent;
"FINANCE LEASE" means any lease, hire agreement, credit sale
agreement, purchase agreement, conditional sale agreement or
instalment sale and purchase agreement
7
15
which should be treated in accordance with Applicable Accounting
Principles as a finance lease or in the same way as a finance lease;
"FINANCE PARTY" means the Agent, the Security Trustee, the Arranger,
a Lender, a Working Capital Bank or the Working Capital Bank;
"FINANCE PERIOD" means the period from the date of this Agreement
until the first date on which none of the Finance Parties or the
Obligors has actual or contingent liabilities or obligations under
any of the Finance Documents;
"FINANCIAL COVENANTS" means the covenants contained in Clause 21;
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:
(a) monies borrowed;
(b) any amount raised by acceptance under any acceptance credit
facility;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be
treated as a Finance Lease;
(e) receivables sold or discounted (other than any receivables
to the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including
any forward sale or purchase agreement) having the
commercial effect of a borrowing;
(g) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate
or price (and, when calculating the value of any derivative
transaction at any time, only the cost on termination or
closing out on the basis of the then marked to market value
of the relevant derivative transaction shall be taken into
account);
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or
any other instrument issued by a bank or financial
institution; and
(i) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraph (a)
to (h) above;
but without double counting in any case;
"FULL GROUP SECURITY" means in respect of an Obligor a guarantee in
favour of the Security Trustee as it or the Agent may require (in
each case in form and substance satisfactory to the Security Trustee)
from the relevant Obligor in respect of the obligations of each
Obligor to the Finance Parties under the Finance Documents, security
documentation constituting such fixed and/or floating security
interests in respect of the relevant Obligor's assets as the Agent or
the Security Trustee may reasonably require and such other supporting
documents as the Agent or the Security Trustee may reasonably
require;
8
16
"GAAP" means in relation to a company incorporated in any
jurisdiction generally accepted accounting policies in the relevant
jurisdiction;
"GROUP" means the Parent and its Subsidiaries for the time being and
"GROUP COMPANY" or "MEMBER OF THE Group" means any one of them (and,
for the avoidance of any doubt, no company shall be a member of the
Group until it becomes a Subsidiary of a member of the Group);
"GUARANTEE" means any guarantee, bond, indemnity, letter of credit,
documentary or other credit, or other obligation to pay, purchase,
provide funds to cover, or ensure against financial loss in respect
of Financial Indebtedness of any other person and any obligation to
invest in, make advances to or maintain the solvency or financial
condition of any other person in connection with or by reference to
the Financial Indebtedness of that person;
"GUARANTEE REQUEST" means a request substantially in the form set out
in Schedule 13;
"GUARANTEED AMOUNT" means in relation to a Bank Guarantee denominated
in Sterling, the maximum aggregate amount of the actual and
contingent liabilities of the Working Capital Bank under that Bank
Guarantee at the relevant time and in relation to a Bank Guarantee
denominated in the Optional Currency, the Sterling Equivalent of the
maximum aggregate amount of the actual and contingent liabilities of
the Working Capital Bank under that Bank Guarantee at the relevant
time;
"GUARANTOR" means an Original Guarantor or an Additional Guarantor,
unless it has ceased to be a Guarantor in accordance with Clause
25.6;
"HEDGING AGREEMENTS" means any agreements entered into for the
purpose of managing or hedging currency and/or interest rate
obligations;
"HOLDING COMPANY" means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary;
"INSOLVENCY EVENT" means, subject to the terms of Clause 3.6.3, any
of the events specified in any of Clauses 23.6-23.12 (inclusive);
"INSURANCE REPORT" means the report in agreed form prepared by Marsh
UK Ltd and Marsh Inc;
"INTELLECTUAL PROPERTY RIGHTS" means all know-how, patents, patent
applications, trade marks, community trade marks, service marks,
trade names, brand names, business names, registered designs,
copyright and all other industrial and intellectual property rights
and any interests (including by way of licence) in any of the
foregoing (in each case whether registered or not and including all
applications for the same);
"INTER CREDITOR DEED" means the inter creditor agreement in the
agreed form between the Finance Parties, the Parent certain Group
Companies and the Investors (as defined therein);
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"INTEREST PERIOD" means, in relation to a Loan, each period
determined in accordance with Clause 10 and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 9.1.3;
"INTRA GROUP TRANSFER" means the proposed transfer by Target Company
to Canada Holdco of the entire issued share capital of Clintrials Bio
Research Limited;
"INVESTMENT AGREEMENT" means the agreement so entitled dated on or
around the date of this Agreement between inter alia the Parent,
Walter Nimmo and others as Existing Managers, the ESOP Trustees (as
defined therein) and the Investors (as defined therein);
"ISSUE DATE" means in relation to a Bank Guarantee the date on which
it is issued pursuant to the terms thereof;
"KEYMAN INSURANCE" means the keyman life assurance policies to be
maintained by the Parent in respect of the death, critical illness or
disability of the persons specified in Schedule 15;
"LEGAL REPORT" means the report in agreed form by Clifford Chance;
"LENDER" means:
(a) any Original Lender; and
(b) any bank or financial institution which has become a Party
in accordance with Clause 24,
which in each case has not ceased to be a Party in accordance with
the terms of this Agreement;
"LENDER INDEMNITY" means in relation to a Lender, the indemnity given
by that Lender to the Working Capital Bank under Clause 6.9 and
"LENDER INDEMNITIES" shall be construed accordingly;
"LIBOR" means, in relation to any amount for which the rate is to be
determined:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the relevant currency
for the Interest Period of that Loan) the arithmetic mean
of the rates (rounded upwards to four decimal places) as
supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the London interbank
market,
as of the Specified Time on the Quotation Day for the offering of
deposits in the relevant currency and for a period comparable to the
period for which such rate is to be determined;
"LISTING" means the admission to the Official List of London Stock
Exchange PLC of any shares of any member of the Group or the granting
of permission for any such shares to be dealt in or on any recognised
investment exchange (within the meaning of Section 207 of the
Financial Services Act 1986) or any other market for the public
trading of securities in any country or a reverse takeover (within
the meaning contained in the publication by the UK listing authority
entitled "The
10
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Listing Rules" current at the date of this Agreement) by any member
of the Group of another company whose shares are already the subject
of a Listing;
"LOAN" means a Series 1 Term Facility Loan, a Series 2 Term Facility
Loan or a Capital Expenditure Facility Loan;
"LOAN STOCK" means the L71,771,981 Unsecured Subordinated Loan Stock
2008 constituted by the Loan Stock Instrument or, as the case may be,
the principal amounts represented by them and for the time being
issued and outstanding;
"LOAN STOCK INSTRUMENT" means the loan stock instrument dated 20
September 1999 by the Parent as supplemented by the supplemental
instrument in the agreed form to be granted by the Parent;
"MAJORITY LENDERS" means:
(a) if there are no Loans, Working Capital Loans or
Utilisations then outstanding, a Lender or Lenders whose
Commitments aggregate more than 662/3% of the Total
Commitments (or, if the Total Commitments have been reduced
to zero, aggregated more than 662/3% of the Total
Commitments immediately prior to the reduction); or
(b) at any other time, a Lender or Lenders whose participations
in the Loans, Working Capital Loans and Utilisations then
outstanding aggregate more than 662/3% of all the Loans,
Working Capital Loans and Utilisations then outstanding;
"MANAGEMENT ACCOUNTS" means:
(a) the management accounts for each Group Company for each
Management Accounting Period in the agreed form which shall
include a profit and loss account for the Management
Accounting Period and the financial year to date;
(b) a balance sheet as at the last day of the relevant
Management Accounting Period;
(c) a cash flow for the Management Accounting Period and
financial year to date; and
(d) key performance indicators for each Management Accounting
Period, together with a commentary by the finance director
of the Parent, in particular comparing actual performance
to relevant Operating Budget and providing a review of the
outstanding order book;
"MANAGEMENT ACCOUNTING PERIOD" means each period incorporating all or
substantially all of each calendar month and (unless otherwise agreed
by the Agent) not being less than four nor more than five weeks in
duration;
"MANAGEMENT TEAM" means all and each of Stewart G Leslie, Nick
Thornton, Dr Walter S Nimmo, Mike Ankcorn, Paul Bancroft, Dr Ian P
Sword, and/or such other persons as shall be agreed between the Agent
and the Parent;
"MANDATORY COSTS" means the percentage rate per annum calculated by
the Agent in accordance with Schedule 6;
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"MANDATORY PREPAYMENT EVENT" means any event set out in Clauses 8.1
or 8.2;
"MARGIN" means subject to the terms of this Agreement:
(a) in respect of a Series 1 Term Facility Loan, 2.25% per
annum;
(b) in respect of a Series 2 Term Facility Loan, 2.75% per
annum;
(c) in respect of a Capital Expenditure Facility Loan, 2.75%
per annum; and
(d) in respect of the Working Capital Facility, 2.25% per
annum;
"MARKET REPORT" means the report in the agreed form dated on or
around the date hereof by Technomark Consulting Services in relation
to the business of the Target Group;
"MATERIAL ADVERSE EFFECT" means an event or matter:
(a) having, or reasonably likely to have a material adverse
effect on the financial condition, assets, revenues of the
Group taken as a whole; or
(b) having a material adverse effect on the ability of the
Parent or any Group Company either to perform in a timely
manner all or any of its payment obligations under any of
the Finance Documents or to comply with the Financial
Covenants; or
(c) (where the context so admits) resulting in all or any of
the Security Documents not providing the Security Trustee
(on behalf of the Lenders) with effective enforceable
security over the assets expressed to be charged by the
relevant Security Document or Security Documents to an
extent reasonably considered to be material by the Majority
Lenders;
"MATERIAL COMPANY" means a Group Member which is trading and has net
assets (ignoring intra group assets and liabilities) in excess of
L500,000 (all the companies listed in Part 1 of Schedule 16 being the
Material Companies as at the date of execution of this Agreement);
"MERGER" means the merger of US Newco with the Target, as described
in the Merger Agreement;
"MERGER AGREEMENT" means the Agreement and Plan of Merger dated on or
around the date hereof between the Parent, US Newco and the Target;
"MERGER DOCUMENTS" means the Merger Agreement, the Stockholders
Agreement and all other documents executed in connection with either
of those documents;
"MERGER RELATED UNDERTAKINGS" means those undertakings in Clauses
22.4.1;
"MINIMUM CONDITION" shall have the meaning given thereto in the
Merger Agreement;
"MONTH" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar
month, except that:
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(a) (subject to paragraph (c) below) if the numerically
corresponding day is not a Business Day, that period shall
end on the next Business Day in that calendar month in
which that period is to end if there is one, or if there is
not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the
calendar month in which that period is to end, that period
shall end on the last Business Day in that calendar month;
and
(c) if an Interest Period begins on the last Business Day of a
calendar month, that Interest Period shall end on the last
Business Day in the calendar month in which that Interest
Period is to end.
The above rules will only apply to the last Month of any period.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower, any Group Company
or any ERISA Affiliate is making or is accruing an obligation to
make, contributions within the preceding six years;
"NET PROCEEDS" means the consideration received by any Group Company
in respect of a disposal which is not a Permitted Disposal of any
fixed asset or interest therein after deducting any Taxation
resulting from such disposal and costs reasonably incurred by such
Group Company in making the disposal;
"OBLIGOR" means a Borrower or a Guarantor;
"OPERATING BUDGET" means:
(a) in relation to the period starting not later than the date
of this Agreement and ending on the production of the first
Operating Budget pursuant to Clause 20.1(c) the Business
Plan; and
(b) in relation to each successive 12 month period thereafter:-
(i) a projected balance sheet;
(ii) a projected profit and loss account;
(iii) a projected cash flow statement;
(iv) a projected capital expenditure budget; and
(v) projected calculations relating to each
Financial Covenant,
on a 12 month and Management Accounting Period basis together with a
commentary from the finance director of the Parent drawing on the
previous period's performance and forecast market conditions;
"OPTIONAL CURRENCY" means in respect of the Working Capital Facility
Canadian Dollars or any other currency approved by the Agent in its
absolute discretion;
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"ORIGINAL BORROWER" means:
(a) in respect of each of the Parent Series 1 Refinancing Term
Facility, the Parent Series 2 Refinancing Term Facility,
the Parent Series 1 Acquisition Term Facility and the
Parent Series 2 Acquisition Term Facility, the Parent;
(b) in respect of the Canada Holdco Series 1 Acquisition Term
Facility and the Canada Holdco Series 2 Acquisition Term
Facility, Canada Holdco;
(c) in respect of the Capital Expenditure Facility, Canada
Holdco and Clintrials BioResearches Limited; and;
(d) in respect of the Working Capital Facility, the Parent and
Canada Holdco;
"ORIGINAL FINANCIAL STATEMENTS" means:
(a) in relation to the Parent, the audited consolidated
financial statements of the Group for the 24 week period
ended 26 December 1999; and
(b) in relation to each Original Obligor other than the Parent,
its audited financial statements (if any) for the period
ended 26 December 1999;
"ORIGINAL GUARANTOR" means the Parent, Inveresk Research Holdings
Ltd, Inveresk Research International Ltd, Inveresk Clinical Research
Ltd and those Group Members listed as such in Schedule 1;
"ORIGINAL OBLIGOR" means an Original Borrower or an Original
Guarantor;
"OVERSEAS COMPANIES" means those Group Companies listed as such in
Schedule 16 Part 3;
"PARENT SERIES 1 ACQUISITION TERM FACILITY" means the term loan
facility made available under this Agreement and described in Clause
2.1.1(c);
"PARENT SERIES 1 ACQUISITION TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set under its name opposite the words "Parent
Series 1 Acquisition Term Facility Commitment" in Schedule
2 (or the relevant Re-denominated Commitment Amount) and
the amount of any other Parent Series 1 Acquisition Term
Facility Commitment transferred to it under this Agreement;
and
(b) in relation to any other Lender, the amount is the Base
Currency of any Parent Series 1 Acquisition Term Facility
Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"PARENT SERIES 1 ACQUISITION TERM FACILITY LOAN" means a loan made or
to be made under the Parent Series 1 Acquisition Term Facility or the
principal amount outstanding for the time being of that loan;
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"PARENT SERIES 1 REFINANCING TERM FACILITY" means the term loan
facility made available under this Agreement and described in Clause
2.1.1(a);
"PARENT SERIES 1 REFINANCING TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set under its name opposite the words "Parent
Series 1 Refinancing Term Facility Commitment" in Schedule
2 (or the relevant Re-denominated Commitment Amount)and the
amount of any other Parent Series 1 Refinancing Term
Facility Commitment transferred to it under this Agreement;
and
(b) in relation to any other Lender, the amount is the Base
Currency of any Parent Series 1 Refinancing Term Facility
Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"PARENT SERIES 1 REFINANCING TERM FACILITY LOAN" means a loan made or
to be made under the Parent Series 1 Acquisition Term Facility or the
principal amount outstanding for the time being of that loan;
"PARENT SERIES 2 ACQUISITION TERM FACILITY" means the term loan
facility made available under this Agreement and described in Clause
2.1.1(d);
"PARENT SERIES 2 ACQUISITION TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender the amount in the Base
Currency set under its name opposite the words "Parent
Series 2 Acquisition Term Facility Commitment" in Schedule
2 and the amount of any other Parent Series 2 Acquisition
Term Facility Commitment transferred to it under this
Agreement; and
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(b) in relation to any other Lender, the amount is the Base
Currency of any Parent Series 2 Acquisition Term Facility
Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"PARENT SERIES 2 ACQUISITION TERM FACILITY LOAN" means a loan made or
to be made under the Parent Series 2 Acquisition Term Facility or the
principal amount outstanding for the time being of that loan;
"PARENT SERIES 2 REFINANCING TERM FACILITY" means the term loan
facility made available under this Agreement and described in Clause
2.1.1(b);
"PARENT SERIES 2 REFINANCING TERM FACILITY COMMITMENT" means:
(a) in relation to an Original Lender the amount in the Base
Currency set under its name opposite the words "Parent
Series 1 Refinancing Term Facility Commitment" in Schedule
2 and the amount of any other Parent Series 2 Refinancing
Term Facility Commitment transferred to it under this
Agreement; and
(b) in relation to any other Lender, the amount is the Base
Currency of any Parent Series 2 Refinancing Term Facility
Commitment transferred to it under this Agreement;
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"PARENT SERIES 2 REFINANCING TERM FACILITY LOAN" means a loan made or
to be made under the Parent Series 2 Refinancing Term Facility or the
principal amount outstanding for the time being of that loan;
"PARTY" means a party to this Agreement and includes its successors
in title, permitted assignees and permitted transferees;
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV or
ERISA or Section 412 of the Code and which:
(a) is maintained for employers of any Borrower, Group Company
or ERISA Affiliate; or
(b) has at any time within the preceding six years been
maintained for the employees of any Borrower, Group Company
or current or former ERISA Affiliate.
"PENSIONS REPORT" means the report in agreed form prepared by William
M Mercer Inc and William M Mercer Ltd;
"PERMITTED APPLICATION" means in respect of any Net Proceeds either:
(a) the acquisition of a replacement fixed asset of the same or
a similar type and of comparable or superior value and
quality; or
(b) the acquisition of a fixed asset the commercial purpose and
effect of which is to replace or improve upon the
commercial purpose and effect of the fixed asset disposed
of;
"PERMITTED DISPOSAL" means:
(i) any sale or disposal of assets expressed in any
Security Documents to be charged by way of
floating charge only and which is a sale or
disposal in the ordinary course of trading
activities and for market-value on an
arms-length basis for consideration payable in
cash on normal commercial terms other than any
sale or other disposal of any heritable, real or
leasehold property;
(ii) any sale or disposal of assets expressed in any
Security Documents to be charged by way of
floating charge only and which are obsolete or
redundant and have a nominal or scrap value
only;
(iii) a sale or disposal to an Obligor or a disposal
by a Group Company which is not an Obligor to
another Group Company
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which is an Obligor provided the transferee has
granted Full Group Security;
(iv) any disposal on arm's length terms where the
aggregate value of the assets the subject of the
disposal by Group Companies in any 12 month
period other than in accordance with paragraphs
(i) to (iii) above in any financial year does
not exceed L250,000 (based on the higher of book
value or consideration);
Provided in each case that any monies thereby received by the member
of the Group making the sale or disposition are credited to an
account with the Agent but for the avoidance of doubt such monies
will not be treated as Unapplied Net Proceeds;
"PERMITTED FINANCIAL INDEBTEDNESS" means Financial Indebtedness:
(a) of the Group from time to time under this Agreement;
(b) under the Loan Stock Instrument;
(c) arising between Group Companies where each has granted Full
Group Security;
(d) arising under Hedging Agreements entered into by any Group
Company;
(e) under any lease or hire purchase contract which would in
accordance with GAAP be treated as a Finance Lease in terms
of which assets with an aggregate outstanding capital value
not exceeding US$3,000,000 (or such greater amount as the
Agent may from time to time agree) are hired or leased;
(f) of Clinical Group Members owed to an Approved Financier in
an aggregate principal amount not exceeding US$5,000,000;
(g) the letter of credit referred to in Clause 22.1.10 (subject
always to the Parent's compliance with its obligations
under that Clause);
(h) of Clinical Group Members to Bank of America (subject
always to the Parent's compliance with its obligations
under Clause 22.1.9);
(i) approved in writing by the Agent;
"PERMITTED SECURITY INTEREST" means:-
(a) rights of retention of title and liens which are implied by
law or custom of trade or are incorporated in the standard
terms of contract of another contracting party and which
arise in any such case in the ordinary course of trade of
any Group Company;
(b) any liens and rights of set off arising by operation of law
in the ordinary course of trading of any Group Company;
(c) any Security which the Agent has at any time in writing
agreed shall be a Permitted Security Interest;
(d) any Security created under the Finance Documents;
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(e) any Security created by any court order in favour of the
plaintiff or the defendant in any action as security for
costs or expenses provided the relevant Group Company is
pursuing or defending such action in the bona fide
interests of that Group Company and provided further that
such action is not an Event of Default or Default;
(f) any Security other than otherwise permitted under this
Agreement securing Financial Indebtedness in an aggregate
principal amount not exceeding L250,000;
(g) any Security over credit balances and bank accounts of
members of the Clinical Group with an Approved Financier
created in order to facilitate the operation of such bank
accounts and other bank accounts of such members of the
Clinical Group with such Approved Financier on a net
balance basis with credit balances and debit balances on
the various accounts being netted off for interest
purposes;
(h) any Security held by an Approved Financier over assets of
members of the Clinical Group;
(i) any Security held by Bank of America in respect of assets
of Clinical Group Members and any Security held by The
Royal Bank of Canada in respect of assets of Clintrials
BioResearches Limited (subject always to the Parent's
compliance with its obligations under Clause 22.1.9);
"PRIMARY DEFAULT" means:-
(a) the occurrence of an Insolvency Event;
(b) a breach of any Merger Related Undertaking;
(c) an Event of Default in terms of Clause 23.17;
(d) a breach of Clause 22.1.3(p);
"PRIMARY WARRANTIES" means those representations and warranties in
Clauses 19.1, 19.2, and 19.3;
"PROPERTY" means Elphinstone Research Centre, Tranent, East Lothian;
The Origo Centre, Riccarton, Midlothian; and 46 Millar Crescent,
Edinburgh;
"QUALIFYING LENDER" has the meaning given to it in Clause 13;
"QUOTATION DAY" means, in relation to any period for which an
interest rate is to be determined, two Business Days before the first
day of that period unless market practice differs in the Relevant
Interbank Market, in which case the Quotation Day will be determined
by the Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations would normally be given by
leading banks in the Relevant Interbank Market on more than one day,
the Quotation Day will be the last of those days);
"RE-DENOMINATED COMMITMENT AMOUNT" bears the meaning given to it in
Clause 5.5;
"RE-DENOMINATION DATE" bears the meaning given to it in Clause 5.3 ;
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"RE-DENOMINATION PERIOD" means the period of one month from Closing;
"REFERENCE BANKS" means the principal London offices of such banks as
may be appointed by the Agent in consultation with the Parent;
"RELEVANT DISPOSAL" means a disposal of fixed assets or groups of
fixed assets by a member of the Ringfenced Group the net proceeds of
which are at least L500,000, not being a disposal from one Obligor to
another;
"RELEVANT INTERBANK MARKET" means the London interbank market;
"REPAYMENT DATE" means a Series 1 Term Facilities Repayment Date, a
Series 2 Term Facilities Repayment Date or a Capital Expenditure
Facility Repayment Date as the context may require;
"REPAYMENT INSTALMENT" means a Series 1 Term Facility Repayment
Instalment, a Series 2 Term Facility Repayment Instalment or a
Capital Expenditure Facility Repayment Instalment as the context may
require;
"REPEATING REPRESENTATIONS" means each of the representations given
pursuant to Clause 19 save for those in Clauses 19.5.2 (in respect of
a Default only), 19.6, 19.10, 19.11, 19.12, 19.13, 19.17, 19.20,
19.21, 19.22 and 19.23;
"REPORTS" means the Accountants Report, the Environmental Report, the
Insurance Report, the Pensions Report, Legal Report, Market Report
and Canadian Report on Title;
"RESERVATIONS" means the principle that equitable remedies are
remedies which may be granted or refused at the discretion of the
court and damages may be regarded as an adequate remedy, the
limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, administration
and other laws generally affecting the rights of creditors, the
time-barring of claims under the Limitation Acts (and similar
legislation), the possibility that an undertaking to assume liability
for or to indemnify a person against non-payment of stamp duty may be
void, the fact that a court may refuse to give effect to a purported
contractual obligation to pay costs imposed upon another party in
respect of the costs of any unsuccessful litigation brought against
that party or may not award by way of costs all of the expenditure
incurred by a successful litigant in proceedings brought before that
court, or that a court may stay proceedings if concurrent proceedings
based on the same grounds and between the same parties have
previously been brought before another court, that a court may not
give effect to the provisions of Clause 35 (or any similar provision
in another Finance Document) and that interest at a default rate on
overdue amounts may be a penalty and not recoverable;
"RESIGNATION LETTER" means a letter substantially in the form set out
in Schedule 9;
"RINGFENCED GROUP" means the Group other than the Clinical Group
Members and "RINGFENCED GROUP MEMBERS" shall be construed
accordingly;
"SALE" means a sale of all or substantially all of the issued share
capital of the Parent or a sale of all or substantially all of the
business and assets of the Group;
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"SCREEN RATE" means the British Bankers' Association Interest
Settlement Rate for dollars for the relevant period displayed on the
appropriate page of the Reuters screen. If the agreed page is
replaced or service ceases to be available, the Agent may specify
another page or service displaying the appropriate rate after
consultation with the Parent and the Lenders;
"SECOND STAGE SECURITY" means:
(a) pledge/charge by Canada Holdco in respect of the entire
issued stock of Target;
(b) Guarantor Accession Letter by Clintrials BioResearches
Limited;
(c) deed of hypothecation by Clintrials BioResearches Limited;
(d) Canadian Financial Assistance Documents;
each in the form agreed by the parties acting reasonably;
"SECURITY" means a mortgage, charge, pledge, lien, floating charge,
standard security, debenture, hypothec or other security interest
securing any obligation of any person or any other agreement or
arrangement having a similar effect;
"SECURITY ACCOUNT" means such account (bearing interest at an
appropriate market rate) with the Agent in the name of the relevant
Group Company into which any sums are to be paid in accordance with
this Agreement and which is subject to such security or other payment
or blocking or designation arrangements as the Agent may reasonably
require;
"SECURITY DOCUMENTS" means the Security Documents to be granted by
each Obligor to the Security Trustee and listed in Schedule 3 and all
other documents from time to time creating, evidencing or granting
Security in favour of the Finance Parties (or any of them) and
granted by the Obligor as security for the obligations of the
Obligors to the Lenders from time to time under any of the Finance
Documents and "Security Document" shall be construed accordingly;
"SECURITY TRUSTEE" means Bear Stearns Corporate Lending Inc in its
capacity as security trustee of the Security Documents under and in
terms of Clause 27.17 and its successors and assigns in that
capacity;
"SELECTION NOTICE" means a notice substantially in the form set out
in Schedule 5 given in accordance with Clause 10 in relation to a
Facility;
"SERIES 1 TERM FACILITIES" means each and all of the Parent Series 1
Refinancing Term Facility, the Parent Series 1 Acquisition Term
Facility and the Canada Holdco Series 1 Acquisition Term Facility;
"SERIES 1 TERM FACILITY LOAN" means a loan made or to be made under
any Series 1 Term Facility or the principal amount outstanding for
the time being of that loan;
"SERIES 2 TERM FACILITIES" means each and all of the Parent Series 2
Refinancing Term Facility, the Parent Series 2 Acquisition Term
Facility and the Canada Holdco Series 2 Acquisition Term Facility;
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"SERIES 2 TERM FACILITY LOAN" means a loan made or to be made under
any Series 2 Term Facility or the principal amount outstanding for
the time being of that loan;
"SHAREHOLDER PAYMENT" means any payment (whether in cash or
otherwise) by the Parent in respect of:
(a) Distributions in respect of its shares; or
(b) redemption of any of its shares or the Loan Stock; or
(c) interest on the Loan Stock;
"SPECIFIED PURPOSE" means in respect of any particular Facility, the
purpose of such Facility as specified in Clause 3.1;
"SPECIFIED TIME" means a time determined in accordance with Schedule
11;
"STERLING" and "L" means the lawful currency of the United Kingdom;
"STERLING EQUIVALENT" means in respect of currency borrowings or
utilisations in the Optional Currency under the Working Capital
Facility the amount of Sterling required to purchase the relevant
currency at the Working Capital Bank's spot rate of exchange on the
applicable day at such time as the Working Capital Bank may select in
accordance with its normal market practice for currency borrowings
under working capital facilities;
"STOCKHOLDERS AGREEMENT" means the stockholders agreement dated on or
around the date hereof between inter alia the Parent and US Newco;
"SUBSIDIARY" means a subsidiary within the meaning of section 736 of
the Companies Act 1985;
"SURPLUS" means that amount in excess of US$2,000,000 by which the
cash flow covenant referred to in Clause 21.1.4 is exceeded on any
covenant test date;
"TARGET" means Clintrials Research Inc;
"TARGET ACCOUNTS" means the draft financial statements of each Target
Group Company for the financial year ended 31 December 2000 together
with all statements, notes, directors and auditors reports annexed to
or incorporated in them;
"TARGET GROUP" means the Target and its Subsidiaries and "TARGET
GROUP COMPANY" means any of them;
"TARGET GROUP US BANK INDEBTEDNESS" means the indebtedness as at
today's date of Target Group Companies to Bank of America;
"TARGET MANAGEMENT ACCOUNTS" means the individual and consolidated
management accounts of the Target Group for the period to 31 December
2000;
"TARGET STOCK" means the Company Common Stock, as defined in the
Merger Agreement;
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"TAX" means any tax, levy, impost, duty or other charge or withholding
of a similar nature (including any penalty or interest payable in
connection with any failure to pay or any delay in paying any of the
same);
"TAXES ACT" means the Income and Corporation Taxes Act 1988;
"TENDER OFFER" means the Offer, as defined in the Merger Agreement;
"TERM FACILITY" means any of the Series 1 Term Facilities or the Series
2 Term Facilities;
"TERMINATION EVENT" means:
(a) a "Reportable Event" described in Section 4043 of ERISA; or
(b) the withdrawal of any Borrower, Group Company or any ERISA
Affiliate from a Pension Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; or
(c) the termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension
Plan amendment as a termination under Section 4041 of ERISA; or
(d) the institution of proceedings to terminate, or the appointment
of a trustee with respect to, any Pension Plan by the PBGC; or
(e) any other event or condition which would constitute grounds
under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; or
(f) the partial or complete withdrawal of any Borrower, Group
Company or ERISA Affiliate from a Multiemployer Plan; or
(g) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA; or
(h) any event or condition which results in the reorganisation or
insolvency of a Multiemployer Plan under Sections 4241 or 4245
or ERISA; or
(i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA;
"THIRD STAGE SECURITY" means a pledge/charge by Canada Holdco in respect
of the entire issued share capital of Clintrials BioResearches Limited
in the agreed form;
"TOTAL COMMITMENTS" means the aggregate of the Canada Holdco Series 1
Acquisition Term Facility Commitments, Canada Holdco Series 2
Acquisition Term Facility Commitments, Parent Series 1 Acquisition Term
Facility Commitments, Parent Series 2 Acquisition Term Facility
Commitments, Parent Series 1 Refinancing Term Facility Commitments,
Parent Series 2 Refinancing Term Facility Commitments the Total Capital
Expenditure Facility Commitments and the Total Working Capital Facility
Commitments;
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"TOTAL CAPITAL EXPENDITURE FACILITY COMMITMENTS" means the aggregate of
the Capital Expenditure Facility Commitments being C$15,300,000 at the
date of this Agreement;
"TOTAL WORKING CAPITAL FACILITY COMMITMENTS" means the aggregate of the
Working Capital Facility Commitments being L6,000,000 at the date of
this Agreement;
"TRANSACTION DOCUMENTS" means the Finance Documents, the Merger
Documents, the Tender Offer and the Equity Documents;
"TRANSFER CERTIFICATE" means a certificate substantially in the form set
out in Schedule 7 or any other form agreed between the Agent and the
Parent;
"TRANSFER DATE" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer
Certificate; and
(b) the date on which the Agent executes the Transfer Certificate;
"UNAPPLIED NET PROCEEDS" means in respect of a Relevant Disposal means
those net proceeds of such Relevant Disposal which, as at the end of the
period of 6 months after the date of such relevant disposal, have not
been applied in a Permitted Application;
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor
under the Finance Documents;
"US DOLLARS" and "US$" means the lawful currency of the United States of
America;
"US NEWCO" means Indigo Acquisition Corp;
"UTILISATION" means a utilisation of a Facility;
"UTILISATION DATE" means the date of a Utilisation, being the date on
which the relevant Loan or Utilisation of the Working Capital Facility
is to be made;
"UTILISATION REQUEST" means a notice substantially in the form set out
in Schedule 4;
"VAT" means value added tax as provided for in the Value Added Tax Act
1994 and any other tax of a similar nature;
"WORKING CAPITAL AVAILABLE AMOUNT" means subject to the Working Capital
Facility Limit at any time the difference between the Total Working
Capital Facility Commitments of all Working Capital Banks and the
Working Capital Outstandings at that time;
"WORKING CAPITAL FACILITY" means the working capital facility made
available under this Agreement and described in Clause 2.1.3;
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"WORKING CAPITAL FACILITY COMMITMENT" means:
(a) in relation to an Original Lender, the amount, if any, set under
its name opposite the words "Working Capital Facility
Commitment" in Schedule 2 and the amount of any other Working
Capital Facility Commitment transferred to it under this
Agreement; and
(b) in relation to any other Lender, the amount, if any, of any
Working Capital Facility Commitment transferred to it under this
Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement;
"WORKING CAPITAL FACILITY LIMIT" means L6,000,000;
"WORKING CAPITAL LENDER" means any Lender having a Working Capital
Facility Commitment which is greater than zero;
"WORKING CAPITAL LOAN" means a loan or utilisation made or to be made
under the Working Capital Facility or the principal amount outstanding
for the time being of that loan or utilisation;
"WORKING CAPITAL OUTSTANDINGS" means, at any time, the aggregate of:
(a) all amounts outstanding in Sterling by way of overdraft under
the Working Capital Facility;
(b) the Sterling Equivalent of all amounts outstanding by way of
overdraft in the Optional Currency under the Working Capital
Facility;
(c) the Guaranteed Amount of each Bank Guarantee issued by the
Working Capital Bank;
(d) such amount calculated on a market to market basis as the
Working Capital Bank may, in accordance with its then current
credit policy accord as a risk weighting to all outstanding FFE
Contracts; and
(e) in relation to any other facilities or financial accommodation
provided under the Working Capital Facility, such other amounts
as the Working Capital Bank determines fairly represents the
aggregate exposure of the Working Capital Bank in respect of
that facility or accommodation;
"WORKING CAPITAL REPAYMENT DATE" means 31 December 2007.
1.2 CONSTRUCTION
1.2.1 Any reference in this Agreement to:
(a) "AGREED FORM" means in relation to a document the form agreed by
the Parent and the Agent and initialled by them or on their
behalf for the purpose of identification on the date of this
Agreement or if not then agreed, in form and substance
acceptable to the Agent;
(b) "ASSETS" includes present and future properties, revenues and
rights of every description;
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(c) a "FINANCE DOCUMENT" or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended or novated;
(d) "INDEBTEDNESS" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(e) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal
personality) or two or more of the foregoing;
(f) a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the force
of law but if not, being a regulation, rule, official directive,
request or guideline in accordance with which those to whom it
is addressed customarily comply) of any governmental,
intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;
(g) a provision of law is a reference to that provision as amended
or re-enacted; and
(h) unless a contrary indication appears, a time of day is a
reference to London time.
1.2.2 Section, Clause and Schedule headings are for ease of reference only.
1.2.3 Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in
this Agreement.
1.2.4 A Default (other than an Event of Default) is "CONTINUING" if it has not
been remedied or waived and an Event of Default is "CONTINUING" if it
has not been waived.
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1.3 CURRENCY CONVERSION
Where any calculation of a monetary amount is required to be made in
Sterling or Canadian Dollars under this Agreement and any sum forming
part or the whole of such monetary amount is, or is to be denominated
in, a currency other than Sterling, or as appropriate Canadian Dollars,
such sum shall (except as otherwise provided for herein) for the
purposes of such calculation be converted notionally into Sterling or as
appropriate Canadian Dollars at the rate of exchange at which the Agent
would have been able to make a spot purchase of such sum with Sterling
or as appropriate Canadian Dollars in the London foreign exchange market
at or about 11.00 a.m. on the second business day preceding the date as
at which the calculation is to be made or, if the relevant date is not a
day on which the London foreign exchange markets are open for spot
transactions in Sterling or as appropriate Canadian Dollars and that
currency, or the next following (or, if the Agent so determines, the
immediately preceding) such day.
2 THE FACILITIES
2.1 THE FACILITIES
Subject to the terms of this Agreement:
2.1.1 The Lenders make available to the Parent:
(a) a Sterling senior term loan facility in an aggregate amount
equal to the Parent Series 1 Refinancing Term Facility
Commitments;
(b) a Sterling senior term loan facility in an aggregate amount
equal to the Parent Series 2 Refinancing Term Facility
Commitments;
(c) a US Dollar (initially denominated) senior term loan facility in
an aggregate amount equal to the Parent Series 1 Acquisition
Term Facility Commitments;
(d) a US Dollar (initially denominated) senior term loan facility in
an aggregate amount equal to the Parent Series 2 Acquisition
Term Facility Commitments.
2.1.2 The Lenders make available to Canada Holdco:
(a) a US Dollar (initially denominated) senior term loan facility in
an aggregate amount equal to the Canada Holdco Series 1
Acquisition Term Facility Commitments;
(b) a US Dollar (initially denominated) senior term loan facility in
an aggregate amount equal to the Canada Holdco Series 2
Acquisition Term Facility Commitments; and
(c) a Canadian Dollar capital expenditure facility in an aggregate
amount equal to the Total Capital Expenditure Facility
Commitments.
2.1.3 The Working Capital Bank makes available to the Borrowers a Sterling
working capital facility in an aggregate amount equal to the Total
Working Capital Facility Commitments.
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2.2 LENDER'S RIGHTS AND OBLIGATIONS
2.2.1 The obligations of each Lender under the Finance Documents are several.
Failure by a Lender to perform its obligations under the Finance
Documents does not affect the obligations of any other Party under the
Finance Documents. No Finance Party is responsible for the obligations
of any other Finance Party under the Finance Documents.
2.2.2 The rights of each Lender under or in connection with the Finance
Documents are separate and independent rights and any debt arising under
the Finance Documents to a Lender from an Obligor shall be a separate
and independent debt.
2.2.3 A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.
3 PURPOSE AND CONDITIONS PRECEDENT
3.1 PURPOSE
3.1.1 The Parent shall apply all amounts borrowed by it under the Parent
Series 1 Refinancing Term Facility and the Parent Series 2 Refinancing
Term Facility towards the refinancing of the Existing Inveresk
Facilities.
3.1.2 Each relevant Borrower shall apply all amounts borrowed by it under the
Parent Series 1 Acquisition Term Facility, the Parent Series 2
Acquisition Term Facility, the Canada Holdco Series 1 Acquisition Term
Facility and the Canada Holdco Series 2 Acquisition Term Facility
towards:
(a) satisfaction of the consideration payable for Target Stock
pursuant to the Tender Offer or any extension thereof;
(b) satisfaction of the consideration payable for Target Stock
pursuant to the Merger; and
(c) payment of agreed costs and expenses in connection with the
Tender Offer and the Merger.
3.1.3 Canada Holdco shall apply all amounts borrowed by it under the Capital
Expenditure Facility towards capital expenditure incurred in expanding
the capacity of Clintrials BioResearches Limited pre-clinical trials
operations.
3.1.4 Each relevant Borrower shall utilise the Working Capital Facility for
general working capital purposes and payment of fees and expenses in
connection with the Merger but not to make prepayments of any Loan.
3.2 MONITORING
No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.
3.3 INITIAL CONDITIONS PRECEDENT
No Borrower may deliver a Utilisation Request in respect of any Loan or
the Capital Expenditure Facility and no Borrower may make any
Utilisation of the Working Capital Facility unless the Agent has
received all the documents and other evidence
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listed in Part 1 of Schedule 3 each such document/item (other than
Security Documents) being in form and substance satisfactory to the
Agent and the following additional conditions have been satisfied:-
3.3.1 the Minimum Condition having been satisfied;
3.3.2 all conditions to the Tender Offer set forth in Annex A to the Merger
Agreement shall have been satisfied (and a written confirmation from the
Parent, acting reasonably and in good faith after consultation with the
Agent, will satisfy this requirement) or (with the consent of the Agent)
waived;
3.3.3 no event or matter has had a material adverse effect on the financial
condition, assets or revenues of the Group taken as a whole having
occurred (and a written confirmation from the Parent, acting reasonably
and in good faith, will satisfy this requirement).
3.4 ADDITIONAL ACQUISITION TERM LOANS CONDITIONS PRECEDENT
3.4.1 No Borrower may deliver a Utilisation Request in respect of any Series 2
Term Facility Loan unless the Available Facility in respect of all
Series 1 Term Facilities is zero.
3.4.2 No Borrower may deliver a Utilisation Request in respect of the Parent
Series 1 Acquisition Term Facility, the Parent Series 2 Acquisition Term
Facility, the Canada Holdco Series 1 Acquisition Term Facility, and the
Canada Holdco Series 2 Acquisition Term Facility unless:
(a) together with such Utilisation Request, the Borrower has
delivered a duly completed and executed Form U-1 pursuant to
Regulation U of the United States Board of Governors of the
Federal Reserve System ("Regulation U"); and
(b) the aggregate outstanding balance of all Loans advanced under
the Parent Series 1 Acquisition Term Facility, the Parent Series
2 Acquisition Term Facility, the Canada Holdco Series 1
Acquisition Term Facility, and the Canada Holdco Series 2
Acquisition Term Facility, after giving effect to the advance
pursuant to the Utilisation Request, does not exceed fifty per
cent (50%) of the current market value (as defined in Regulation
U) of the Target Stock, including the Target Stock to be
acquired by the Borrower pursuant to the Utilisation Request,
provided, however, that the foregoing conditions shall not apply if upon
the acquisition of Target Stock pursuant to the Utilisation Request the
Target Stock will not be "margin stock" as defined under Regulation U.
3.5 FURTHER CONDITIONS PRECEDENT
3.5.1 Subject to Clause 3.6 the Lenders will only be obliged to comply with
Clause 4.1.4 if on the date of the Utilisation Request and on the
proposed Utilisation Date:
(a) no Default is continuing or would result from the proposed Loan;
and
(b) the Repeating Representations to be made by each Obligor are
true in all material respects.
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3.6 CERTAIN FUNDS PERIOD
3.6.1 Notwithstanding any other provision of this Agreement other than Clause
3.4.2, during the Availability Period:
(a) the relevant Borrowers shall be entitled to utilise the Parent
Series 1 Acquisition Term Facility Loans, Parent Series 2
Acquisition Term Facility Loans, Canada Holdco Series 1
Acquisition Term Facility Loans and Canada Holdco Series 2
Acquisition Term Facility Loans and the Parent Series 1
Refinancing Term Facility Loans and the Parent Series 2
Refinancing Term Facility Loans and the Lenders shall be obliged
make the Parent Series 1 Acquisition Term Facility Loans, Parent
Series 2 Acquisition Term Facility Loans, Canada Holdco Series 1
Acquisition Term Facility Loans and Canada Holdco Series 2
Acquisition Term Facility Loans and the Parent Series 1
Refinancing Term Facility Loans and the Parent Series 2
Refinancing Term Facility Loans available despite the occurrence
or existence of any Event of Default (other than prior to the
Drawdown Date a Primary Default) or a breach of warranty (other
than prior to the Drawdown Date a Primary Warranty) in order
(and only to the extent) that US Newco is able to comply with
its obligations under the Tender Offer and Merger Agreement to
pay the consideration payable in relation to the acquisition of
the Target Stock and to refinance the Existing Inveresk
Facilities; and
(b) no Finance Party will have or seek to exercise any right of
rescission or other remedy (whether under the Finance Documents
or the general law) with a view to refusing to make any amount
available under the facilities referred to in Clause 3.6.1(a).
3.6.2 The Borrowers acknowledge that the terms of Clause 3.6.1 above do not
amount to a waiver of any Event of Default or Default and accordingly
shall not prejudice any rights of the Agent and/or any of the other
Finance Parties to exercise any rights under this Agreement or any
rights of recission or other remedies in respect of any such Event of
Default or Default or such other rights or remedies on the expiry of the
Availability Period.
3.6.3 For the purposes of this Clause 3.6 and Clause 23.25 only, Clause 23.7
shall be amended so as to appear in the following form:
"Any distress, execution, arrestment, attachment, inhibition or other
diligence or legal process affects any asset of any Material Company and
such circumstances in the reasonable opinion of the Lenders could have a
Material Adverse Effect; or"
3.6.4 For the purposes of this Clause 3.6 and Clause 23.25 only, Clause
23.8(a) shall be amended so as to appear in the following form:
"(a) any Material Company to be adjudicated or found insolvent other
than proceedings which are proved to the satisfaction of the Agent,
acting reasonably, to be frivolous or vexatious and which are discharged
within 21 days of presentation;"
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3.7 MAXIMUM NUMBER OF LOANS
3.7.1 The Parent may not deliver a Utilisation Request if as a result of the
proposed Utilisation:
(a) 2 or more Parent Series 1 Refinancing Term Facility Loans or 2
or more Parent Series 2 Refinancing Term Facility Loans would be
outstanding;
(b) 6 or more Parent Series 1 Acquisition Term Facility Loans or 4
or more Parent Series 2 Acquisition Term Facility Loans would be
outstanding.
3.7.2 Canada Holdco may not deliver a Utilisation Request if as a result of
the proposed Utilisation:
(a) 6 or more Canada Holdco Series 1 Acquisition Term Facility Loans
or 4 or more Canada Holdco Series 2 Acquisition Term Facility
Loans would be outstanding;
(b) 5 or more Capital Expenditure Facility Loans would be
outstanding.
3.8 CONDITIONS RELATING TO CAPITAL EXPENDITURE FACILITY
3.8.1 The Lenders will only be obliged to comply with Clause 4.1.4 with
respect to a Capital Expenditure Facility Loan if the Agent has received
not less than 5 Business Days before the date of the Utilisation Request
such evidence as it may reasonably require demonstrating the relevant
Capital Expenditure Facility Loan both in amount and with regard to its
intended application is in accordance with the relevant Operating
Budget.
4 UTILISATION OF TERM LOANS
4.1 SERIES 1 TERM FACILITIES, SERIES 2 TERM FACILITIES AND CAPITAL
EXPENDITURE FACILITIES
4.1.1 DELIVERY OF A UTILISATION REQUEST
4.1.1.1 Without prejudice to the terms of Clause 4.1.1.2 the relevant Borrower
may utilise a Term Facility and the Capital Expenditure Facility by
delivery to the Agent of a duly completed Utilisation Request not later
than the Specified Time.
4.1.1.2 The Parent shall procure that an Original Borrower shall utilise the
maximum aggregate principal amount of the Parent Series 1 Refinancing
Term Facility and the Parent Series 2 Refinancing Term Facility
simultaneously with the initial Utilisation of any of the other
Facilities.
4.1.2 COMPLETION OF A UTILISATION REQUEST
4.1.2.1 Each Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:
(a) it identifies the Facility to be utilised;
(b) the proposed Utilisation Date is a Business Day within the
Availability Period applicable to that Facility;
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(c) the currency and amount of the Utilisation comply with Clause
4.1.3; and
(d) the proposed Interest Period complies with Clause 10.
4.1.2.2 Only one Loan may be requested in each Utilisation Request.
4.1.3 CURRENCY AND AMOUNT
4.1.3.1 The currency specified in a Utilisation Request must be the Base
Currency.
4.1.3.2 The amount of a proposed Loan shall be a minimum of L5,000,000 in
respect of the Parent Series 1 Refinancing Term Facility Loan or the
Parent Series 2 Refinancing Term Facility (and in each case an integral
multiple of L500,000); a minimum of US$1,000,000 in respect of the
Parent Series 1 Acquisition Term Facility, the Parent Series 2
Acquisition Term Facility, the Canada Holdco Series 1 Acquisition Term
Facility and the Canada Holdco Series 2 Acquisition Term Facility (and
in each case an integral multiple of US$250,000) and Canadian $1,500,000
in respect of the Capital Expenditure Facility (and an integral multiple
of C$300,000).
4.1.4 LENDERS' PARTICIPATION
4.1.4.1 If the conditions set out in this Agreement have been met, each Lender
shall make its participation in each Loan available through its Facility
Office.
4.1.4.2 The amount of each Lender's participation in each Loan will be equal to
the proportion borne by its Available Commitment to the Available
Facility immediately prior to making the Loan.
4.1.4.3 The Agent shall notify each Lender of the amount, currency and the
amount of each Loan at the Specified Time.
5 RE-DENOMINATION OF ACQUISITION TERM LOANS
5.1 PARENT'S OPTION
The Parent shall at any time during the Re-denomination Period be
entitled to serve notice upon the Agent requiring all Loans made under
the Canada Holdco Series 1 Acquisition Term Facility and the Canada
Holdco Series 2 Acquisition Term Facility to be re-denominated in
Canadian Dollars and all Loans made under the Parent Series 1
Acquisition Term Facility and the Parent Series 2 Acquisition Term
Facility to be re-denominated in Sterling.
5.2 AGENT'S OPTION
If the Parent does not serve the notice contemplated by Clause 5.1
before the expiry of the Re-denomination Period the Agent shall at any
time during the period of one month from expiry of the Re-denomination
Period be entitled to serve a notice upon the Parent requiring the
re-denominations referred to in Clause 5.1.
5.3 NOTICE
A notice by the Parent pursuant to Clause 5.1 or by the Agent pursuant
to Clause 5.2 shall specify the proposed date of re-denomination (the
"Re-denomination Date") which shall be not less than 3 Business Days
after the date of the notice itself.
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5.4 RE-DENOMINATION AMOUNT
On the Re-denomination Date:
(a) all Loans made under the Canada Holdco Series 1 Acquisition Term
Facility and the Canada Holdco Series 2 Acquisition Term
Facility shall be repaid by the Relevant Borrower in US Dollars
on that date and thereupon re-advanced in Canadian Dollars in
the FFE Amount (or such other amount as may be relevant); and
(b) all Loans made under the Parent Series 1 Acquisition Term
Facility and the Parent Series 2 Acquisition Term Facility shall
be repaid by the Relevant Borrower in US Dollars on that date
and thereupon re-advanced in Sterling in the FFE Amount (or such
other amount as may be relevant);
in each case as a separate Loan.
5.5 RE-DENOMINATION OF COMMITMENTS
Upon the re-denomination of any Loans pursuant to this Clause 5 the
Commitment of each Lender in respect of the relevant Loan shall be
re-calculated as the amount (the "Re-denominated Commitment Amount") in
the new currency which bears the same proportion to the total FFE Amount
as its previous Commitment bore to the US Dollar amount repaid.
6 THE WORKING CAPITAL FACILITY
6.1 NATURE OF FACILITY
6.1.1 The Working Capital Facility is available for utilisation by any
Borrower, subject to the other terms hereof, at any time during the
Availability Period provided there has been an advance of any other
Loan.
6.1.2 The Working Capital Facility is made available by the Working Capital
Bank in an aggregate maximum principal amount equal to the Working
Capital Facility Limit.
6.1.3 The Working Capital Facility shall, subject to Clauses 6.2.2 and 6.2.3,
cease to be available on the Working Capital Repayment Date or such
earlier date on which it is cancelled in accordance with the terms
hereof.
6.1.4 Each Borrower shall complete such mandate and other documents in respect
of the Working Capital Facility as the Working Capital Bank may require
in accordance with its normal practice for commercial borrowers.
6.2 UTILISATION
6.2.1 Subject to the other terms of this Agreement, the Working Capital Bank
agrees to make the Working Capital Facility available on a revolving
basis to the Borrowers to be utilised on any Business Day by way of:
(a) issue of Bank Guarantees in Sterling or the Optional Currency;
(b) overdraft in Sterling or the Optional Currency on usual banking
terms;
(c) FFE Contracts; and
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(d) such other facilities or financial accommodation as the Working
Capital Bank and the Borrowers may agree.
6.2.2 No utilisation of the Working Capital Facility under 6.2.1 shall be made
if it would result in the Working Capital Outstandings exceeding the
Working Capital Facility Limit.
6.2.3 No utilisation of the Working Capital Facility under Clause 6.2.1 may be
made if on the date of the proposed utilisation a Default has occurred
and is continuing or would occur on such utilisation except in respect
of a utilisation of the Working Capital Facility to be made for the sole
purpose of, (demand having been made under a Bank Guarantee issued by
the Working Capital Bank), paying the amount guaranteed or otherwise
assured under that Bank Guarantee or reimbursing the Working Capital
Bank in respect of the amount properly paid by the Working Capital Bank
under that Bank Guarantee, the utilisation of the Working Capital
Facility shall be made notwithstanding the occurrence and intimation of
a Default or any of the representations or warranties to be repeated not
being correct, unless the Agent shall have served a notice of Default.
6.2.4 For the avoidance of doubt the Working Capital Bank may, without
liability, return cheques unpaid if the payment of those would result in
a breach of Clause 6.2.2.
6.2.5 The Working Capital Bank may, with the consent of the Majority Lenders,
allow the Working Capital Facility Limit to be exceeded.
6.2.6 The issue by the Working Capital Bank of a Bank Guarantee in favour of
any bank or financial institution in relation to any such facility shall
itself be regarded for the purposes of this Agreement as a utilisation
of the Working Capital Facility.
6.3 OPTIONAL CURRENCIES
6.3.1 Whenever a Borrower wishes an overdraft in the Optional Currency, it
shall make a prior written request to the Working Capital Bank no later
than 11.00 a.m. five Business Days before the proposed utilisation.
6.3.2 A Borrower may not create an overdraft under the Working Capital
Facility in the Optional Currency unless the Working Capital Bank has
confirmed to that Borrower that the Optional Currency is available by
way of overdraft under the Working Capital Facility.
6.3.3 The Working Capital Bank shall promptly notify the relevant Borrower if
it agrees with the Borrower that the Optional Currency can be utilised
by way of the overdraft under the Working Capital Facility.
6.3.4 If in relation to any payment which is proposed to be denominated in the
Optional Currency under the overdraft provided under the Working Capital
Facility, the Working Capital Bank determines that:
(a) for whatever reason it is impractical for it to fund that amount
in the Optional Currency in the ordinary course of business; or
(b) central bank or other governmental authorisation in the country
of the Optional Currency is required to permit its use by the
Working Capital Bank for the funding of that amount and the
authorisation has not been
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obtained or is not in full force and effect or is subject to
unacceptable conditions; or
(c) the use of the Optional 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 the Working Capital Bank is accustomed to act,
then the Working Capital Bank shall notify the Borrower. If the Working
Capital Bank so determines that one of the above circumstances applies
and notwithstanding that it has not notified the Borrower of this the
Working Capital Bank shall have no obligation to provide such funds and
make the relevant payment in the Optional Currency under the Working
Capital Facility.
6.4 EXCHANGE RATE MOVEMENTS
6.4.1 If on any day the Working Capital Outstandings exceed 105% of the
Working Capital Facility Limit then the relevant Borrowers shall, within
2 Business Days of receiving the Working Capital Bank's demand so to do,
pay to the credit of their respective Cash Collateral Accounts such
amounts as to ensure that the aggregate of:
(a) the Working Capital Outstandings, less
(b) the Sterling Equivalent (calculated on that day in accordance
with the Working Capital Bank's usual practice) of all sums
standing to the credit of the Cash Collateral Accounts on that
day
shall equal or be less than the Working Capital Facility Limit.
6.4.2 On each day, provided that no Default has occurred and is continuing,
the Borrowers may withdraw such amounts standing to the credit of the
Cash Collateral Accounts to ensure that, after payment of such amounts,
the aggregate of:
(a) the Working Capital Outstandings, less
(b) the Sterling equivalent (calculated on that day in accordance
with the Working Capital Bank's usual practice) of all sums, if
any, standing to the credit of the Cash Collateral Accounts on
that day
is equal to or less than the Working Capital Facility Limit.
6.4.3 In this Clause 6.4, a "Cash Collateral Account" means in relation to a
Borrower and the Optional Currency, an account of that Borrower in that
currency held with the Working Capital Bank and designated as being in
respect of the Working Capital Facility.
6.4.4 On the first occasion a Borrower is obliged to make a payment to a Cash
Collateral Account it shall open that Cash Collateral Account and charge
the same to the Security Trustee on terms satisfactory to the Security
Trustee.
6.4.5 Except as expressly permitted in this Clause 6.4 no Borrower may
withdraw any amount from a Cash Collateral Account.
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6.5 FFE CONTRACTS
6.5.1 An FFE Contract shall:
(a) be on the usual terms of the Working Capital Bank;
(b) be of a duration of not more than 12 months;
(c) be on terms that the Working Capital Bank shall have no
obligation to make payments under it at any time after the
Working Capital Repayment Date unless the Working Capital Bank
(in its sole discretion and upon such terms as it requires)
agrees otherwise; and
(d) only be entered into on a Business Day.
6.5.2 All obligations and liabilities owing to the Working Capital Bank under
or in respect of an FFE Contract shall be deemed to be obligations and
liabilities owing to the Working Capital Bank under this Agreement.
6.6 BANK GUARANTEES
6.6.1 The Working Capital Bank shall not be obliged to issue any Bank
Guarantee unless it has approved the form of the proposed Bank
Guarantee.
6.6.2 No Bank Guarantee will be issued under which a claim could be made at a
time after the Working Capital Repayment Date in relation to the Working
Capital Facility unless the Working Capital Bank (in its sole discretion
and upon such terms as it reasonably requires) agrees otherwise.
6.6.3 Each Bank Guarantee will be denominated in Sterling (or the Optional
Currency if consented to by the Working Capital Bank) and shall state on
its face the maximum amount payable under such Bank Guarantee and the
expiry date of such Bank Guarantee.
6.6.4 A Bank Guarantee will only be issued on:
(a) a Business Day during the Working Capital Commitment Period; and
(b) if, on the relative Issue Date, the maximum amount payable under
such Bank Guarantee does not exceed the Working Capital
Available Amount.
6.6.5 Any Bank Guarantee shall be regarded as being in full force and effect
and the Working Capital Bank shall be treated as having a liability
thereunder unless and until such Bank Guarantee has expired in
accordance with its terms without any claims having been made thereunder
or that the beneficiary of such Guarantee has been satisfied and has
released the Working Capital Bank from its obligations thereunder.
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6.7 GUARANTEE REQUEST
Whenever a Borrower wishes a Bank Guarantee to be issued by the
Working Capital Bank, it shall give the Working Capital Bank a duly
completed Guarantee Request together with a draft of the proposed
Bank Guarantee to be received not later than 3 Business days prior to
the relevant Issue Date.
6.8 COUNTER INDEMNITY FROM THE BORROWERS
Each Borrower hereby unconditionally and irrevocably agrees and
undertakes to the Agent, the Working Capital Bank and the Working
Capital Lenders as follows:
6.8.1 it will at all times indemnify the Agent, the Working Capital Bank
and each Working Capital Lender and keep the Agent, the Working
Capital Bank and each Working Capital Lender 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 Bank Guarantee issued hereunder
for its account (except where the same results from the gross
negligence or wilful misconduct of the Working Capital Bank) and it
will pay the Working Capital Bank or the Agent for the account of the
Working Capital Lenders (as the case may be) 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 properly incurred from time to time by the
Working Capital Bank and/or the Working Capital Lenders under or by
reason or in consequence of any such Bank Guarantee (except where the
same results from the gross negligence or wilful misconduct of the
Working Capital Bank) and each Working Capital Lender Indemnity;
6.8.2 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 Bank
Guarantee without any reference to, or further authority from, such
Borrower for whose account such Bank Guarantee was issued and without
any enquiry by the Working Capital Bank into the justification for
such demand or the validity thereof and 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 such 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;
6.8.3 the liability of any Borrower under this Clause 6.8 shall not be
discharged, lessened or impaired by any time being given or by
anything being done or other circumstance whatsoever which, but for
this provision, would or might operate to exonerate or discharge such
Borrower;
6.8.4 the indemnity contained in this Clause 6.8 shall constitute and be a
continuing security to the Working Capital Bank and the said
indemnity shall extend to each Bank Guarantee as it may, from time to
time, be varied, modified, amended or extended;
6.8.5 the Working Capital Bank may claim under any Borrower Indemnity or
under any Lender Indemnity in such order as the Working Capital Bank
shall think fit.
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For the purpose of making a claim under this Clause 6.8 in its
capacity as a Working Capital Lender the Working Capital Bank in its
respective capacities as the Working Capital Bank and a Working
Capital Lender will be treated as thought it were two separate legal
entities and the Borrowers will be required to indemnify it under
this Clause 6.8 in its capacity as a Working Capital Bank for
payments made by it or deemed to have been made by it to the Working
Capital Bank under Clause 6.9.
6.9 COUNTER INDEMNITY FROM THE WORKING CAPITAL LENDERS
6.9.1 If the relevant Borrower fails to pay to the Working Capital Bank any
amount due under this Agreement in respect of the Working Capital
Facility within two Business Days of its due date (the difference
between the amount due and the amount paid being the "SHORTFALL")
then, without limitation to all other rights and remedies of the
Parties in respect thereof, the Working Capital Bank shall inform the
Agent of such failure, specifying the amount and currency of the
Shortfall whereupon the Agent shall issue a notification (a
"SHORTFALL NOTIFICATION") to the Working Capital Lenders stating the
amount and currency of the Shortfall.
6.9.2 Following the issue of a Shortfall Notification each Working Capital
Lender shall pay to the Agent for the account of the Working Capital
Bank an amount equal to a proportion of the Shortfall equal to such
Working Capital Lender's Participation (as defined in Clause 6.10) in
the Working Capital Facility together with interest thereon from the
due date referred to in Clause 6.9.1 to the date of such payment to
the Agent at the rate which is equal to the aggregate of:
(a) the Margin; and
(b) an amount equivalent to the cost of funds to the Working
Capital Bank (as certified by the Working Capital Bank).
Such payments shall be made on the next Business day following the
issuance of the Shortfall Notification and shall, subject to Clause
6.9.3 satisfy the amount due (including interest thereon) from the
relevant Borrower in respect of which such Shortfall arose to the
extent of such payments. The Working Capital Lenders expressly
acknowledge the provision of any BACS facilities and any excess which
arises by virtue of BACS operations, shall (in the circumstances
contemplated in Clause 6.9.1) be treated like any other amount
forming all or part of a Shortfall and subject to reimbursement by
the Working Capital Lenders pursuant to Clause 6.9.2.
6.9.3 The relevant Borrower shall, indemnify the Working Capital Lenders on
demand against any amount payable by them under this Clause 6.9 and
in respect of such indemnity the protective provisions in favour of
the Security Trustee contained in any guarantee granted to the
Security Trustee by any Group Company shall be deemed to apply
mutatis mutandis.
6.9.4 For the avoidance of doubt, neither the Parent nor the relevant
Borrower shall be obliged to make any payment in respect of the same
amount more than once.
6.10 WORKING CAPITAL BANKS PARTICIPATION
For the purposes of Clauses 6.9 and 9.2.8 the "participation" of a
Working Capital Bank at any time in the Working Capital Facility
shall be the proportion of the Working Capital Facility equal to the
proportion borne by the Working Capital
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Bank's Working Capital Commitment to the Total Working Capital
Commitments at such time.
6.11 INTEREST ON PAYMENTS
Each Borrower hereby agrees that it shall pay 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 Bank Guarantee issued for its account 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 which demand shall be made promptly by the Working
Capital Bank upon it making the relevant payment or, as the case may
be, becoming aware of the relevant loss, cost or expense. The amount
of such interest shall be calculated in accordance with Clause 9.2.6.
For the avoidance of doubt, interest on sums demanded under the
provisions of this Clause 6.11 shall also accrue in accordance with
Clause 9.2.6.
7 REPAYMENT
7.1 REPAYMENT OF SERIES 1 TERM FACILITIES
7.1.1 Each Borrower shall repay the Series 1 Term Facilities by paying the
Agent on each date set out under Column A below (each a "SERIES 1
TERM FACILITIES REPAYMENT DATE") in respect of each Series 1 Term
Facility that amount (each a "SERIES 1 TERM FACILITIES REPAYMENT
INSTALMENT") equal to (A x B) where:
A = the aggregate amount of its Series 1 Term Facilities Loans
under the relevant Series 1 Term Facility as at the expiry of
the Availability Period; and
B = the percentage specified in Column B below corresponding to
the relevant Series 1 Term Facilities Repayment Date,
so that the Series 1 Term Facilities are repaid in full on or before
the Final Repayment Date.
COLUMN A COLUMN B
SERIES 1 TERM FACILITIES REPAYMENT DATES %
---------------------------------------------------------
31 December 2001 2.00%
30 June 2002 5.00%
31 December 2002 5.00%
30 June 2003 7.00%
31 December 2003 7.00%
30 June 2004 9.25%
31 December 2004 9.25%
30 June 2005 9.25%
31 December 2005 9.25%
30 June 2006 9.25%
31 December 2006 9.25%
30 June 2007 9.25%
31 December 2007 9.25%
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7.1.2 No Borrower may borrow any part of a Series 1 Term Facility which is
repaid.
7.2 REPAYMENT OF SERIES 2 TERM FACILITIES
7.2.1 Each Borrower shall repay the Series 2 Term Facilities by paying the
Agent on each date set out under Column A below (each a "SERIES 2
TERM FACILITIES REPAYMENT DATE") in respect of each Series 2 Term
Facility that amount (each a "SERIES 2 TERM FACILITIES REPAYMENT
INSTALMENT") equal to (A x B) where:
A = the aggregate amount of its Series 2 Term Facilities Loans
under the relevant Series 2 Term Facility as at the expiry of
the Availability Period; and
B = the percentage specified in Column B below corresponding to
the relevant Series 2 Term Facilities Repayment Date,
so that the Series 2 Term Facilities are repaid in full on or before
the Final Repayment Date.
COLUMN A COLUMN B
SERIES 2 TERM FACILITIES REPAYMENT DATES %
---------------------------------------------------------
30 June 2008 50%
31 December 2008 50%
7.2.2 No Borrower may borrow any part of a Series 2 Term Facility which is
repaid.
7.3 REPAYMENT OF CAPITAL EXPENDITURE FACILITY
7.3.1 Each Borrower shall repay the Capital Expenditure Facility by paying
the Agent on each date set out under Column A below (each a "CAPITAL
EXPENDITURE FACILITY REPAYMENT DATE") that amount (each a "CAPITAL
EXPENDITURE FACILITY REPAYMENT INSTALMENT") equal to (A X B) where:
A = the aggregate amount of Capital Expenditure Facility Loans as
at the expiry of the Availability Period; and
B = the percentage specified in Column B below corresponding to
the relevant Capital Expenditure Facility Repayment Date,
so that the Capital Expenditure Facility is repaid in full on or
before the Final Repayment Date.
COLUMN A COLUMN B
CAPITAL EXPENDITURE FACILITY REPAYMENT DATES %
---------------------------------------------------------
30 June 2003 10%
31 December 2003 10%
30 June 2004 10%
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COLUMN A COLUMN B
CAPITAL EXPENDITURE FACILITY REPAYMENT DATES %
---------------------------------------------------------
31 December 2004 10%
30 June 2005 10%
31 December 2005 10%
30 June 2006 10%
31 December 2006 10%
30 June 2007 10%
31 December 2007 10%
7.3.2 No Borrower may borrow any part of the Capital Expenditure Facility
which is repaid.
7.4 REPAYMENT OF WORKING CAPITAL FACILITY
On the Final Repayment Date:
7.4.1 each Borrower shall repay any overdraft made available under the
Working Capital Facility;
7.4.2 each Borrower shall in respect of each Bank Guarantee issued on its
behalf under the Working Capital Facility:
7.4.2.1 use best endeavours to procure the release of the Working Capital
Bank from such Bank Guarantee; and
7.4.2.2 without prejudice to Clause 7.4.2.1 above, pay to the credit of such
account as the Working Capital Bank shall stipulate an amount equal
to the Guaranteed Amount of that Bank Guarantee as cash cover and
charge such amount in favour of the Security Trustee in such manner
and on such terms as the Security Trustee may stipulate;
7.4.3 all other facilities or financial accommodation made available under
the Working Capital Facility shall be terminated; and
7.4.4 each Working Capital Lender's Working Capital Commitment shall be
reduced to zero.
8 PREPAYMENT AND CANCELLATION
8.1 ILLEGALITY
8.1.1 If it becomes unlawful in any jurisdiction for a Lender to perform
any of its obligations as contemplated by this Agreement or to fund
its participation in any Loan, Working Capital Loan or other
Utilisation of the Working Capital Facility:
(a) that Lender shall promptly notify the Agent upon becoming
aware of that event;
(b) upon the Agent notifying the Parent, the Commitment of
that Lender will be immediately cancelled;
(c) each Borrower shall repay that Lender's participation in
the Loans made to or by that Borrower on the last day of
the Interest Period for each Loan
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occurring after the Agent has notified the Parent or, if
earlier, the date specified by the Lender in the notice
delivered to the Agent (being no earlier than the last day
of any applicable grace period permitted by law); and
(d) if such Lender is also the Working Capital Bank, the
Borrowers shall repay all amounts outstanding under or in
relation to the Working Capital Facility as if a notice of
Default had been served.
8.1.2 If it is or becomes illegal for the Working Capital Bank to issue or
leave outstanding any Bank Guarantee the Working Capital Facility
shall cease to be available for the issue of Bank Guarantees and the
Borrowers shall use their best endeavours to procure the release of
each Bank Guarantee outstanding at such time.
8.2 CHANGE OF CONTROL/LISTING/SALE
8.2.1 If any person or group of persons acting in concert (other than the
shareholders of the Parent as at the date of this Agreement) gains
control of the Parent (disregarding for the purposes of this Clause
any sale by the Investors of up to 50% of the issued share capital of
the Parent in the context of any syndication by it) or there shall
occur a Listing in respect of the Parent or a Sale:
(a) the Parent shall promptly notify the Agent upon becoming
aware of that event;
(b) the Agent may, by not less than 14 days notice to the
Parent, cancel the Facilities and declare all outstanding
Loans together with accrued interest, and all other
amounts accrued under the Finance Documents immediately
due and payable, whereupon the Facilities will be
cancelled and all such outstanding amounts will become
immediately due and payable.
8.2.2 For the purposes of this Clause 8.2 "CONTROL" means:
(a) the ability to control the composition of the Parent's
board of directors or equivalent body whether through
ownership of voting capital, by contract or otherwise; or
(b) the ownership of shares or the right to acquire shares in
the capital of the Parent conferring in the aggregate 50%
or more of the total voting rights conferred by all the
shares in the capital of the Parent for the time being; or
(c) the power to exercise voting rights conferring in the
aggregate 50% or more of the total voting rights conferred
by all the shares in the capital of the Parent for the
time being;
8.2.3 For the purposes of this Clause 8.2 "ACTING IN CONCERT" has the
meaning given to it in the City Code on Takeovers and Mergers.
8.3 UNAPPLIED NET PROCEEDS
8.3.1 Without prejudice to any other provisions of this Agreement, if the
aggregate amount of Unapplied Net Proceeds arising in any period of
12 consecutive months is in excess of L500,000, the Borrowers shall,
apply an amount equal to such
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Unapplied Net Proceeds in prepaying (without premium or penalty, but
without prejudice to Clause 11.4) such of the Series 1 Term
Facilities or if all such Facilities are repaid in full, Series 2
Term Facilities, as the Agent may direct on the next Interest Payment
Date.
8.3.2 Where the Agent has served a notice under Clause 23, the Borrowers
shall, following the receipt of the net proceeds in respect of any
Relevant Disposal, apply (without premium or penalty, but without
prejudice to Clause 11.4) such amount in prepayment of such of the
Series 1 Term Facilities (or if all such Facilities are repaid in
full, Series 2 Term Facilities) as the Agent may direct.
8.3.3 Pending every such prepayment as is referred to above or any
Permitted Applications of the net proceeds of a Relevant Disposal the
Parent shall on the date of each Relevant Disposal procure that an
amount, or amounts in aggregate, equal to the net proceeds of such
Relevant Disposal is placed in a Security Account with the Security
Agent.
8.4 INSURANCE CLAIMS
8.4.1 The Borrowers shall following the receipt by any member of the
Ringfenced Group of any amount in respect of insurance claims in
excess of L500,000 apply (without premium or penalty, but without
prejudice to Clause 11.4) such amount in prepayment of such of the
Series 1 Term Facilities (or if all such Facilities are repaid in
full, Series 2 Term Facilities) as the Agent may direct on the next
Interest Payment Date unless such amount is utilised:
(a) in replacing, restoring or reinstating the property or
assets destroyed, damaged or lost or in discharging third
party liabilities insured by the relevant policy; or
(b) in relation to Keyman Insurance, in replacing the relevant
member of the Management Team; or
(c) where a member of the Group has incurred any expenditure
or has discharged any such liability are referred to in
(a) and (b) above, or in the case of any amount received
by a member of the Group from a loss of profits insurance
policy, in reimbursing such member of the Group.
8.5 RELEVANT RECEIPTS
8.5.1 The Borrowers shall following the receipt by any member of the
Ringfenced Group of any amount (each such receipt being a "RELEVANT
RECEIPT") in respect of claims under the Merger Agreement or in
respect of Reports apply (without premium or penalty, but without
prejudice to Clause 11.4) such amount in prepayment of such of the
Series 1 Term Facilities (or if all such Facilities are repaid in
full, Series 2 Term Facilities) as the Agent may direct on the next
Interest Payment Date unless such amount is utilised:
(a) to the extent the Relevant Receipt relates to a liability
of, or a charge or claim upon, a member of the Group, in
the discharge of that liability, charge or claim (or in
reimbursement of monies disturbed in connection with such
liability, charge or claim) provided that such monies
shall be properly applied in such manner within three
months of receipt by the relevant member of the Group; or
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(b) to the extent the Relevant Receipt relates to an asset
reasonably required in the conduct of the Group's business
or to compensate for any current asset which is missing or
reduced in value, in the acquisition of that asset or in
compensation for the loss represented by that missing
current asset or reduction in value provided that such
monies shall be properly applied in such manner within six
months of receipt by the relevant member of the Group.
8.5.2 Where the Agent has served a notice under Clause 23, the Borrowers
shall, following the receipt of any amounts in respect of insurance
claims or any Relevant Receipt apply (without premium or penalty, but
without prejudice to Clause 11.4) such amount in prepayment of such
of the Series 1 Term Facilities (or if all such Facilities are repaid
in full, Series 2 Term Facilities) as the Agent may direct.
8.5.3 Pending every such prepayment as is referred to above, or any
permitted utilisation of Relevant Receipts as is referred to above,
the Parent shall on the date of the Relevant Receipt procure that an
amount, or amounts in aggregate, equal to the Relevant Receipt is
placed in a Security Account with the Security Trustee.
8.6 NOTICE
The Parent shall give the Agent at least 30 days prior notice of the
date upon which a change of Control, Sale, or Listing is proposed to
occur.
8.7 CASH SWEEP
If upon any test as at 31 December in any year (in accordance with
Clause 21.1.6) of the cash flow covenant referred to in Clause 21.1.4
after the third anniversary of the signing of this Agreement the
relevant ratio is met that sum representing 50% of the Surplus shall
be applied in prepayment of such Series 1 Term Facilities (or if all
such Facilities are repaid in full, Series 2 Term Facilities) as the
Agent may direct on the first Interest Payment Date occurring after
the relevant covenant test date; provided that in any circumstances
where the terms of this Clause 8.7 would otherwise result in the
payment of any costs by a Borrower in terms of Clause 11.4 the
relevant prepayment shall be reduced in amount so as to avoid such
costs and the amount of such reduction shall be applied in prepayment
as contemplated by this Clause 8.7 but upon the then next succeeding
Interest Payment Date. Declaring also, for the avoidance of doubt,
that the terms of Clause 21.1.7 shall apply for the purposes of this
Clause 8.7 to the intent and effect that calculations and prepayments
pursuant to this Clause 8.7 shall initially be made on the basis of
Management Accounts and the parties shall make any adjustment
payments required upon retesting against audited financial
statements.
8.8 VOLUNTARY CANCELLATION
The Parent may, if it gives the Agent not less than 7 Business Days'
(or such shorter period as the Majority Lenders may agree) prior
notice, cancel the whole or any part (being a minimum amount of
L250,000) of an Available Facility. Any cancellation under this
Clause 8.8 shall reduce the Commitments of the Lenders rateably under
that Facility.
8.9 VOLUNTARY PREPAYMENT OF SERIES 1 TERM FACILITIES
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8.9.1 A Borrower to which a Series 1 Term Facility Loan has been made may,
if it gives the Agent not less than 7 Business Days' (or such shorter
period as the Majority Lenders may agree) prior notice, prepay the
whole or any part of the relevant Series 1 Term Facility Loan (but,
if in part, being an amount which reduces the amount of the Term
Facility 1 Loan by a minimum amount of L250,000 and which is an
integral multiple of L250,000).
8.9.2 A Series 1 Term Facility Loan may only be prepaid after the last day
of the relevant Availability Period (or, if earlier, the day on which
the applicable Available Facility is zero).
8.9.3 Any prepayment under this Clause 8.9 shall be applied pro rata
against the relevant future Series 1 Term Facility Repayment
Instalments specified in Clause 7.1 until the relevant Series 1 Term
Facility has been repaid in full.
8.10 VOLUNTARY PREPAYMENT OF SERIES 2 TERM FACILITIES
8.10.1 A Borrower to which a Series 2 Term Facility Loan has been made may,
at any time after (but not before) repayment of all the Series 1 Term
Facilities in full together with all interest thereon, if it gives
the Agent not less than 7 Business Days' (or such shorter period as
the Majority Lenders may agree) prior notice, prepay the whole or any
part of any Series 2 Term Facility Loan (but if in part, being an
amount which reduces the amount of the Series 2 Term Facility Loan by
a minimum amount of L250,000 and which is an integral multiple of
L250,000).
8.10.2 A Series 2 Term Facility Loan may only be prepaid after the last date
of the Availability Period (or, if earlier, the day on which the
applicable Available Facility is zero).
8.10.3 Any prepayment under this Clause 8.10 shall be applied pro rata
against the relevant future Series 2 Term Facility Repayment
Instalments specified in Clause 7.2 until the relevant Series 2 Term
Facility 2 has been repaid in full.
8.11 VOLUNTARY PREPAYMENT OF CAPITAL EXPENDITURE FACILITY
8.11.1 A Borrower to which a Capital Expenditure Facility Loan has been made
may, at any time after (but not before) repayment of Term Facility 1
in full together with all interest thereon, if it gives the Agent not
less than 7 Business Day's (or such shorter period as the Majority
Lenders may agree) prior notice prepay the whole or any part of any
Capital Expenditure Facility Loan (but, if in part, being an amount
which reduces the amount of the Capital Expenditure Facility Loan by
a minimum amount of L250,000 and which is an integral multiple of
L250,000.
8.11.2 A Capital Expenditure Facility Loan may only be prepaid after the
last day of the Availability Period or, if earlier, the day on which
the applicable Available Facility is zero.
8.11.3 Any prepayment under this Clause 8.11 shall be applied pro rata
against the future Capital Expenditure Facility Repayment Instalments
specified in Clause 7.3 until the Capital Expenditure Facility has
been repaid in full.
8.12 RIGHT OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER
8.12.1 If:
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(a) any sum payable to any Lender by an Obligor is required to
be increased under paragraph (c) of Clause 13.2; or
(b) any Lender claims indemnification from the Parent under
Clause 13.3 or Clause 14.1,
the Parent may, whilst the circumstance giving rise to the
requirement or indemnification continues, give the Agent notice of
cancellation of the Commitment of that Lender and its intention to
procure the repayment of that Lender's participation in the Loans.
8.12.2 On receipt of a notice referred to in Clause 8.12.1, the Commitment
of that Lender shall immediately be reduced to zero.
8.12.3 On the last day of each Interest Period which ends after the Parent
has given notice under Clause 8.12.1 (or, if earlier, the date
specified by the Parent in that notice), each Borrower to which a
Loan is outstanding shall repay that Lender's participation in that
Loan.
8.13 RESTRICTIONS
8.13.1 Any notice of cancellation or prepayment given by any Party under
this Clause 8 shall be irrevocable and, unless a contrary indication
appears in this Agreement, shall specify the date or dates upon which
the relevant cancellation or prepayment is to be made and the amount
of that cancellation or prepayment.
8.13.2 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Break
Costs, without premium or penalty save that where any prepayment or
cancellation of all or any part of the Loans or the Facilities
(including for the avoidance of doubt the Working Capital Facility)
other than in the circumstances contemplated in Clause 8.1.1 or
8.12.1 is made pursuant to, in contemplation of or otherwise in
connection with a refinancing of the Facilities (or part of them)
(including for the avoidance of doubt the Working Capital Facility)
during the period of 18 months commencing on the Drawdown Date by any
bank or financial institution other than the Lenders, the Parent
shall promptly on demand by the Agent pay the Agent on account of the
Lenders (or as appropriate the Working Capital Bank) a prepayment fee
equal to one per cent (1%) of the amount prepaid or cancelled on the
Business Day immediately prior to such prepayment or cancellation.
8.13.3 The Borrowers shall not repay or prepay all or any part of the Loans
or cancel all or any part of the Commitments (including the Working
Capital Facility Commitments) except at the times and in the manner
expressly provided for in this Agreement.
8.13.4 No amount of the Total Commitments cancelled under this Agreement may
be subsequently reinstated.
8.13.5 If the Agent receives a notice under this Clause 8 it shall promptly
forward a copy of that notice to either the Parent or the affected
Lender, as appropriate.
9 INTEREST ETC
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9.1 SERIES 1 TERM FACILITIES, SERIES 2 TERM FACILITIES AND CAPITAL
EXPENDITURE FACILITIES
9.1.1 CALCULATION OF INTEREST
The rate of interest on each Loan for each Interest Period is the
percentage rate per annum which is the aggregate of the applicable:
(a) Margin;
(b) LIBOR; and
(c) Mandatory Cost, if any.
9.1.2 PAYMENT OF INTEREST
Each Borrower to which a Loan has been made shall pay accrued
interest on that Loan on the last day of each Interest Period (and,
if the Interest Period is longer than six months, on the dates
falling at six monthly intervals after the first day of the Interest
Period).
9.1.3 DEFAULT INTEREST
9.1.3.1 If an Obligor fails to pay any amount payable by it under a Finance
Document in respect of a Series 1 Term Facility Loan, Series 2 Term
Facility Loan or a Capital Expenditure Loan on its due date, interest
shall accrue on the overdue amount from the due date up to the date
of actual payment (both before and after judgment) at a rate one per
cent 1% higher than the rate which would have been payable if the
overdue amount had, during the period of non-payment, constituted a
Loan in the currency of the overdue amount for successive Interest
Periods, each of a duration selected by the Agent (acting
reasonably). Any interest accruing under this Clause 9.1.3.1 shall be
immediately payable by the Borrower on demand by the Agent.
9.1.3.2 Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
9.1.4 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the Lenders and the relevant Borrower
of the determination of a rate of interest under this Agreement.
9.2 WORKING CAPITAL FACILITY
9.2.1 OVERDRAFT INTEREST
Interest on all amounts outstanding by way of overdraft under the
Working Capital Facility shall accrue at the rate per annum which is
the aggregate of:
9.2.1.1 the Margin; and
9.2.1.2 in respect of any amounts denominated in Sterling outstanding under
the overdraft the most recently published base rate of the Working
Capital Bank from time to time or, in respect of any amounts
denominated in the Optional Currency
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outstanding under the overdraft Canadian LIBOR as quoted in the
London financial markets.
9.2.2 PAYMENT AND ACCRUAL
Interest under Clause 9.2.1 on amounts outstanding by way of
overdraft under the Working Capital Facility shall be paid by the
relevant Borrower to the Working Capital Bank, on the Working Capital
Bank's usual quarterly charging days and the Working Capital
Repayment Date and will accrue from day to day on the basis of actual
days elapsed and a year of 365 days (in the case of Sterling
borrowings) or 360 days (in the case of Canadian Dollar or Optional
Currency (other than Sterling) borrowings).
9.2.3 FFE CONTRACTS
In respect of each FFE Contract, the relevant Borrower shall pay fees
and commissions to the Working Capital Bank in accordance with the
Working Capital Bank's usual charging scales as notified to the
Company from time to time for entering into forward foreign exchange
contracts.
9.2.4 GUARANTEE COMMISSION
9.2.4.1 In respect of each Bank Guarantee issued by the Working Capital Bank
under the Working Capital Facility each Borrower for whose account
such Bank Guarantee is issued shall pay commission on the Guaranteed
Amount of such Bank Guarantee from the date of its issue until it has
ceased to be in full force and effect in accordance with Clause 6.6.5
at a rate per annum equal to the Margin which shall:
(a) accrue from day to day on the Guaranteed Amount of such
Bank Guarantee; and
(b) be calculated on the basis of actual days elapsed and a
365 day year if the Guarantee is denominated in Sterling
and 360 days if in any other currency unless the normal
market practice in respect of that currency is for
calculations to be made on the basis of a year of 360 days
in which case that practice will be adopted.
9.2.4.2 Each Bank Guarantee will be deemed to have been issued on behalf of
the Borrower specified in the Guarantee Request relating to that Bank
Guarantee.
9.2.4.3 For the purpose of calculating the amount of guarantee commission
payable from time to time the period of issue of each Bank Guarantee
shall be divided into successive three months periods (each a
"GUARANTEE COMMISSION PERIOD") each of which (other than the first
which shall begin on the first date on which a Bank Guarantee is
issued) shall begin on the expiry of the preceding one. If the full
period of the Bank Guarantee does not exceed 3 months the guarantee
commission period relating thereto shall be such full period. The
guarantee commission shall be payable in arrear on the last day of
each guarantee commission period or, if earlier, on the date on which
the Guaranteed Amount in respect of such Bank Guarantee is reduced to
nil.
9.2.5 OTHER UTILISATIONS
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Any other facilities or financial accommodation made available under
the Working Capital Facility shall be charged to the relevant
Borrower by the Working Capital Bank in accordance with its customary
rates or scales as notified to the Borrower from time to time.
9.2.6 DEFAULT INTEREST
If a Borrower fails to pay an amount of principal, interest or any
other sum (an "OVERDUE SUM") when it is due in respect of the Working
Capital Facility, interest shall accrue on the overdue sum from the
due date up to the date of actual payment (both before and after
decree or judgement). Such interest shall be calculated and payable
by reference to successive periods ("DEFAULT PERIODS") each of such
duration as the Agent may select. The first Default Period shall
begin on the due date and all subsequent Default Periods shall begin
on the last day of the previous one. The rate of interest for each
such Default Period shall be the rate per annum (as determined by the
Agent) equal to the sum of one per cent (1%) higher than the rate,
charge or commission determined in accordance with this Clause 9.2 in
respect of the relevant Utilisation. Any interest payable under this
Clause 9.2.6 which is not paid when due shall be deemed an overdue
sum and shall itself bear interest accordingly.
9.2.7 DEBITING OF ACCOUNTS
Each Borrower hereby authorised the Working Capital Bank to debit all
interest, fees and commissions due and payable by such Borrower under
this Clause 9.2 to any account held by the Borrower with the Working
Capital Bank.
9.2.8 PAYMENTS TO WORKING CAPITAL BANKS
Upon receipt of the same the Working Capital Bank shall pay to the
Agent for the account of the Working Capital Banks the Margin which
it receives in respect of the Working Capital Facility and each
Working Capital Lender shall participate in the same in its relevant
participation (as defined in Clause 6.10).
10 INTEREST PERIODS
10.1 SELECTION OF INTEREST PERIODS
10.1.1 A Borrower (or the Parent on behalf of a Borrower) may select an
Interest Period for a Loan in the Utilisation Request for that Loan
or (if the Loan has already been borrowed) in a Selection Notice.
10.1.2 Each Selection Notice for a Series 1 Term Facility Loan, Series 2
Term Facility Loan or Capital Expenditure Facility Loan is
irrevocable and must be delivered to the Agent by the Borrower (or
the Parent on behalf of a Borrower) to which that Loan was made not
later than the Specified Time.
10.1.3 If a Borrower (or the Parent) fails to deliver a Selection Notice to
the Agent in accordance with Clause 10.1.2, the relevant Interest
Period will, subject to Clause 10.2, be one Month.
10.1.4 Subject to this Clause 10 a Borrower (or the Parent) may select an
Interest Period of one, three or six months or any other period
agreed between the Parent and the Agent (acting on the instructions
of all the Lenders).
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10.1.5 In addition a Borrower (or the Parent on its behalf) may select an
Interest Period in relation to the Series 1 Term Facility, Series 2
Term Facility or Capital Expenditure Facility of a period of less
than one month, if necessary to ensure that in respect of the
relevant Facility there are Loans (with an aggregate amount equal to
or greater than the relevant Repayment Instalment) which have an
Interest Period ending on a Repayment Date for the Borrower to make
the Repayment Instalment due on that date.
10.1.6 An Interest Period for a Loan shall not extend beyond the Final
Repayment Date applicable to its Facility.
10.1.7 Each Interest Period for a Series 1 Term Facility Loan, Series 2 Term
Facility Loan and Capital Expenditure Facility Loan shall start on
the Utilisation Date or (if already made) on the last day of its
preceding Interest Period.
10.1.8 Notwithstanding any other provision of this Agreement to the contrary
each Borrower shall select such Interest Periods under the terms of
this Agreement as may be necessary to ensure that to the extent there
exists any Hedging Agreement applicable to any Loan borrowed by the
relevant Borrower the Interest Periods applicable thereto coincide
with scheduled payment dates under the relevant Hedging Agreement.
10.2 CHANGES TO INTEREST PERIODS
10.2.1 Prior to determining the interest rate for a Series 1 Term Facility
Loan, Series 2 Term Facility Loan or Capital Expenditure Facility
Loan the Agent may shorten an Interest Period for the relevant Loan
to ensure there are sufficient Loans in respect of the relevant
Facility with an Interest Period ending on a Repayment Date for the
relevant Borrower to make the Repayment Instalment due on the
relevant Repayment Date.
10.2.2 If the Agent makes any of the changes to an Interest Period referred
to in this Clause 10.2, it shall promptly notify the Parent and the
Lenders.
10.3 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period will instead end on the next
Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).
11 CHANGES TO THE CALCULATION OF INTEREST
11.1 ABSENCE OF QUOTATIONS
Subject to Clause 11.2, if LIBOR is to be determined by reference to
the Reference Lenders but a Reference Lender does not supply a
quotation by the Specified Time on the Quotation Day, the applicable
LIBOR shall be determined on the basis of the quotations of the
remaining Reference Lenders.
11.2 MARKET DISRUPTION
11.2.1 If a Market Disruption Event occurs in relation to a Loan for any
Interest Period, then the rate of interest on each Lender's share of
that Loan for the Interest Period shall be the rate per annum which
is the sum of:
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(a) the Margin;
(b) the rate notified to the Agent by that Lender as soon as
practicable and in any event before interest is due to be
paid in respect of that Interest Period, to be that which
expresses as a percentage rate per annum the cost to that
Lender of funding its participation in that Loan from
whatever source it may reasonably select; and
(c) the Mandatory Cost, if any, applicable to that Lender's
participation in the Loan.
11.2.2 In this Agreement "MARKET DISRUPTION EVENT" means:
(a) at or about noon on the Quotation Day for the relevant
Interest Period the Screen Rate is not available and none
of the Reference Lenders supplies a rate to the Agent to
determine LIBOR for the relevant currency and period; or
(b) before close of business in London on the Quotation Day
for the relevant Interest Period, the Agent receives
notifications from a Lender or Lenders (whose
participations in a Loan exceed fifty per cent. of that
Loan) that the cost to it or them of obtaining matching
deposits in the Relevant Interbank Market would be in
excess of LIBOR.
11.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
11.3.1 If a Market Disruption Event occurs and the Agent or the Parent so
requires, the Agent and the Parent shall enter into negotiations (for
a period of not more than thirty days) with a view to agreeing a
substitute basis for determining the rate of interest.
11.3.2 Any substitute basis agreed pursuant to Clause 11.3.1 shall, with the
prior consent of all the Lenders and the Parent, be binding on all
Parties.
11.4 BREAK COSTS
11.4.1 Each Borrower shall, within three Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs attributable
to all or any part of a Loan or Unpaid Sum being paid by that
Borrower on a day other than the last day of an Interest Period for
that Loan or Unpaid Sum.
11.4.2 Each Lender shall, as soon as reasonably practicable after a demand
by the Agent, provide a certificate confirming the amount of its
Break Costs for any Interest Period in which they accrue.
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12 FEES
12.1 COMMITMENT FEES
12.1.1 The Parent shall pay to the Agent (for the account of the Working
Capital Banks in relation to the Working Capital Facility, and for
the account of each Lender in relation to the other Facilities) a fee
computed at the rate of:
(a) 0.75 per cent. per annum on that Lender's Available
Commitment under each Series 1 Term Facility for the
Availability Period applicable to the Series 1 Term
Facilities;
(b) 0.75 per cent. per annum on that Lender's Available
Commitment under the each Series 2 Term Facility for the
Availability Period applicable to the Series 2 Term
Facilities;
(c) 0.75 per cent. per annum on that Lender's Available
Commitment under the Capital Expenditure Facility for the
Availability Period applicable to the Capital Expenditure
Facility;
(d) 0.75 per cent per annum on the Working Capital Banks
Working Capital Available Amount for the Availability
Period applicable to the Working Capital Facility.
12.1.2 Subject to Clause 12.1.3 the accrued commitment fees are payable in
the case of paragraphs (a) and (b) above on the expiry of the
Availability Period and in the case of paragraphs (c) and (d) above
on the last day of each successive period of three Months which ends
during the relevant Availability Period, on the last day of the
Availability Period and on the cancelled amount of the relevant
Lender's or Working Capital Banks' Commitment (as the case may be) at
the time the cancellation is effective.
12.1.3 Upon cancellation of any Facility any accrued commitment fees in
respect of that Facility shall be immediately payable.
13 TAX GROSS UP AND INDEMNITIES
13.1 DEFINITIONS
13.1.1 In this Clause 13:
"PROTECTED PARTY" means a Finance Party which is or will be, for or
on account of Tax, subject to any liability or required to make any
payment in relation to a sum received or receivable (or any sum
deemed for the purposes of Tax to be received or receivable) under a
Finance Document.
"QUALIFYING LENDER" means a Finance Party which is (on the date a
payment falls due):
(a) within the charge to United Kingdom corporation tax as
respects that payment and is a Finance Party in respect of
an advance made by a person which was a bank (as defined
for the purpose of section 349 of the Taxes Act in section
840A of the Taxes Act) at the time that advance was made;
or
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(b) entitled to that payment under a double taxation agreement
in force on the date (subject to the completion of any
necessary procedural formalities) without a Tax Deduction
(a "TREATY Lender").
"TAX CREDIT" means a credit against, relief or remission for, or
repayment of any Tax.
"TAX DEDUCTION" means a deduction or withholding for or on account of
Tax from a payment under a Finance Document.
"TAX PAYMENT" means an increased payment made by an Obligor to a
Finance Party under Clause 13.2 or a payment under Clause 13.3.
13.1.2 In this Clause 13 a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making
the determination.
13.2 TAX GROSS-UP
13.2.1 Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
13.2.2 The Parent or a Lender or the Working Capital Bank shall promptly
upon becoming aware that an Obligor must make a Tax Deduction (or
that there is any change in the rate or the basis of a Tax Deduction)
notify the Agent accordingly. If the Agent receives such notification
from a Lender or the Working Capital Bank it shall notify the Parent
and that Obligor.
13.2.3 If a Tax Deduction is required by law to be made by an Obligor in one
of the circumstances set out in Clause 13.2.4, the amount of the
payment due from that Obligor shall be increased to an amount which
(after making any Tax Deduction) leaves an amount equal to the
payment which would have been due if no Tax Deduction had been
required.
13.2.4 The circumstances referred to in Clause 13.2.3 are where a person
entitled to the payment:
(a) is the Agent or the Arranger (on its own behalf); or
(b) is a Qualifying Lender, unless that Qualifying Lender is a
Treaty Lender and the Obligor making the payment is able
to demonstrate the Tax Deduction is required to be made as
a result of the failure of that Qualifying Lender to
comply with Clause 13.2.7; or
(c) is not or has ceased to be a Qualifying Lender to the
extent that this altered status results from any change
after the date of this Agreement in (or in the
interpretation, administration, or application of) any law
or double taxation agreement or any published practice or
published concession of any relevant taxing authority.
13.2.5 If an Obligor is required to make a Tax Deduction, that Obligor shall
make that Tax Deduction and any payment required in connection with
that Tax Deduction within the time allowed and in the minimum amount
required by law.
13.2.6 Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making
that Tax Deduction shall
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deliver to the Agent for the Finance Party entitled to the payment
evidence reasonably satisfactory to that Finance Party that the Tax
Deduction has been made or (as applicable) any appropriate payment
paid to the relevant taxing authority.
13.2.7 A Treaty Lender and each Obligor which makes a payment to which that
Treaty Lender is entitled shall co-operate in completing any
procedural formalities necessary for that Obligor to obtain
authorisation to make that payment without a Tax Deduction.
13.3 TAX INDEMNITY
13.3.1 The Parent shall (within three Business Days of demand by the Agent)
pay to a Protected Party an amount equal to the loss, liability or
cost which that Protected Party determines will be or has been
(directly or indirectly) suffered for or on account of Tax by that
Protected Party.
13.3.2 Clause 13.3.1 above shall not apply with respect to any Tax assessed
on:
(a) a Finance Party:
(i) under the law of the jurisdiction in which that
Finance Party is incorporated or, if different,
the jurisdiction (or jurisdictions) in which
that Finance Party is treated as resident for
tax purposes; or
(ii) under the law of the jurisdiction in which that
Finance Party's Facility Office is located in
respect of amounts received or receivable in
that jurisdiction,
if that Tax is imposed on or calculated by reference to
the net income received or receivable (but not any sum
deemed to be received or receivable) by that Finance
Party; or
(b) the Agent, as a result of the failure by a Lender to
satisfy on the due date of a payment of interest either of
the conditions set out in paragraphs (a) and (b) of Clause
27.15.
13.3.3 A Protected Party making, or intending to make a claim pursuant to
Clause 13.3.1 shall promptly notify the Agent of the event which will
give, or has given, rise to the claim, following which the Agent
shall notify the Parent.
13.3.4 A Protected Party shall, on receiving a payment from an Obligor under
this Clause 13.3, notify the Agent.
13.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) that Finance Party has obtained, utilised and retained
that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that
Finance Party determines will leave it (after that payment) in the
same after-Tax position as it would have been in had the Tax Payment
not been made by the Obligor.
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13.5 STAMP TAXES
The Parent shall pay and, within three Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that
Finance Party incurs in relation to all stamp duty, registration and
other similar Taxes payable in respect of any Finance Document.
13.6 VALUE ADDED TAX
13.6.1 All consideration payable under a Finance Document by an Obligor to a
Finance Party shall be deemed to be exclusive of any VAT. If VAT is
chargeable, the Obligor shall pay to the Finance Party (in addition
to and at the same time as paying the consideration) an amount equal
to the amount of the VAT.
13.6.2 Where a Finance Document requires an Obligor to reimburse a Finance
Party for any costs or expenses, that Obligor shall also at the same
time pay and indemnify that Finance Party against all VAT incurred by
that Finance Party in respect of the costs or expenses save to the
extent that that Finance Party is entitled to repayment or credit in
respect of the VAT.
14 INCREASED COSTS
14.1 INCREASED COSTS
14.1.1 Subject to Clause 14.3 the Parent shall, within three Business Days
of a demand by the Agent, pay for the account of a Finance Party the
amount of any Increased Costs incurred by that Finance Party or any
of its Affiliates as a result of:
(a) the introduction of or any change in (or in the
interpretation or application of) any law or regulation;
or
(b) compliance with any law or regulation made after the date
of this Agreement.
14.1.2 In this Agreement "INCREASED COSTS" means:
(a) a reduction in the rate of return from any Facility or on
a Finance Party's (or its Affiliate's) overall capital;
(b) an additional or increased cost; or
(c) a reduction of any amount due and payable under any
Finance Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance
Party having entered into its Commitment or funding or performing its
obligations under any Finance Document.
14.2 INCREASED COST CLAIMS
14.2.1 A Finance Party intending to make a claim pursuant to Clause 14.1
shall notify the Agent of the event giving rise to the claim,
following which the Agent shall promptly notify the Parent.
14.2.2 Each Finance Party shall, as soon as practicable after a demand by
the Agent, provide a certificate confirming the amount of its
Increased Costs.
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14.3 EXCEPTIONS
14.3.1 Clause 14.1 does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made
by an Obligor;
(b) compensated for by Clause 13.3 (or would have been
compensated for under Clause 13.3 but was not so
compensated solely because one of the exclusions in Clause
13.3.2 applied);
(c) compensated for by the payment of the Mandatory Cost; or
(d) attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation.
14.3.2 In this Clause 14.3, a reference to a "TAX DEDUCTION" has the same
meaning given to the term in Clause 13.1.
15 OTHER INDEMNITIES
15.1 CURRENCY INDEMNITY
15.1.1 If any sum due from an Obligor under the Finance Documents (a "SUM"),
or any order, judgment or award given or made in relation to a Sum,
has to be converted from the currency (the "FIRST CURRENCY") in which
that Sum is payable into another currency (the "SECOND CURRENCY") for
the purpose of:
(a) making or filing a claim or proof against that Obligor;
(b) obtaining or enforcing an order, decree, judgment or award
in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three
Business Days of demand, indemnify each Finance Party to whom that
Sum is due against any cost, loss or liability arising out of or as a
result of the conversion including any discrepancy between:
(i) the rate of exchange used to convert that Sum
from the First Currency into the Second
Currency; and
(ii) the rate or rates of exchange available to that
person at the time of its receipt of that Sum.
15.1.2 Each Obligor waives any right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency or currency unit
other than that in which it is expressed to be payable.
15.2 OTHER INDEMNITIES
The Parent shall (or shall procure that an Obligor will), within
three Business Days of demand, indemnify each Finance Party against
any cost, loss or liability incurred by that Finance Party as a
result of:
(a) the occurrence of any Event of Default;
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(b) a failure by an Obligor to pay any amount due under a
Finance Document on its due date;
(c) funding, or making arrangements to fund, its participation
in a Loan requested by a Borrower in a Utilisation Request
or a proposed Utilisation under the Working Capital Facility
but not made by reason of the operation of any one or more
of the provisions of this Agreement (other than by reason of
default or negligence by that Lender alone); or
(d) a Loan (or part of a Loan) not being prepaid in accordance
with a notice of prepayment given by a Borrower or the
Parent.
15.3 INDEMNITY TO THE AGENT
The Parent shall promptly indemnify the Agent against any cost, loss
or liability incurred by the Agent (acting reasonably) as a result of:
(a) investigating any event which it reasonably believes is a
Default following consultation on such matter with the
Parent; or
(b) acting or relying on any notice, request or instruction
which it reasonably believes to be genuine, correct and
appropriately authorised.
16 MITIGATION BY THE FINANCE PARTIES
16.1 MITIGATION
16.1.1 Each Finance Party shall, in consultation with the Parent, take all
reasonable steps to mitigate any circumstances which arise and which
would result in any amount becoming payable under, or cancelled
pursuant to, any of Clause 8.1, Clause 13 or Clause 14 including (but
not limited to) transferring its rights and obligations under the
Finance Documents to another Affiliate or Facility Office.
16.1.2 Clause 16.1.1 does not in any way limit the obligations of any Obligor
under the Finance Documents.
16.2 LIMITATION OF LIABILITY
16.2.1 The Parent shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps taken by it under Clause 16.1.
16.2.2 A Finance Party is not obliged to take any steps under Clause 16.1 if,
in the opinion of that Finance Party (acting reasonably), to do so
might be prejudicial to it.
17 COSTS AND EXPENSES
17.1 TRANSACTION EXPENSES
The Parent shall promptly on demand pay the Agent and the Arranger the
amount of all costs and expenses (including legal fees) reasonably
incurred by any of them in connection with the negotiation,
preparation, printing, execution and syndication of:
(a) this Agreement and any other documents referred to in this
Agreement; and
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(b) any other Finance Documents executed after the date of this
Agreement.
17.2 AMENDMENT COSTS
If:
(a) an Obligor requests an amendment, waiver or consent; or
(b) an amendment is required pursuant to Clause 30.9,
the Parent shall, within three Business Days of demand, reimburse the
Agent for the amount of all costs and expenses (including legal fees)
reasonably incurred by the Agent in responding to, evaluating,
negotiating or complying with that request or requirement.
17.3 ENFORCEMENT COSTS
The Parent shall, within three Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal
fees) incurred by that Finance Party in connection with the
enforcement of, or the preservation of any rights under, any Finance
Document.
18 GUARANTEE AND INDEMNITY
18.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to each Finance Party or (in the case of Canada
Holdco and any other Canadian Guarantor from time to time
only) the Security Trustee punctual performance by each
Borrower of all that Borrower's obligations under the
Finance Documents;
(b) undertakes with each Finance Party that whenever a Borrower
does not pay any amount when due under or in connection with
any Finance Document, that Guarantor shall immediately on
demand pay that amount as if it was the principal obligor;
and
(c) undertakes to indemnify each Finance Party immediately on
demand against any cost, loss or liability suffered by that
Finance Party if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal. The amount of the
cost, loss or liability shall be equal to the amount which
that Finance Party would otherwise have been entitled to
recover.
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18.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance
Documents, regardless of any intermediate payment or discharge in
whole or in part.
18.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by a Finance Party
(whether in respect of the obligations of any Obligor or any security
for those obligations or otherwise) is avoided or reduced as a result
of insolvency or any similar event:
(a) the liability of each Obligor shall continue as if the
payment, discharge, avoidance or reduction had not occurred;
and
(b) each Finance Party shall be entitled to recover the value or
amount of that security or payment from each Obligor, as if
the payment, discharge, avoidance or reduction had not
occurred.
18.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 18 will not be
affected by an act, omission, matter or thing which, but for this
Clause, would reduce, release or prejudice any of its obligations
under this Clause 18 (without limitation and whether or not known to
it or any Finance Party) including:
(a) any time, waiver or consent granted to, or composition with,
any Obligor or other person;
(b) the release of any other Obligor or any other person under
the terms of any composition or arrangement with any
creditor of any member of the Group;
(c) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any
Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full
value of any security;
(d) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or
status of an Obligor or any other person;
(e) any amendment (however fundamental) or replacement of a
Finance Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security; or
(g) any insolvency or similar proceedings.
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18.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from
any person before claiming from that Guarantor under this Clause 18.
This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
18.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Finance Party (or any trustee or agent on its behalf)
may:
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance Party
(or any trustee or agent on its behalf) in respect of those
amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or
otherwise) and no Guarantor shall be entitled to the benefit
of the same; and
(b) hold in an interest-bearing suspense account any moneys
received from any Guarantor or on account of any Guarantor's
liability under this Clause 18.
18.7 DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full and unless the Agent otherwise directs, no Guarantor will
exercise any rights which it may have by reason of performance by it
of its obligations under the Finance Documents:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any
Obligor's obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Finance
Parties under the Finance Documents or of any other
guarantee or security taken pursuant to, or in connection
with, the Finance Documents by any Finance Party.
18.8 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by
any other guarantee or security now or subsequently held by any
Finance Party.
19 REPRESENTATIONS
Each Obligor makes the representations and warranties set out in this
Clause 19 to each Finance Party on the date of this Agreement.
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19.1 STATUS
19.1.1 It is a corporation, duly incorporated and validly existing under the
law of its jurisdiction of incorporation.
19.1.2 It and each other Material Company has the power to own its assets and
carry on its business as it is being conducted.
19.2 POWER AND AUTHORITY
Each Obligor has power to execute, deliver and perform its obligations
under the Transaction Documents to which it is a party; all necessary
corporate, shareholder or other action has been taken to authorise the
execution, delivery and performance of such Transaction Documents and
no limitation on the powers of any such Obligor or its Directors shall
be exceeded as a result of the drawdown of the Loan or the utilisation
of the Facilities.
19.3 BINDING OBLIGATIONS
The Transaction Documents constitute legal, valid and binding
obligations of each Obligor which is a party to them and are
enforceable (subject to the Reservations), in accordance with their
respective terms.
19.4 NON-CONFLICT WITH OTHER OBLIGATION
The entry into and performance of the terms and conditions of the
Transaction Documents by each relevant Obligor do not and shall not
contravene or conflict with its memorandum and articles of
association, any law, statute, rule, regulation, judgement, decree or
other instrument binding on it or any of its assets, or any agreement
or document to which it is a party or is binding on it or any of its
assets and all acts, conditions and things required to be done,
fulfilled and performed in order:
(a) to enable it lawfully to enter into, exercise its rights
under and perform the obligations expressed to be assumed by
it in the Transaction Documents; and
(b) to ensure that the obligations expressed to be assumed by it
in the Transaction Documents are legal, valid and binding,
have been undertaken;
19.5 NO DEFAULT
19.5.1 No Material Company is (nor with the giving of notice, lapse of time
or satisfaction of any other condition would be) in breach of or in
default under any agreement or document to which it is a party or by
which it or any part of its assets may be bound which would have a
Material Adverse Effect;
19.5.2 No Event of Default, Default or Mandatory Prepayment Event has
occurred.
19.6 NO PROCEEDINGS PENDING OR THREATENED
No action, litigation, arbitration or administrative proceeding is
taking place, pending or so far as each Obligor is aware having made
all appropriate enquiries threatened against any Material Company or
any part of their respective
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undertakings, assets or revenues which is, in the reasonable opinion
of the Agent, likely to be adversely determined and if adversely
determined is likely to have a Material Adverse Effect;
19.7 NO SECURITY
No Material Company has assets which are affected by any Security, nor
is any such company a party to, nor is it or any of its assets bound
by, any order, agreement or instrument under which it is, or may be,
required to create, assume or permit to arise any Security, other than
in each case any Permitted Security Interest;
19.8 CORPORATE STRUCTURE
The corporate structure of the Group following Closing and before the
Intra Group Transfer shall be as set out in Schedule 12 and (other
than the Overseas Companies) each Group Company is resident in the
United Kingdom for tax purposes;
19.9 NO BORROWINGS
No Group Company has any Financial Indebtedness save for Permitted
Financial Indebtedness;
19.10 BUSINESS PLAN
19.10.1 All statements of fact recorded in the Business Plan are true and
accurate in all material respects; the opinions and views expressed in
the Business Plan represent the honestly held opinions and views of
the Parent and Management Team and were arrived at after careful
consideration and are based on reasonable grounds; the projections and
forecasts contained in the Business Plan are based upon assumptions
(including assumptions as to the future performance of the Target
Group, inflation, price increases, interest rates and efficiency
gains) which the Parent and Management Team have carefully considered
and considered to be fair and reasonable; the Business Plan is not
misleading in any material respect and does not omit to disclose any
matter where failure to disclose such matter would result in the
Business Plan (or any information or projection contained therein) to
be misleading in any material respect; and nothing has occurred or
come to light since the date as at which the Business Plan was
prepared which renders any material facts contained in the Business
Plan inaccurate or misleading or which makes any of the opinions,
projections or forecasts contained therein other than fair and
reasonable or renders any of the assumptions upon which the
projections are based other than fair and reasonable;
19.11 REPORTS
All written information supplied by or on behalf of the Parent and by
their respective agents and advisers in connection with this Agreement
and the preparation of the Reports was true, complete and accurate in
all material respects at the dates supplied (or, if not, has
subsequently been corrected and such correction is reflected in the
Reports), all statements of fact recorded in the Reports are true and
accurate in all material respects; none of the Reports (or any part
thereof) is misleading in any material respect and there is no
expression of opinion, forecast or projection contained in the Reports
or any conclusion reached therein in relation to any material matter
which is not fair and reasonable in all material respects so far as
the Parent is or ought to be aware of having made due and diligent
enquiries of the
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Management Team and all other relevant parties and there is no such
opinion, forecast, projection or conclusion with which any of the
Management Team or any other director of the Parent disagrees in any
material respect; and nothing has occurred or come to light since the
date of any Report which renders any material facts contained in that
Report inaccurate or misleading or which makes any of the opinions,
projections, forecasts or conclusions contained in the relevant Report
other than fair and reasonable;
19.12 TRANSACTION DOCUMENT REPRESENTATIONS
All representations and warranties made by or on behalf of the Parent
in the Merger Documents and Equity Documents are true and accurate in
all material respects; and to the best of the Parent's knowledge and
belief (having held discussions with the Chief Financial Officer of
Target, the Chief Executive Officer of Clintrials BioResearches
Limited and the Chief Financial Officer of Clintrials BioResearches
Limited) all representations and warranties made by or on behalf of
any Target Group Company in Merger Agreement are true and complete in
all material respects;
19.13 TARGET ACCOUNTS
To the best of the knowledge and belief of the Parent having held
discussions with the Chief Financial Officer of the Target Group, the
Target Accounts and Target Management Accounts were prepared in
accordance with GAAP consistently applied and fairly presented the
results of the operations of the Target Group for the periods to which
they relate and the state of the affairs of the Target Group at the
end of such period and, in particular, disclose or reserve against all
liabilities (actual or contingent) of the Target Group to the extent
required by GAAP and there are no material liabilities (whether
actual, contingent, present or future) which are not disclosed or
shown as being provided for in the relative Target Accounts and/or
Target Management Accounts and which have not been disclosed or
referred to in the Accountant's Report or, where they have arisen
after the date of the Accountant's Report have not been disclosed in
writing to the Lenders;
19.14 TAXES
All necessary returns have been delivered by or on behalf of each
Material Company to the relevant taxation authorities and no such
member is in default in the payment of any Taxes taking into account
any grace periods and no claim is being asserted with respect to Tax
which is not disclosed in its latest published financial statements;
19.15 INTELLECTUAL PROPERTY RIGHTS
Each Material Company owns all necessary Intellectual Property Rights
and such information systems and equipment as are required by it in
order for it to carry on its business and no notification has been
received or is anticipated to be received alleging infringement of any
such rights; all such rights are free from Security Interests (other
than the Permitted Security Interests), are not subject to the rights
of any other party and so far as the Parent is aware are not presently
being infringed by any person;
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19.16 ENVIRONMENTAL
No Material Company has infringed, or received any claim in respect
of, any provision of Environmental Law or any Environmental Licence
which would or would be reasonably likely to have Material Adverse
Effect;
19.17 ERISA
19.17.1 As of the Closing Date, no Borrower, nor any Group Company, nor any
ERISA Affiliate maintains or contributes to, or has any obligation
under, any Employee Benefit Plans other than those identified on
Schedule 6.1(I) hereto;
19.17.2 Each Borrower, each Group Company and each ERISA Affiliate is in
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all Employee
Benefit Plans except for any required amendments for which the
remedial amendment period as defined in Section 401(b) of the Code has
not yet expired. Each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the
Code. No liability has been incurred by any Borrower, any Group
Company or any ERISA Affiliate which remains unsatisfied for any taxes
or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan;
19.17.3 No Pension Plan has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been
received or requested with respect to any Pension Plan, nor has any
Borrower, any Subsidiary or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by
Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under
Section 412 of the Code or Section 302 of ERISA, nor has there been
any event requiring any disclosure under Section 4041(c)(3)(C) or
4063(a) of ERISA with respect to any Pension Plan;
19.17.4 No Borrower, Group Company or ERISA Affiliate has:
(a) engaged in a nonexempt prohibited transaction described in
Section 406 of the ERISA or Section 4975 of the Code;
(b) incurred any liability to the PBGC which remains outstanding
other than the payment of premiums and there are no premium
payments which are due and unpaid;
(c) failed to make a required contribution or payment to a
Multiemployer Plan; or
(d) failed to make a required instalment or other required
payment under Section 412 of the Code;
19.17.5 No Termination Event has occurred or is reasonably expected to occur;
and
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19.17.6 No proceeding, claim, lawsuit and/or investigation is existing or, to
the best knowledge of each Borrower and each Group Company after due
inquiry, threatened, concerning or involving any:
(a) employee welfare benefit plan (as defined in Section 3(1) of
ERISA) currently maintained or contributed to by any
Borrower, any Group Company or any ERISA Affiliate;
(b) Pension Plan; or
(c) Multiemployer Plan.
19.18 LICENCES
All licences, consents, exemptions, clearances, filings,
registrations, payments of duties or taxes, notarisations and
authorisations as are or may be necessary or desirable for the proper
conduct of its business, trade and ordinary activities and for the
performance and discharge of its obligations and liabilities under
each of the Transaction Documents and which are required in connection
with the execution, delivery, validity, enforceability or
admissibility in evidence of each of the Transaction Documents are in
full force and effect where failure would be reasonably likely to have
Material Adverse Effect;
19.19 MATERIAL FACTS
19.19.1 There are no material facts known to the Parent which if disclosed
would be reasonably likely to affect the decision of a prudent lender
whether or not to make facilities available to the Parent on the terms
of this Agreement and:
(a) so far as the Parent is aware having had discussions with
the Management Team since the date to and as at which the
Target Accounts were made up, there has been no material
adverse change in the business, assets, financial
conditions, prospects or operations of the Target Group; and
(b) so far as the Parent is aware having held discussions with
the Management Team since the date to and as at which the
Target Management Account were made up there has been no
material adverse change in the business, assets, financial
conditions, prospects or operation of the Target Group;
19.20 FINANCIAL STATEMENTS
19.20.1 Its Original Financial Statements were prepared in accordance with
GAAP consistently applied.
19.20.2 Its Original Financial Statements give a true and fair view of its
financial condition and operations (consolidated in the case of the
Parent) during the relevant financial period.
19.20.3 There has been no material adverse change in its business or financial
condition (or the business or consolidated financial condition of the
Group, in the case of the Parent) since the date to which its most
recent unaudited annual financial statements were prepared
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19.21 MERGER
19.21.1 So far as the Parent is aware, no breach of any of the representations
given by Target in the terms of the Merger Agreement (breach of which
would have a Material Adverse Effect) has occurred.
19.21.2 The Parent and US Newco each has the power and authority under the
laws of its state of incorporation and under its articles of
incorporation and by-laws to enter into and perform the Merger
Agreement (to which each is a party, respectively) and all other
agreements, documents and actions required thereunder; and all actions
(corporate or otherwise) necessary or appropriate for the execution
and performance by each Parent and US Newco of the Share Purchase and
the Merger Agreement (to which each is a party, respectively) and all
other documents, agreements and actions required thereunder have been
taken.
19.21.3 The making and performance of the Merger Agreement and all other
agreements, documents and actions required thereunder, will not
violate any provision of any law or regulation, federal, state or
local, and will not violate any provisions of the articles of
incorporation and by-laws of any of Parent or US Newco, or constitute
a default under any agreement by which Parent or US Newco or its
respective property may be bound which default would have a Material
Adverse Effect .
19.22 MARGIN STOCK
No Borrower or Group Company is engaged principally or as one of its
activities in the business of extending credit for the purpose of
purchasing or carrying any margin stock (as each such term is defined
or used in Regulation U of the Board of Governors of the Federal
Reserve System). No part of the proceeds of any of the Loans will be
used for purchasing or carrying margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors.
19.23 SOLVENCY
Excluding intercompany indebtedness, each Material Company
incorporated in any state of the USA is, and after receipt and
application of the first advance under this Agreement will be, solvent
such that:
(a) the fair value of its assets (including without limitation
the fair saleable value of the goodwill and other intangible
property of such Material Company) is greater than the total
amount of its liabilities, including without limitation,
contingent liabilities;
(b) the present fair saleable value of its assets (including
without limitation the fair saleable value of the goodwill
and other intangible property of such Material Company) is
not less than the amount that will be required to pay the
probable liability on their debts as they become absolute
and matured; and
(c) they are able to realise upon their assets and pay their
debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of
business. No Material Company intends to, nor believes that
it will, incur debts or liabilities beyond its ability to
pay as such debts and liabilities mature, and no Material
Company is engaged in
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a business or transaction, or about to engage in a business
or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to
the prevailing practice and industry in which it is engaged.
For purposes of this Clause, in computing the amount of
contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light
of all the facts and circumstances existing at such time,
represents the amount that reasonably can be expected to
become an actual matured liability of the applicable
Material Company.
19.24 REPETITION
The Repeating Representations are deemed to be made by each Obligor by
reference to the facts and circumstances then existing on:
(a) the date of each Utilisation Request and the first day of
each Interest Period;
(b) the date of each Utilisation of the Working Capital
Facility; and
(c) in the case of an Additional Obligor, the day on which it
becomes (or it is proposed that it becomes) an Additional
Obligor.
19.25 LIMITATION DURING AVAILABILITY PERIOD
No representation or warranty in any Finance Document will be given or
deemed repeated pursuant to Clause 19.24 during the Availability
Period except the Primary Warranties prior to the Drawdown Date.
20 INFORMATION UNDERTAKINGS
The undertakings in this Clause 20 remain in force from the date of
this Agreement for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force.
20.1 FINANCIAL INFORMATION
The Parent undertakes to supply to the Agent (unless the Agent acting
on the instruction of the Lenders otherwise agrees) in sufficient
copies for the Lenders:-
(a) as soon as they become available but in any event within 90
days after the end of each of its financial years its
audited consolidated financial statements for that financial
year and the audited financial statements of each Material
Company for that financial year together with a Compliance
Certificate; from the directors of the Parent;
(b) as soon as they become available but in any event no later
than 30 days after the end of each successive Management
Accounting Period consolidated Management Accounts for that
Management Accounting Period, the Management Accounts of
each Material Company for that Management Accounting Period
and aggregated (in Sterling) Management Accounts for the
Ringfenced Group for that Management Accounting Period
together with a Compliance Certificate from the directors of
the Parent;
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(c) not later than 30 days prior to the beginning of each
financial year, an Operating Budget for the Group and an
Operating Budget for the Ringfenced Group in respect of the
financial year about to commence in a form and content
satisfactory to the Agent;
(d) as it becomes available but in any event not later than 90
days after the end of each financial year a certificate from
the financial director of the Parent or (if the Agent in the
exercise of its sole discretion so determines) Auditors
addressed to the Agent and the Lenders and in a form
acceptable to the Agent certifying (with supporting
calculations) the Parent's compliance (or otherwise) with
the financial covenants in Clause 21;
(e) promptly send such further information in its possession
regarding the financial condition and operation of the Group
as the Agent may reasonably request.
20.2 FINANCIAL STATEMENTS
The Parent undertakes to ensure that all financial statements
contemplated by Clause 20.1(a) and (b) shall be prepared in accordance
with GAAP, consistently applied, and that all financial statements
contemplated by Clause 20.1(a) are prepared in accordance with the
Companies Act 1985 and show a true and fair view of the state of
affairs of the relevant company and (in the case of the consolidated
accounts) of the Group as at the date of the same.
20.3 INVESTIGATION
The Parent hereby agrees that:
(a) following such period of discussion, if any, with the
finance director of the Parent as the Agent in its sole
discretion deems appropriate, it will if so required by the
Agent who believes in good faith that either:
(i) any financial statements or calculations provided
by the Parent are inaccurate or incomplete in any
material respect; or
(ii) the financial performance of the Group may give
rise (or has given rise) to a breach of one or
more of the financial covenants in Clause 21)
at the expense of the Parent (provided all such expenses are
estimated for the Parent in advance and properly incurred)
instruct the Auditors or other firm of accountants of
international repute selected by the Parent to discuss the
financial position of the Group with the Agent and to
disclose to the Agent (and provide that Agent with copies
of) such information as the Agent may reasonably request
regarding the financial condition and business of the Parent
and any of its Subsidiaries; and
(b) if, having taken the steps in 20.3(a) above, the Agent
acting in good faith continues to have concerns in relation
to the financial performance of the Group, the accuracy of
information provided by any member of the Group or
compliance with the financial covenants in Clause 21 or any
other legitimate concern relating to the affairs of the
Group, the Agent may instruct the Auditors or other firm of
accountants selected by the Agent to
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carry out an investigation at the Parent's expense (provided
all such expenses are estimated for the Parent in advance
and properly incurred) into the affairs of the Group and/or
the financial performance of the Group and/or the accounting
and other reporting procedures and standards of the Group
and the Parent will procure that full co-operation is given
to the Auditors or other firm of accountants so selected.
21 FINANCIAL COVENANTS
21.1 COVENANTS
The Parent undertakes to and covenants with the Agent as follows:
21.1.1 The Parent undertakes that, except as hereinafter provided during the
Security Period, the Ringfenced Group shall comply with the following
financial undertakings which will be calculated in accordance with the
provisions of this Clause 21 in each case by reference to the relative
financial statements.
21.1.2 Aggregated Minimum Net Worth of the Ringfenced Group shall not during
each period set out in Column A be less than the figure set out
opposite that period in Column B:-
COLUMN A COLUMN B
(PERIOD) L000
- --------------------------------------------------------------------------------
Drawdown Date to 31 May 2001 69,000
1 June 2001 to 31 July 2001 72,000
1 August 2001 to 31 October 2001 74,000
1 November 2001 to 31 December 2001 77,000
1 January 2002 to 31 March 2002 78,000
1 April 2002 to 30 June 2002 80,000
1 July 2002 to 30 September 2002 82,000
1 October 2002 to 31 December 2002 85,000
1 January 2003 to 30 April 2003 88,000
1 May 2003 to 31 July 2003 90,000
1 August 2003 to 31 October 2003 93,000
1 November 2003 to 31 December 2003 96,000
each quarterly period thereafter 100,000
21.1.3 The ratio of Ringfenced PBITDA to Ringfenced Total Interest during
each period set out in Column A below shall be not less than the ratio
set out in Column B opposite for that period:-
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COLUMN A COLUMN B
(PERIOD) (RATIO)
- --------------------------------------------------------------------------------
Drawdown date to 30 September 2001 3.1:1
Drawdown date to 31 December 2001 3.2:1
31 March 2001 to 31 March 2002 3.3:1
30 June 2001 to 30 June 2002 3.4:1
30 September 2001 to 30 September 2002 3.4:1
31 December 2001 to 31 December 2002 3.5:1
31 March 2002 to 31 March 2003 3.7:1
30 June 2002 to 30 June 2003 3.9:1
30 September 2002 to 30 September 2003 4.2:1
31 December 2002 to 31 December 2003 4.4:1
each twelve month period thereafter 5.0:1
beginning on 31 March, 30 June, 30
September, 31 December
21.1.4 The ratio of Cashflow to Debt Service during each period set out in
Column A below shall not be less than the ratio indicated in Column B
opposite for that period:-
COLUMN A COLUMN B
(PERIOD) (RATIO)
- --------------------------------------------------------------------------------
Drawdown Date to 31 December 2001 1:1
each twelve month period thereafter 1:1
beginning on 31 March, 30 June, 30
September and 31 December
21.1.5 The ratio of Senior Debt to Ringfenced PBITDA during each period set
out in Column A below shall be not more than the ratio set out in
Column B opposite for that period:-
COLUMN A COLUMN B
(PERIOD) (RATIO)
- --------------------------------------------------------------------------------
Drawdown date to 31 December 2001 5.1:1
31 March 2001 to 31 March 2002 3.75:1
30 June 2001 to 30 June 2002 3.5:1
30 September 2001 to 30 September 2002 3.5:1
31 December 2001 to 31 December 2002 3.25:1
31 March 2002 to 31 March 2003 3.2:1
30 June 2002 to 30 June 2003 2.9:1
30 September 2002 to 30 September 2003 2.75:1
31 December 2002 to 31 December 2003 2.5:1
each twelve month period thereafter 2.5:1
beginning on 31 March, 30 June, 30
September and 31 December
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21.1.6 The financial covenants set out above shall be tested as follows:
(a) the financial covenant in Clauses 21.1.2 shall be tested on
a monthly basis; and
(b) the financial covenants in Clauses 21.1.3, 21.1.5 and 21.1.4
shall be tested on a quarterly basis.
21.1.7 All financial covenants shall be tested by reference to the latest
audited financial statements of the members of the Ringfenced Group
or, if more recent, by reference to the latest aggregated Management
Accounts of the Ringfenced Group provided that where any financial
covenant is tested by reference to year end Management Accounts it
shall be tested again by reference to the audited financial statements
of the members of the Ringfenced Group for the relevant period when
those audited financial statements become available.
21.1.8 In the event that the Parent is in default or breach of any of the
financial covenants contained in this Clause 21.1, the Agent shall be
entitled to make such investigations and obtain such legal,
accountancy and/or valuation reports as it shall deem appropriate at
the cost of the Parent and the Borrower and each Group Company shall
provide all assistance required in connection with such investigations
and reports.
21.1.9 The calculation of the financial covenants detailed in Clause 21.1
shall be carried out by the Agent in accordance with the accounting
principles and policies applied in the most recent audited financial
statements and/or Management Accounts to which it is referring.
21.1.10 If the Parent changes the accounting policies applied, whether as a
result of a change in GAAP or otherwise, in a way that affects the
financial covenants detailed in this Clause 21.1 the Agent shall be
entitled to recalculate such covenants (following such period of
discussion, if any, with the finance director of the Parent as the
Agent in its sole discretion considers appropriate in the
circumstances) as if such changes had not taken place.
21.1.11 If there is any dispute as to any computation under Clause 21.1.7 or
Clause 21.1.8 or as to the interpretation of any of the relevant
definitions set out herein, the decision of the Agent (acting on the
instructions of the Lenders) shall, in the absence of manifest error
be conclusive and binding on each Borrower.
21.1.12 For the purposes of this Agreement and this Clause 21.1 in particular,
the following expressions shall have the following meanings (unless
the context otherwise requires):-
"AGGREGATED MINIMUM NET WORTH" means the aggregate of the amount
(including any share premium) for the time being paid up or credited
as paid up on the issued share capital of the Parent at the time of
calculation:
PLUS the amount standing to the credit (or, as the case may be,
MINUS the amount standing to the debit) of the aggregate
profit and loss account as reflected in the aggregated
balance sheet of the Ringfenced Group as at the end of the
latest accounting reference period for which aggregated
accounts of the Group have been (or are required to have
been) delivered to the Agent;
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PLUS any other aggregated reserves of the Ringfenced Group (but
excluding any positive revaluation reserve derived from any
writing up of book value of any assets of any member of the
Ringfenced Group above historic cost less accumulated
depreciations after Drawdown Date and any capital reserve
reflecting a pension fund surplus);
PLUS the amount of any goodwill written off (to the extent
written off against capital and revenue reserves of the
Ringfenced Group) or amortised;
PLUS an amount equal to the principal amount of the Loan Stock
together with any amounts of interest thereon which are
rolled up under the terms of the Loan Stock Instrument or by
resolution of the holders thereof (in each case so that such
interest is not payable until the end of the period to which
they relate) and any amounts of such interest which are
capitalised and issued as additional Loan Stock under the
Loan Stock Instrument;
PLUS an amount equal to the amount of all transaction costs in
relation to the Merger and its financing only to the extent
written off directly to reserves;
MINUS any amount which is attributable to:
(a) titles, trademarks, copyrights, patents,
capitalised research and development expenditure,
capitalised redundancy and closure costs and other
intangible assets; and
(b) deferred taxation (save to the extent that this
would result in the relevant deferred taxation
being effectively deducted more than once in any
determination of Aggregated Minimum Net Worth);
MINUS from profit before tax for the period a notional tax charge
at such rate as may be payable by the Parent from time to
time;
MINUS from profit after tax for the period Distributions paid or
payable in respect of that period;
MINUS any reserves or capital of the Group created by any surplus
on the sale of any investment or other asset (excluding
trading stock) of the Group;
MINUS (to the extent otherwise included) the amount attributable
to the interests (if any) of the outside holders of issued
share capital in any member of the Group other than the
Parent;
For the purposes of the foregoing, all items shall be calculated on an
aggregated basis and in accordance with applicable accounting
principles and, where the calculation is being made at the end of any
accounting reference period for which an aggregated balance sheet of
the Group has been or is required to be delivered to the Agent, shall
be as shown in that balance sheet;
"CASHFLOW" means in relation to any period, Ringfenced PBITDA for that
period adjusted as follows:-
(a) adding back any other non-cash charges and deducting any
other non-cash income, as the case may be, to the extent
already taken into account in Ringfenced PBITDA;
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(b) deducting any profit, or adding any loss, as the case may
be, from the disposal of fixed assets, to the extent already
taken into account in Ringfenced PBITDA;
(c) adding any increase or deducting any decrease as the case
may be, in Current Liabilities;
(d) adding any decrease or deducting any increase, as the case
may be in Current Assets;
(e) adding the proceedings of the disposal of any fixed assets;
(f) adding the proceeds of any issue of shares in the Parent;
(g) adding any payments received in respect of Tax rebates;
(h) deducting Corporation Tax paid;
(i) deducting all amounts paid in respect of Capital Expenditure
excluding that funded under Finance Leases or under the
Capital Expenditure Facility;
(j) deducting any expenditure on the acquisition of share
capital in any third party;
(k) deducting all amounts paid in respect of any loans made by
any Group Company to any third party;
(l) deducting any exceptional or extraordinary expenditure and
adding any exceptional or extraordinary receipts;
(m) adding the proceeds of any subscription for shares or
additional Loan Stock (or other subordinated loan capital,
in the capital of, or issued by the Parent) to the extent
such proceeds are received in cash by the Parent in the
relevant period;
(n) adding any transaction costs in relation to the Merger and
its financing to the extent deducted from Ringfenced PBITDA,
but without double counting in any case;
"CURRENT ASSETS" means, in relation to each Ringfenced Group Member at
any time, the aggregate value of its assets which are treated as
current assets in accordance with GAAP;
"CURRENT LIABILITIES" means, in relation to each Ringfenced Group
Member at any time, the aggregate value of its liabilities which are
treated as current liabilities in accordance with GAAP;
"DEBT SERVICE" means, in relation to any relevant period, the
aggregate of the following items:
(a) Aggregated Total Interest paid (including interest actually
paid on Loan Stock (other than issuance of additional Loan
Stock) but excluding any interest rolled up under the terms
of the Loan Stock or (unless the direct or
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indirect effect of such exclusion would be that it would no
longer be prohibited from being paid (in which case it shall
be included)) by the Intercreditor Agreement);
(b) Distributions declared or paid during that period;
(c) repaying of Borrowings made or due within that period (but
excluding any prepayments pursuant to Clause 8.7);
(d) the amount paid in respect of redemption of any shares or
Loan Stock by the Parent during that period; and
(e) capital payments under Finance Leases;
"RINGFENCED PBITDA" means for any period, the aggregated profit of the
Ringfenced Group before extraordinary and exceptional items (as
defined by Statement of Standard Accounting Practice No 6 and
Financial Report Standard No 3, both as amended or updated from time
to time), Taxation and interest accrued during such period as an
obligation of or owed to any member or members of the Ringfenced
Group, whether or not paid, deferred or capitalised during such period
and excluding, any gain on the revaluation of any assets (other than
sale or other disposal of trading stock and work in progress) of the
Ringfenced Group for such period, calculated on a consolidated basis
and (subject only as may be required in order to reflect the express
inclusion or exclusion of items as specified in this definition) in
accordance with the applicable accounting principles and determined
from the aggregated financial statements of the Ringfenced Group for
such period adjusted as follows:-
(a) before depreciation of fixed assets (excluding any
additional depreciation arising from the write-up of the
book value of assets);
(b) before any charge for the amortisation of goodwill or any
other intangible assets; and
(c) excluding provisions (other than provisions for stock and
trade debtors) made before the Drawdown Date which have been
subsequently written back;
(d) before taking into account earnings or losses attributable
to Affiliates (other than to the extent earnings are
received in cash by a member of a Group);
(e) adding back an amount equal to the amount of all transaction
costs in relation to the Merger and its financing to the
extent deducted from such profits;
"RINGFENCED TOTAL INTEREST" for any relevant period means the
aggregate (calculated on an aggregated basis) of all interest, amounts
in the nature of interest, commitment commission, guarantee fees and
the interest element of Finance Leases incurred, paid or accrued in
respect of Borrowings during such period as an obligation of any
Ringfenced Group Member, other than, unless otherwise expressly
stated:
(a) the Loan Stock; and
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(b) arrangement fees charged during such period;
"SENIOR DEBT" means, in respect of the last day of each period set out
in Column A in Clause 21.1.5, Series 1 Term Facility Loans, Series 2
Term Facility Loans, Capital Expenditure Facility Loans and
Utilisations of the Working Capital Facility outstanding on such date.
21.2 EXCHANGE RATE ADJUSTMENT
The Lenders acknowledge that the terms of this Clause 21 have been
agreed on the basis of the exchange rates set out in the Business Plan
and that in the event that the Parent is able to demonstrate to the
satisfaction of the Finance Parties (acting reasonably) that any
breach of Clause 21.1 has arisen solely as a result of a movement in
any exchange rates after the date of this Agreement, the Finance
Parties will instruct the Agent to negotiate in good faith with the
Parent to agree replacement financial covenants which provide the
Finance Parties with equivalent protection to that offered by the
financial covenants set out in Clause 21 as at the date of this
Agreement.
22 GENERAL UNDERTAKINGS
The undertakings in this Clause 22 remain in force from the Drawdown
Date for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
22.1 POSITIVE UNDERTAKINGS
22.1.1 USE OF FACILITIES
The Parent shall use and shall procure that the other Borrowers shall
use the Facilities only for the relevant Specified Purposes.
22.1.2 NOTIFICATION OF DEFAULTS ETC
The Parent undertakes to notify the Lender of:
(a) any Default or Event of Default immediately upon becoming
aware of its occurrence;
(b) any litigation, arbitration or administrative proceedings or
claims in which any Material Company is concerned or to
which it is a party involving a sum in excess of L100,000
immediately upon becoming aware that it is so concerned or
on becoming a party;
(c) any Security (other than a Permitted Security Interest)
attaching to any of the assets of any Material Company; and
(d) any company becoming or ceasing to be a Material Company.
22.1.3 The Parent undertakes to the Agent and the other Finance Parties that
it shall, and it shall procure that each Material Company shall, save
with the prior written consent of the Agent during the Security
Period:-
(a) INSURANCES: effect and maintain such insurance over its
assets and business in such manner and to such extent as is
reasonable and customary
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for a business engaged in the same or a similar activity and
the same or similar localities to it (subject always to the
terms of any Security Document) and shall maintain such
policies of insurance in full force and effect and comply
with all its obligations relating thereto;
(b) BANKING: maintain and continue to maintain its current
accounts, exchange, interest hedging and electronic and
transmission banking business with the Working Capital Bank
or (in the case of Material Companies incorporated in the
United States of America only) the Approved Financier;
(c) PAYMENTS RECEIVED: ensure that all moneys which it may
receive in respect of its book debts and other debts are
paid into its account with the Working Capital Bank and that
all of its transmission banking business is carried out by
the Working Capital Bank or the Approved Financier;
(d) TAX: pay and discharge all Taxes and governmental charges
payable by or assessed upon it prior to the date on which
the same become overdue or before any material penalty is
incurred, unless and to the extent that such Taxes shall be
contested in good faith by appropriate proceedings, pending
determination of which payment may be lawfully withheld, and
there shall be set aside adequate reserves with respect to
such Taxes or charges so contested in accordance with GAAP;
(e) SECURITY: procure that subject to compliance with applicable
laws, each Material Company not being a member of the
Clinical Group shall grant Full Group Security and in such
form as the Security Trustee for the Agents and the Lenders,
the Working Capital Banks and the Working Capital Bank may
reasonably specify and shall take all such steps, sign all
such documents in relation to such security and give all
such assurances as may be necessary to protect such security
and ensure compliance with its obligations thereunder
(provided that nothing in this Clause 22.1.3(e) shall
require any Material Company to grant any Security any
earlier than is expressly contemplated by other provisions
of this Agreement);
(f) LICENCES: at all times have and keep in force all licences,
consents, permits and authorisations required:
(i) for the conduct of its business, trade and
ordinary activities generally where failure to
comply or failure to obtain and maintain, as the
case may be, is reasonably likely to have a
Material Adverse Effect; and
(ii) to enable it to perform its obligations under the
Finance Documents; and
(iii) will upon request provide to the Agent a copy of
such licences, consents, permits and
authorisations, and will operate its business in
accordance with all applicable rules, regulations
and codes of good practice;
(g) INTRA GROUP TRANSACTIONS: ensure all transactions between it
and other members of the Group, whether or not otherwise
permitted hereunder, shall be on arm's length commercial
terms;
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(h) ENVIRONMENTAL COMPLIANCE: do all things necessary lawfully to
comply with and to ensure compliance by all of its and their
officers, employees and other persons with all Environmental
Laws and Environmental Licences and promptly on:
(i) receipt of any communication alleging a breach of
Environmental Laws and/or Environmental Licences; and/or
(ii) becoming aware of any such breach or any claim relating to
Environmental Laws and/or Environmental Licences or to any
such breach;
notify the Agent of that event and of the steps it is taking (and
hereby agrees to take) to prevent, remove or mitigate that event;
(i) ENVIRONMENTAL INDEMNITY: indemnify the Finance Parties, any
receiver appointed by the Security Trustee and their respective
officers, employees and agents against all costs and reasonable
expenses suffered or incurred by them (save in the case of such
party's own gross negligence or wilful default) which arise as a
result of :
(i) any actual or threatened breach of Environmental Law by
it;
(ii) any actual or threatened release or exposure to a
Dangerous Substance on, at or from the premises or
operations of any member of the Group; or
(iii) any actual or threatened claim referred to in (h) above;
(j) ENVIRONMENTAL PROTECTION ACT: where environmental harm in terms
of the Environmental Protection Act 1990 (as amended by the
Environment Act 1995) has been caused to any property belonging
to any member of the Group over which the Security Agent has or
will have a security interest pursuant to a Security Document,
ensure that none of the Group is the "appropriate person" in
terms of that Act who has caused or knowingly permitted that
harm to occur and be aware both of the identity of the
appropriate person and of that person's current financial
condition;
(k) MAINTAIN INTELLECTUAL PROPERTY: preserve its Intellectual
Property Rights and observe all covenants and stipulations
affecting them where any failure to do so could have a Material
Adverse Effect;
(l) KEYMAN INSURANCE: ensure that as soon as reasonably practicable
and in any event by the date falling three months after Closing
each Keyman Insurance is effective; and that thereafter each
Keyman Insurance is maintained and nothing is done or omitted
which would result in any such policy lapsing or not being
renewed;
(m) DORMANT COMPANIES: procure that none of the companies listed in
Part 2 of Schedule 16 ceases to be a Dormant Company, other than
as a result of a liquidation of any such company which would not
be an Event of Default, and do not acquire any assets which would
make them a Material Company and do not assume any liabilities;
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(n) ACCESS: on receipt of reasonable notice from the Agent permit the
Agent and any person authorised by the Agent to have at all
reasonable times during normal business hours access to its
premises and account books and records to make extracts from and
take copies of its accounting records and to discuss any matter
with its management;
(o) MERGER DOCUMENTS: take all reasonable and practical steps to
preserve and enforce its rights under any Merger Document unless
it is agreed between the Parent and the Agent that it is not
commercially prudent to do so;
(p) RE-DENOMINATION HEDGING: use all reasonable endeavours to enter
into, within 7 Business Days of today's date, such arrangements
designed to hedge against exchange rate exposure on
re-denomination of Parent Series 1 Acquisition Term Facility,
Canada Holdco Series 1 Acquisition Term Facility, Parent Series 2
Acquisition Term Facility and Canada Holdco Series 2 Acquisition
Term Facility as the Agent may reasonably request, and in any
event enter into such arrangements within 14 Business Days of
today's date;
(q) HEDGING: within one month of Closing enter into such arrangements
as the Agent may reasonably require in order to hedge against the
Group's exposure to fluctuation of interest rates (in respect of
not less than 66% of the aggregate maximum principal amount of
the Series 1 Term Facilities, the Series 2 Term Facilities and
the Capital Expenditure Facility) and thereafter from time to
time enter into such other or amended arrangements as the Agent
may reasonably require for the same purposes;
(r) COMPLIANCE WITH LAWS: comply in all respects with all laws to
which it may be subject, if failure to do so would have a
Material Adverse Effect;
(s) INFORMATION: Promptly inform the Agent of any matter which may
constitute a breach of any of the representations, warranties or
conditions contained in the Merger Agreement and the exercise of
any statutory appraisal rights with regard to the Tender Offer;
(t) ERISA:
(i) comply with all applicable provisions of ERISA and the
regulations and published interpretations thereunder with
respect to all Employee Benefit Plans;
(ii) not take any action or fail to take action the result of
which could be a liability to the PBGC or to a
Multiemployer Plan;
(iii) not participate in any prohibited transaction that could
result in any civil penalty under ERISA or tax under the
Code;
(iv) operate each Employee Benefit Plan in such a manner that
will not incur any tax liability under Section 4980B of
the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code; and
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(v) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information
about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.
22.1.4 The Parent undertakes to the Agent and the other Finance Parties that it
shall procure the prompt (and in any event within seven Business Days of
execution of the Merger Agreement) launch of the Tender Offer; the
prompt commencement of the long form or short form (as appropriate)
merger of US Newco and Target Company; and that all steps (including
voting any Tender Offer Stock) will be taken with a view to obtaining
stockholder approval of the Merger as soon as is reasonably practicable
in all the circumstances.
22.1.5 The Parent shall use all reasonable endeavours to procure that on the
day on which any Loan is made for the purpose specified in Clause
3.1.2(b) the Agent shall have received the duly executed Second Stage
Security; declaring that if the Parent has not delivered duly executed
Second Stage Security pursuant to this Clause 22.1.5 by that date
falling 90 days after Closing the Margin in respect of each Facility
shall upon that date increase by seventy five basis points per annum
(0.75%).
22.1.6 The Parent undertakes to the Agent and the other Finance Parties that it
shall procure the completion of the Intra Group Transfer within 90 days
of Closing.
22.1.7 The Parent undertakes to the Security Trustee and the other Finance
Parties that it shall procure the execution and delivery to the Security
Trustee as soon as reasonably practicable after completion of the Intra
Group Transfer of the Third Stage Security.
22.1.8 The Parent undertakes to procure that within 90 days of Closing all
required exemptions will be obtained from the Quebec Securities
Commission in relation to the securities issued pursuant to Target's
employee stock option plan to employees of Target or any Subsidiary
resident in the province of Quebec (but for the avoidance of doubt
excluding any additional exemptions as to re-sale of such securities
other than following statutory hold periods and the like).
22.1.9 The Parent undertakes to procure the refinancing of the Target Group US
Lender Indebtedness and the delivery to the Agent of:
(a) evidence that all Securities, guarantees and indemnities granted
by any Target Group Company (subject to any Permitted Security
Interests) have been discharged and that no Group Companies have
granted any Securities, guarantees or indemnities other than
Permitted Security Interests;
(b) US Pay-off Letter (in re Target Group US Lender Indebtedness);
and
(c) UCC - 3 termination statements (in re Target Group US Lender
Indebtedness),
within 2 Business Days of the initial Utilisation of the Facilities.
22.1.10 The Parent undertakes to use all reasonable endeavours to procure
release of the Letter of Credit issued by The Royal Bank of Canada in
connection with the current
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litigation between Clintrials BioResearches Limited and Technilab Inc
(whether by use of a Utilisation under the Working Capital Facility or
otherwise).
22.2 NEGATIVE UNDERTAKINGS
22.2.1 The Parent undertakes it shall not, and it shall procure that, save with
the prior written consent of the Agent, none of the Material Companies
will:-
(a) NEGATIVE PLEDGE: create or permit to subsist (with the exception
of any Permitted Security) any Security on the whole or any part
of its present or future assets, property or revenue;
(b) FINANCIAL INDEBTEDNESS: incur or permit to subsist any Financial
Indebtedness other than Permitted Financial Indebtedness;
(c) LOANS: make any loans or grant any credit to or for the benefit
of any person other than:
(i) amounts of credit allowed by the relevant Material Company
in the normal course of its trading activities; or
(ii) loans made by one Obligor to another Obligor; or
(iii) loans made by a Group Company which is not an Obligor to
another such Group Company; or
(iv) loans made by a Group Company to its employees where such
loans do not, when aggregated with all such loans made by
all Group Companies, exceed L100,000 at any time; or
(v) any loan which constitutes Permitted Financial
Indebtedness; or
(vi) any loan falling within the terms of Clause 22.3.5;
(vii) loans not included in paragraphs (i) to (vi) above which
when aggregated with all such loans do not exceed
L100,000;
(d) CAPITAL EXPENDITURE: incur any Capital Expenditure in any
Financial Year of the Parent in excess of that provided for in
the Business Plan for that Financial Year or in excess of that
provided for in the Operating Budget agreed pursuant to Clause
20.1(c) provided that nothing in this Clause 22.1.2(d) shall
prevent any amount of Capital Expenditure contemplated in a
previous year's Operating Budget which was not in fact incurred
in that year being permissable Capital Expenditure in the
succeeding year;
(e) CHANGE OF BUSINESS: make or threaten to make any material change
in the nature or scope of its business as presently conducted
except as specified in the Business Plan;
(f) DISPOSALS: (whether by a single transaction or a member of
related or unrelated transactions and whether at the same time or
over a period of time) sell, transfer, lease or otherwise dispose
of or cease to exercise direct control over all or any part of
its undertaking, assets or revenues or any interest thereon or
the right to receive or be paid the same or agree or
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attempt to do so, save that this restriction shall not apply to
any Permitted Disposal;
(g) ACQUISITIONS: acquire or make any investment in any companies
(other than in relation to the purchase of the Target Stock),
joint ventures or partnerships or acquire any businesses (or
interests therein) provided that any Group Company may:
(i) make two acquisitions of all (but not less than all) of
any company or business:
1) whose business is clinical trial operations;
2) which showed profits on its ordinary activities at
the date of its most recent audited financial
statements or its most recent financial statements
provided in the latter case that the Parent obtains
confirmation of the accuracy of such financial
statements from an internationally recognised firm
of accountants in their due diligence report
relating to the relevant acquisition;
3) for which the total price paid if an acqusition by
a Ringfenced Group Member, when aggregated with any
previous acquisition by any Ringfenced Group
Member, does not exceed US$2,000,000 and if an
acquisition by a Clinical Group Member, when
aggregated with any previous acquisition by any
Clinical Group Member, does not exceed
USL5,000,000;
(ii) invest in any new joint venture or partnership provided
that the total investments pursuant to this Clause
22.2.1(g)(ii) during any financial year do not exceed a
maximum aggregate amount of L250,000 and the total
investments pursuant to this Clause 22.2.1(g)(ii) during
the Finance Period do not exceed a maximum aggregate
amount of L1,000,000; and
(all of the above figures being inclusive of the costs and
expenses incurred in making such acquisitions or investments)
provided that no new Subsidiary may be acquired or incorporated
for the purposes of improving the tax structure of the Group if
such acquisition or incorporation would impair the security
position of the Finance Parties and provided further that in the
event that any Group Company purchases shares in a company which
thereby becomes a Subsidiary, it shall procure that such
Subsidiary promptly on being required (subject to the compliance
with applicable laws) gives Full Group Security to the Security
Trustee;
(h) CONSTITUTIONAL DOCUMENTS: amend or consent to the amendment of
any provision of its memorandum or articles of association or
equivalent constitutional documents in any way which is adverse
to the interests of any Finance Party under the Finance
Documents;
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(i) MERGER: merge or consolidate with any other person other than an
Obligor or pursuant to the Merger (unless pursuant to a
reconstruction or amalgamation previously approved in writing by
the Agent);
(j) SHARE ISSUES ETC: other than pursuant to a rights issue or in
accordance with the Equity Documents issue any shares or
otherwise amend its authorised or issued share capital or convene
any meeting of any member of the Group for any such purpose;
(k) REDEMPTIONS: redeem, purchase or otherwise acquire for
consideration any shares or warrants issued by it or set apart
any sum for any such purpose or otherwise reduce its capital;
(l) FEES: other than as required or permitted under the Transaction
Documents, pay any fees or commissions to any persons other than
any fees payable by an Obligor on arm's length terms to third
parties who have rendered service or advice to that Obligor
required by that Obligor in the ordinary course of its business;
(m) DEALINGS WITH AFFILIATES: enter into:
(i) any arrangement or contract with any of its Affiliates
unless such arrangement or contract is entered into on an
arm's length basis and is fair and equitable to such
member of the Group; or
(ii) any other transaction, arrangement or contract with any of
its Affiliates which would not be entered into by a
prudent person in the position of the member of the Group
concerned or which is on terms which are less favourable
to that member of the Group than those obtainable from any
person who is not one of such members' Affiliates;
(n) ACCOUNTING POLICIES: it will not adopt any accounting policy or
change the consistency of application of its accounting
principles from the Appropriate Accounting Principles unless:
(i) the revised policy and practice adopted from time to
time is in accordance with GAAP; and
(ii) provided that prior to any revised policy and practice
being adopted the Parent will notify the Agent thereof
and, if required by the Agent, will negotiate in good
faith with the Agent in order that the financial covenants
set out in Clause 21 may be amended as required by the
Agent in order for the Finance Parties to be able to make
the same judgements as to the financial performance of the
Group as they are able to under the present accounting
policy provided that if such negotiations are not
concluded to the satisfaction of the Agent within a period
of 30 days from the commencement of such negotiations the
Parent agrees that it will provide either financial
statements on the same basis as before or provide
financial statements containing a statement reconciling
the previous and the then current accounting policy in
order that the Finance Parties may
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determine the financial condition of the Group having
regard to the terms of this Agreement;
(o) ACCOUNTING REFERENCE DATE: change its accounting reference date
(or permit any of its Subsidiaries to do so) from 31 December or
change its Auditors except to another firm of international
repute and provided that such new Auditors have satisfied the
Agent that they would be able to and would provide the
information and documentation required of the Auditors under this
Agreement;
(p) TAX RESIDENCE: change its place of residence for tax purposes;
(q) SHAREHOLDER PAYMENTS: save to the extent permitted by the
Interecreditor Deed, declare or pay, directly or indirectly, any
Shareholder Payment other than in favour of an other Obligor
which is a wholly owned Subsidiary of the Parent;
(r) BANK ACCOUNTS: open or maintain any account for banking purposes
other than with the Working Capital Bank or any account with the
Approved Financier;
(s) AMENDMENTS TO DOCUMENTS: amend or waive any provisions of the
Merger Documents or the Equity Documents which have, or would be
likely to have, an adverse effect on the interests of any Finance
Party under the Finance Documents;
(t) OFF BALANCE SHEET FINANCE: enter into any off balance sheet
financing;
(u) HEDGING: enter into any arrangements for the hedging of its
exposure to floating interest rates other than in terms of the
Hedging Agreements;
(v) PAYMENT OF INDEBTEDNESS: repay, prepay or otherwise satisfy any
indebtedness owed by it to any member of the Group other than an
Obligor;
22.3 RINGFENCED UNDERTAKINGS
The Parent undertakes to procure that (without prejudice to the terms of
Clause 22.1.3(g)) save with the prior written consent of the Agent;
22.3.1 no asset title to which is held by a Ringfenced Group Member shall be
sold or transferred to a Clinical Group Member other than for full value
payable immediately and otherwise on arm's length commercial terms;
22.3.2 no liability of any Clinical Group Member shall pass or be transferred
(howsoever) to any Ringfenced Group Member;
22.3.3 no Clinical Group Member (or any part of its business or undertaking)
will be merged or integrated with any Ringfenced Group Member (or any
part of its business or undertaking);
22.3.4 no Ringfenced Group Member will guarantee, assume (voluntarily or
involuntarily) or grant any Security in respect of any liability (actual
or contingent) of any Clinical Group Member;
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22.3.5 no cash shall be transferred from or by any Ringfenced Group Member to
any Clinical Group Member save for the amount of cash held in the
Ringfenced Group at Drawdown Date up to a maximum amount of
US$12,000,000;
22.3.6 no Clinical Group Member shall incur any Financial Indebtedness to any
Ringfenced Group Member.
22.4 MERGER - RELATED UNDERTAKINGS
22.4.1 The Parent undertakes that it shall not and it shall procure that, save
with the prior written consent of the Agent, US Newco will not:
(a) AMENDMENTS: amend or seek to amend any of the terms or conditions
of the Tender Offer or the Merger Agreement (other than for the
purposes of corrections of typographical or other immaterial
errors) provided that the Parent shall retain the right to amend,
without the consent of the Agent, the terms and conditions of the
Tender Offer and the Merger Agreement as required by the US
Securities and Exchange Commission or any governmental or
regulatory authority or to comply with any applicable laws;
(b) WAIVERS: waive or seek to waive any conditions of the Tender
Offer set out in Annex A to the Merger Agreement or the Merger
Agreement;
(c) TERMINATE: terminate or seek to terminate the Merger Agreement
after the Drawdown Date.
22.4.2 The Parent undertakes that:
(a) ANNOUNCEMENTS: all publicity material, press releases and
announcements intended to be published in relation to the Tender
Offer and/or Merger shall as soon as practicable prior to
publication be furnished to the Agent, and where such material
refers to the Agent or any party hereto other than a Group
Company shall require to be approved by such party prior to such
publication (such approval not to be unreasonably withheld or
delayed);
(b) PROGRESS OF OFFER: the Parent will provide the Agent with all
information in respect of progress of the Tender Offer and Merger
which is material to the interests of the Finance Parties and
will provide the Agent with any information and copies of
professional advice received as the Agent may reasonably request;
(c) DISCLOSURE: the Parent will make full disclosure to the Agent in
writing as soon as practicable of all information which comes to
the attention of the Parent and which is material to the decision
whether to waive any condition of the Tender Offer or which
suggests that any condition of the Tender Offer will or may not
be satisfied, or will or may require to be waived;
(d) PRICE: it will not do anything that will result in the US
Securities and Exchange Commission requiring an increase in the
Common Stock Price.
23 EVENTS OF DEFAULT
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Each of the events or circumstances set out in Clause 23 is an Event of
Default, save that no event or circumstance relative to the Target Group
which would otherwise constitute an Event of Default will do so prior to
the Clean Up Date (provided that steps which are designed to remedy the
relevant event or circumstance and which are satisfactory to the Agent
(acting reasonably) are being taken) unless the relevant event or
circumstance in the reasonable opinion of the Lenders could have a
Material Adverse Effect.
23.1 NON-PAYMENT
An Obligor fails to pay any amount of principal or interest payable by
it under a Finance Document at the place and in the currency and funds
in which it is expected to be payable on demand, if so payable, or on
its due date or if such non-payment is caused by any technical
malfunction in the banking system (as the same may be determined by the
Agent or Lenders) within 3 Business Days after such demand or due date
or fails to pay any other such amount within 3 Business Days of its due
date; or
23.2 CERTAIN OBLIGATIONS
If an Obligor fails to comply with any of the provisions of Clauses 21,
22.1.3(p), 22.2.1(a), (b), (c), (d), (k), (q), (s), (u), 22.3, or 22.4
of this agreement; or
23.3 OTHER OBLIGATIONS
An Obligor fails to comply with any of the covenants or undertakings
under any Finance Document (other than the obligations referred to in
Clauses 23.1 and 23.2) and, if that breach is capable of remedy it is
not remedied within ten Business Days after notice of that breach has
been given by the Agent to the Parent; or
23.4 MISREPRESENTATION
Any representation or warranty or statement by any Obligor in any
Finance Document or in any notice or other document, certificate or
statement delivered pursuant thereto or in connection therewith or
repeated at any time in accordance with the terms thereof is or proves
to have been incorrect in any material respect when made or when deemed
to be repeated; or
23.5 CROSS DEFAULT
Any Material Company defaults in the performance of any other agreement
in respect of or relating to Financial Indebtedness in excess of, in
aggregate L100,000, so as to accelerate or render capable of
acceleration the due date of payment or repayment thereunder or any such
Financial Indebtedness is not repaid or paid in full on the due date or
repayment of any such Financial Indebtedness is due on demand and is not
paid in full forthwith on such demand being made or any undrawn
facilities are withdrawn by any creditor by reason of default or
financial difficulties on the part of such Material Company; or
23.6 INABILITY TO PAY DEBTS
Any Material Company is unable or admits its inability to pay its debts
or otherwise suspends making payments to all or any class of its
respective creditors or announces an intention to do so or begins
negotiations with any creditor with a view
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to the general readjustment or rescheduling of all or any class of its
Financial Indebtedness or proposes or enters into any composition or
other arrangement for the benefits of its creditors generally or any
class of creditors; or
23.7 LEGAL PROCESS
Any distress, execution, arrestment, attachment, inhibition or other
diligence or legal process affects any asset of any Material Company in
respect of a liability in excess of L100,000 (or its equivalent), other
than any such distress, execution, arrestment, attachment, inhibition or
other diligence or legal process which is contested in good faith and is
fully discharged within 14 Business Days; or
23.8 INSOLVENCY PROCEEDINGS
Any person takes any action or any legal proceedings are started or
other steps taken (including the presentation of a petition) for:
(a) any Material Company to be adjudicated or found insolvent;
(b) the winding up or dissolution of any Material Company other than:
(i) for the purpose of a solvent reconstruction or
amalgamation the terms of which have previously been
approved by the Agent in writing; or
(ii) a winding up petition which is proved to the satisfaction
of the Agent acting reasonably to be frivolous or
vexatious and which is discharged within 21 days of its
presentation and before it is advertised; or
(c) the appointment of a trustee, receiver, administrative receiver
or similar office in respect of any Material Company or any of
its assets; or
23.9 INSOLVENCY ORDER
Any adjudicative, order or appointment is made under or in relation to
any of the proceedings referred to in Clause 23.8; or
23.10 ADMINISTRATION
An application is made to the court for an administration order under
the Insolvency Act 1986 against any member of the Group; or
23.11 REPOSSESSION OF GOODS
Any other creditor(s) repossess any goods in the possession of any
member of the Group under any hire purchase, conditional sale, leasing,
retention of title or similar agreement and such steps have a Material
Adverse Effect on the business assets or financial condition of any
Material Company; or
23.12 ANALOGOUS PROCEEDINGS
Any condition, event or action is taken, occurs or exists under the laws
of any other country or political subdivision thereof, to the
jurisdiction of which any member of the Group or its respective assets
or revenues is subject, which has a substantially
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equivalent effect to any of the conditions, events or acts mentioned in
Clause 23.6 to 23.11 (inclusive); or
23.13 CHANGE OF CONTROL
After the date of this Agreement, control (as defined in Clause 8.2.2)
of the Parent passes without the consent of the Agent to any person, or
persons acting either individually or in concert (other than the
shareholders of the Parent as at the date of this Agreement)
(disregarding for the purposes of this Clause 23.13 any sale by the
Investors of up to 50% of the issued share capital of Parent in the
context of any syndication by it); or
23.14 MANAGEMENT TEAM
Save with the consent of the Finance Parties, any of the Management Team
or a person who has replaced him under the provisions of this Clause
23.14 ceases to be an employee (which shall be deemed to be the case if
he dies or becomes permanently incapacitated or is unable to perform his
executive functions for any other reason other than holiday or sickness
not exceeding 60 days in any period of 120 days) and a replacement
reasonably acceptable to the Finance Parties has not commenced
employment with the Parent within 180 days of the date on which the
relevant cessation occurred (which in the event of a deemed cessation
through holiday or sickness shall occur on the 61st day); or
23.15 LITIGATION
Any Material Company becomes subject to any litigation, arbitration or
administrative, proceeding which in the reasonable opinion of the Agent
is likely to be adversely determined and, if adversely determined, would
have a Material Adverse Effect; or
23.16 SUBSIDIARIES
Any Obligor (other than the Parent) ceases to be a wholly owned
Subsidiary of the Parent on or after the first drawdown date save as
permitted by this Agreement or with the prior written consent of the
Agent;
23.17 INVALIDITY
Any provision of this Agreement or the Security Documents which the
Agent (acting reasonably) considers material is, or becomes for any
reason, invalid or unenforceable; or
23.18 CHANGE IN NATURE OF BUSINESS
Any Obligor changes the nature of its business, suspends, ceases or
threatens to suspend or cease to carry on all or a substantial part of
the present business and operations which it now conducts directly or
indirectly, or any governmental authority expropriates or threatens to
expropriate or nationalise all or a significant part of its assets and
the result of any of the foregoing will, in the opinion of the Finance
Parties have a Material Adverse Effect; or
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23.19 LICENCES
Any authorisation, approval, consent, licence, exemption, filing,
registration or notarisation or other requirement necessary to enable
any Obligor to perform its material obligations under any Finance
Document to which it is a party is modified, revoked or withheld or does
not remain in full force and effect and the same has a Material Adverse
Effect; or
23.20 QUALIFIED ACCOUNTS
The Parent's Auditors qualify their report to any audited financial
statements of the Group in any way which is (in the opinion of the
Agent) material in the context of the Facilities; or
23.21 INTER CREDITOR DEED
Any party to the Inter Creditor Agreement (other than any Finance Party)
fail to comply with its obligations under the Inter Creditor Agreement
or the Inter Creditor Agreement ceases to be binding upon any such party
for whatever reason and, as a result the position of the Finance Parties
under the Finance Documents is materially prejudiced;
23.22 ERISA TERMINATION EVENT
The occurrence of any of the following events if it has or in the
reasonable opinion of the Agent is likely to have a Material Adverse
Effect:
23.22.1 any Borrower, any Group Company or any ERISA Affiliate fails to make
full payment when due of all amounts which, under the provisions of any
Pension Plan or Section 412 of the Code, such Borrower, Subsidiary or
ERISA Affiliate is required to pay as contributions thereto;
23.22.2 an accumulated funding deficiency in excess of $100,000 occurs or
exists, whether or not waived, with respect to any Pension Plan;
23.22.3 a Termination Event; or
23.22.4 any Borrower, any Group Company or any ERISA Affiliate as employers
under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such
employer has incurred a withdrawal liability requiring payments in an
amount exceeding $100,000.
23.23 MATERIAL ADVERSE EFFECT
Any adverse change in the business, prospects of financial condition of
an Obligor occurs which, in the reasonable opinion of the Lenders could
have a Material Adverse Effect.
23.24 ACCELERATION
On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority
Lenders, by notice to the Parent:
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(a) cancel the Total Commitments whereupon they shall immediately be
cancelled;
(b) declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued under the Finance
Documents be immediately due and payable, whereupon they shall
become immediately due and payable;
(c) declare that all or part of the Loans be payable on demand,
whereupon they shall immediately become payable on demand by the
Agent on the instructions of the Majority Lenders; and/or
(d) declare that all or part of the Working Capital Facility (insofar
as not already payable on demand) be repayable on demand
whereupon it shall become immediately due and payable.
23.25 LIMITATION DURING AVAILABILITY PERIOD
Prior to the end of the Availability Period, and subject to compliance
by the relevant Group Companies with Clauses 3.3 and 3.4 unless a
Primary Default has occurred (in the period prior to the Drawdown Date)
no Finance Party shall:
(a) be entitled to exercise any right of rescission or other remedy
(whether under the Finance Documents or the general law) or
exercise any remedy under Clause 23.24; or
(b) refuse to make available any Parent Series 1 Acquisition Term
Facility Loan, Parent Series 2 Acquisition Term Facility Loan,
Canada Holdco Series 1 Acquisition Term Facility Loan or Canada
Holdco Series 2 Acquisition Term Facility Loan.
24 CHANGES TO THE LENDERS
24.1 ASSIGNMENT AND TRANSFERS BY THE LENDERS
A Lender, or any successor or assignee of such Lender, (in this capacity
the "EXISTING LENDER") may at any time assign, novate or otherwise
transfer all or any part of its rights or obligations under the Finance
Documents (or any of them) to any Qualifying Lender (a "NEW LENDER").
24.2 OBLIGATIONS
A transfer of obligations will only be effective if made in accordance
with Clause 24.6 or if the New Lender has, prior to the transfer taking
effect, confirmed in writing to the Agent (acting on behalf of all the
other Lenders) and to the Parent that it undertakes to be bound by the
terms of each of the Finance Documents as a Lender in form and substance
satisfactory to the Agent and the Parent, in the case of the Parent not
to be unreasonably withheld or delayed. On any such transfer being made,
the Existing Lender will be relieved of its obligations to the extent
that they are transferred to the Transferee.
24.3 PARENT UNDERTAKING
The Parent will execute such documents and agreements as are necessary
to effect a transfer of rights or obligations to a New Lender hereunder.
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24.4 LENDERS ABILITY TO SUB-CONTRACT
Nothing in this Agreement will restrict the ability of a Lender to
sub-contract any or all of its obligations under the Finance Documents
(or any of them) if such Lender remains liable under this Agreement in
relation to those obligations.
24.5 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
24.5.1 Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender
for:
(a) the legality, validity, effectiveness, adequacy or enforceability
of the Finance Documents or any other documents;
(b) the financial condition of any Obligor;
(c) the performance and observance by any Obligor of its obligations
under the Finance Documents or any other documents; or
(d) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
24.5.2 Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:
(a) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection
with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Existing
Lender in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst
any amount is or may be outstanding under the Finance Documents
or any Commitment is in force.
24.5.3 Nothing in any Finance Document obliges an Existing Lender to:
(a) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 24; or
(b) support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Obligor of its
obligations under the Finance Documents or otherwise.
24.6 PROCEDURE FOR TRANSFER
24.6.1 Subject to the conditions set out in Clause 24.2 a transfer is effected
in accordance with Clause 24.6.2 when the Agent executes an otherwise
duly completed Transfer Certificate delivered to it by the Existing
Lender and the New Lender. The Agent shall, as soon as reasonably
practicable after receipt by it of a duly completed Transfer Certificate
appearing on its face to comply with the terms of this
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Agreement and delivered in accordance with the terms of this Agreement,
execute that Transfer Certificate.
24.6.2 On the Transfer Date:
(a) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and obligations
under the Finance Documents each of the Obligors and the Existing
Lender shall be released from further obligations towards one
another under the Finance Documents and their respective rights
against one another shall be cancelled (being the "DISCHARGED
RIGHTS AND OBLIGATIONS");
(b) each of the Obligors and the New Lender shall assume obligations
towards one another and/or acquire rights against one another
which differ from the Discharged Rights and Obligations only
insofar as that Obligor and the New Lender have assumed and/or
acquired the same in place of that Obligor and the Existing
Lender;
(c) the Agent, the Arranger, the New Lender and other Lenders shall
acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had the New
Lender been an Original Lender with the rights and/or obligations
acquired or assumed by it as a result of the transfer and to that
extent the Agent, the Arranger and the Existing Lender shall each
be released from further obligations to each other under this
Agreement; and
(d) the New Lender shall become a Party as a "Lender".
24.7 DISCLOSURE OF INFORMATION
Any Lender may disclose to any of its Affiliates and any other person:
(a) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
(b) with (or through) whom that Lender enters into (or may
potentially enter into) any sub-participation in relation to, or
any other transaction under which payments are to be made by
reference to, this Agreement or any Obligor; or
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,
any information about any Obligor, the Group and the Finance Documents
as that Lender shall consider appropriate.
25 CHANGES TO THE OBLIGORS
25.1 ASSIGNATIONS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
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25.2 ADDITIONAL BORROWERS
25.2.1 The Parent may request that any of its wholly owned Subsidiaries becomes
an Additional Borrower. That Subsidiary shall become an Additional
Borrower if:
(a) the Agent approve the addition of that Subsidiary;
(b) the Parent delivers to the Agent a duly completed and executed
Accession Letter;
(c) the Parent confirms that no Default is continuing or would occur
as a result of that Subsidiary becoming an Additional Borrower;
and
(d) the Agent has received all the documents and other evidence
listed in Part 2 of Schedule 3 in relation to that Additional
Borrower, each in form and substance satisfactory to the Agent.
25.2.2 The Agent shall notify the Parent and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to
it) all the documents and other evidence listed in Part 2 of Schedule 3.
25.3 RESIGNATION OF A BORROWER
25.3.1 The Parent may request that a Borrower (other than the Parent) ceases to
be a Borrower by delivering a Resignation Letter to the Agent.
25.3.2 The Agent shall accept a Resignation Letter and notify the Parent and
the Lenders of its acceptance if:
(a) no Default is continuing or would result from the acceptance of
the Resignation Letter (and the Parent has confirmed this is the
case); and
(b) the Borrower is under no actual or contingent obligations as a
Borrower under any Finance Documents,
whereupon that company shall cease to be a Borrower and shall have no
further rights or obligations under the Finance Documents.
25.4 ADDITIONAL GUARANTORS
25.4.1 The Parent may request that any of its Subsidiaries become an Additional
Guarantor. That Subsidiary shall become an Additional Guarantor if:
(a) the Parent delivers a duly completed and executed Accession
Letter to the Agent; and
(b) the Agent has received all the documents and other evidence
listed in Part 2 of Schedule 3 in relation to that Additional
Guarantor, each in form and substance satisfactory to the Agent.
25.4.2 The Agent shall notify the Parent and the Finance Parties promptly upon
being satisfied that it has received (in form and substance satisfactory
to it) all the documents and other evidence listed in Part 2 of Schedule
3.
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25.5 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the relevant
Subsidiary that the Repeating Representations are true and correct in
relation to it as at the date of delivery as if made by reference to the
facts and circumstances then existing.
25.6 RESIGNATION OF A GUARANTOR
25.6.1 The Parent may request that a Guarantor (other than the Parent) ceases
to be a Guarantor by delivering a Resignation Letter to the Agent.
25.6.2 The Agent shall accept a Resignation Letter and notify the Parent and
the Finance Parties of its acceptance if:
(a) no Default is continuing or would result from the acceptance of
the Resignation Letter (and the Parent has confirmed this is the
case); and
(b) all the Finance Parties have consented to the Parent's request.
25.6.3 The Security Trustee shall thereafter execute and deliver a Deed of
Release from the Guarantee to the former Guarantor.
26 SYNDICATION
26.1 OBLIGORS' UNDERTAKINGS
The Obligors acknowledge that syndication of the Facilities will take
place and undertake to take reasonable steps to assist and co-operate
with the Agent in syndication by, among other things:
(a) co-operating with site visits by the Lenders and persons invited
by the Agent and/or any Lender to participate in the Facilities
(each such person, a "PROPOSED SYNDICATE LENDER");
(b) participating in presentations to the Proposed Syndicate Lenders
concerning the Group Companies and their activities;
(c) using reasonable endeavours to obtain appropriate authorisations
from the Auditors, other accountants, consultants and
professional advisers to release for the benefit of the Proposed
Syndicate Lenders any information addressed to any Finance Party;
(d) refraining from making any statement, announcement or publication
or doing any act or thing which is designed to obstruct
syndication in any way;
(e) providing the Proposed Syndicate Lenders with such information
relating to the Group Companies and their activities as the
Proposed Syndicate Lenders reasonably request;
(f) assisting the Agent and each Lender in the preparation and review
of any information which the Agent and/or a Lender reasonably
requires for the purposes of syndication;
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(g) passing on to the Agent any enquiries received by them from
potential Lenders;
(h) agreeing to amendments to the Finance Documents of an
administrative or technical nature or to correct typographical or
clerical errors; and
(i) instructing (at its cost) such additional diligence as may be
requested by the Agent, a Lender or a Proposed Syndicate Lender.
26.2 COSTS OF SYNDICATION
All legal costs and expenses payable by the Agent or any other Finance
Party in connection with any syndication will be reimbursed by the
Parent to the Agent on demand by the Agent together with value added tax
(if any).
27 ROLE OF THE AGENT, THE SECURITY TRUSTEE AND THE ARRANGER
27.1 APPOINTMENT OF THE AGENT
27.1.1 Each of the Arranger and the Lenders appoints the Agent to act as its
agent under and in connection with the Finance Documents.
27.1.2 Each of the Arranger and the Lenders authorises the Agent to exercise
the rights, powers, authorities and discretions specifically given to
the Agent under or in connection with the Finance Documents together
with any other incidental rights, powers, authorities and discretions.
27.2 DUTIES OF THE AGENT
27.2.1 The Agent shall promptly forward to a Party the original or a copy of
any document which is delivered to the Agent for that Party by any other
Party.
27.2.2 If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a
Default, it shall promptly notify the other Finance Parties.
27.2.3 The Agent shall promptly notify the other Finance Parties of any Default
arising under Clause 23.1.
27.2.4 The Agent's duties under the Finance Documents are solely mechanical and
administrative in nature.
27.3 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the Arranger
has no obligations of any kind to any other Party under or in connection
with any Finance Document.
27.4 NO FIDUCIARY DUTIES
27.4.1 Nothing in this Agreement constitutes the Agent or the Arranger as a
trustee or fiduciary of any other person.
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27.4.2 Neither the Agent nor the Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for
its own account.
27.5 BUSINESS WITH THE GROUP
The Agent and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any
member of the Group.
27.6 RIGHTS AND DISCRETIONS OF THE AGENT
27.6.1 The Agent may rely on:
(a) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(b) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may reasonably
be assumed to be within his knowledge or within his power to
verify.
27.6.2 The Agent may assume (unless it has received notice to the contrary in
its capacity as agent for the Lenders) that:
(a) no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 23.1);
(b) any right, power, authority or discretion vested in any Party or
the Majority Lenders has not been exercised; and
(c) any notice or request made by the Parent (other than a
Utilisation Request or Selection Notice) is made on behalf of and
with the consent and knowledge of all the Obligors.
27.6.3 The Agent may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
27.6.4 The Agent may act in relation to the Finance Documents through its
personnel and agents.
27.7 MAJORITY LENDERS' INSTRUCTIONS
27.7.1 Unless a contrary indication appears in a Finance Document, the Agent
shall:
(a) act in accordance with any instructions given to it by the
Majority Lenders (or, if so instructed by the Majority Lenders,
refrain from acting or exercising any right, power, authority or
discretion vested in it as Agent); and
(b) not be liable for any act (or omission) if it acts (or refrains
from taking any action) in accordance with such an instruction of
the Majority Lenders.
27.7.2 Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Lenders and the Arranger.
27.7.3 The Agent may refrain from acting in accordance with the instructions of
the Majority Lenders (or, if appropriate, the Lenders) until it has
received such security
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as it may require for any cost, loss or liability (together with any
associated VAT) which it may incur in complying with the instructions.
27.7.4 In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.
27.7.5 The Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender's consent) in any legal or arbitration proceedings
relating to any Finance Document.
27.8 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor the Arranger:
(a) is responsible for the adequacy, accuracy and/or completeness of
any information (whether oral or written) supplied by the Agent,
the Arranger, an Obligor or any other person given in or in
connection with any Finance Document; or
(b) is responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any other
agreement, arrangement or document entered into, made or executed
in anticipation of or in connection with any Finance Document.
27.9 EXCLUSION OF LIABILITY
27.9.1 Without limiting Clause 27.9.2, the Agent will not be liable for any
action taken by it under or in connection with any Finance Document,
unless directly caused by its gross negligence or wilful misconduct.
27.9.2 No Party may take any proceedings against any officer, employee or agent
of the Agent in respect of any claim it might have against the Agent or
in respect of any act or omission of any kind by that officer, employee
or agent in relation to any Finance Document and any officer, employee
or agent of the Agent may rely on this Clause.
27.9.3 The Agent will not be liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance
Documents to be paid by the Agent if the Agent has taken all necessary
steps as soon as reasonably practicable to comply with the regulations
or operating procedures of any recognised clearing or settlement system
used by the Agent for that purpose.
27.10 LENDERS' INDEMNITY TO THE AGENT
Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) indemnify the
Agent, within three Business Days of demand, against any cost, loss or
liability incurred by the Agent (otherwise than by reason of the Agent's
gross negligence or wilful misconduct) in acting as Agent under the
Finance Documents (unless the Agent has been reimbursed by an Obligor
pursuant to a Finance Document).
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27.11 RESIGNATION OF THE AGENT
27.11.1 The Agent may resign and appoint one of its Affiliates acting through an
office in the United Kingdom as successor by giving notice to the
Lenders and the Parent.
27.11.2 Alternatively the Agent may resign by giving notice to the Lenders and
the Parent, in which case the Majority Lenders (after consultation with
the Parent) may appoint a successor Agent.
27.11.3 If the Majority Lenders have not appointed a successor Agent in
accordance with Clause 27.11.2 within 30 days after notice of
resignation was given, the Agent (after consultation with the Parent)
may appoint a successor Agent (acting through an office in the United
Kingdom).
27.11.4 The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance
as the successor Agent may reasonably request for the purposes of
performing its functions as Agent under the Finance Documents.
27.11.5 The Agent's resignation notice shall only take effect upon the
appointment of a successor.
27.11.6 Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this Clause 27.
Its successor and each of the other Parties shall have the same rights
and obligations amongst themselves as they would have had if such
successor had been an original Party.
27.11.7 After consultation with the Parent, the Majority Lenders may, by notice
to the Agent, require it to resign in accordance with Clause 27.11.2. In
this event, the Agent shall resign in accordance with Clause 27.11.2.
27.12 CONFIDENTIALITY
27.12.1 In acting as agent for the Finance Parties, the Agent shall be regarded
as acting through its agency division which shall be treated as a
separate entity from any other of its divisions or departments.
27.12.2 If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department
and the Agent shall not be deemed to have notice of it.
27.12.3 Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Arranger are obliged to disclose to
any other person:
(a) any confidential information; or
(b) any other information if the disclosure would or might in its
reasonable opinion constitute a breach of any law or a breach of
a fiduciary duty.
27.13 RELATIONSHIP WITH THE FINANCE PARTIES
27.13.1 The Agent may treat each Finance Party as a Finance Party, entitled to
payments under this Agreement and acting through its Facility Office
unless it has received
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not less than five Business Days prior notice from that Finance Party to
the contrary in accordance with the terms of this Agreement.
27.13.2 Each Finance Party shall supply the Agent with any information required
by the Agent in order to calculate the Mandatory Cost in accordance with
Schedule 6.
27.14 CREDIT APPRAISAL BY THE FINANCE PARTIES
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Finance Party confirms to the Agent and the Arranger that it has
been, and will continue to be, solely responsible for making its own
independent appraisal and investigation of all risks arising under or in
connection with any Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of the
Group;
(b) the legality, validity, effectiveness, adequacy or enforceability
of any Finance Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under
or in connection with any Finance Document;
(c) whether that Finance Party has recourse, and the nature and
extent of that recourse, against any Party or any of its
respective assets under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents
or any other agreement, arrangement or document entered into,
made or executed in anticipation of, under or in connection with
any Finance Document; and
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent, any
Party or by any other person under or in connection with any
Finance Document, the transactions contemplated by the Finance
Documents or any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection
with any Finance Document.
27.15 FINANCE PARTY'S TAX STATUS CONFIRMATION
Each Finance Party confirms in favour of the Agent on the date of this
Agreement or, in the case of a Lender which becomes a Party pursuant to
a transfer or assignment, on the date on which the relevant transfer or
assignment becomes effective that either:
(a) it is not resident for tax purposes in the United Kingdom and is
beneficially entitled to its share of the Loan and associated
interest; or
(b) it is a bank as defined for the purposes of section 349 of the
Taxes Act and is beneficially entitled to its share of the Loan
and associated interest,
and each Finance Party shall promptly notify the Agent if there is any
change in its position from that set out above.
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27.16 REFERENCE LENDERS
If a Reference Lender (or, if a Reference Lender is not a Finance Party,
the Finance Party of which it is an Affiliate) ceases to be a Finance
Party, the Agent shall (in consultation with the Parent) appoint another
Finance Party or an Affiliate of a Finance Party to replace that
Reference Lender.
27.17 APPOINTMENT OF THE SECURITY TRUSTEE
27.17.1 Each Finance Party (except the Security Trustee) appoints the Security
Trustee (which accepts such appointment) as its trustee to hold the
Security Documents and all rights, powers and benefits, and the proceeds
of realisation thereunder in trust for the benefit of the Finance
Parties according to their respective entitlements under this Agreement
and the other Finance Documents, with the right and power to exercise
the rights, powers, authorities and discretions conferred on the
Security Trustee under the Security Documents and the other Finance
Documents, together with any other incidental rights, powers,
authorities and discretions, as if it were beneficially entitled thereto
in its own right.
27.17.2 The provisions of Clause 15.3, Clause 17 and Clauses 27.5 to 27.12
(inclusive) and Clause 27.11 shall apply mutatis mutandis to the
Security Trustee as if reference to the "Agent" were references also to
the Security Trustee, except that the Security Trustee's resignation or
removal shall not take effect until all necessary documents have been
entered into to substitute its successor as holder of the Security
Documents under the trust hereby constituted.
28 CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the extent,
order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to
its affairs (tax or otherwise) or any computations in respect of
Tax.
29 SHARING AMONG THE LENDERS
29.1 PAYMENTS TO LENDERS
If a Lender (a "RECOVERING LENDER") receives or recovers any amount from
an Obligor other than in accordance with Clause 30 and applies that
amount to a payment due under the Finance Documents then:
(a) the Recovering Lender shall, within three Business Days, notify
details of the receipt or recovery, to the Agent;
(b) the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Lender would have been paid
had the receipt or recovery been received or made by the Agent
and distributed in accordance with Clause 30, without taking
account of any Tax which
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would be imposed on the Agent in relation to the receipt,
recovery or distribution; and
(c) the Recovering Lender shall, within three Business Days of demand
by the Agent, pay to the Agent an amount (the "SHARING PAYMENT")
equal to such receipt or recovery less any amount which the Agent
determines may be retained by the Recovering Lender as its share
of any payment to be made, in accordance with Clause 30.5.
29.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other
than the Recovering Lender) in accordance with Clause 30.5.
29.3 RECOVERING LENDER'S RIGHTS
29.3.1 On a distribution by the Agent under Clause 29.2, the Recovering Lender
will be subrogated to the rights of the Finance Parties which have
shared in the redistribution.
29.3.2 If and to the extent that the Recovering Lender is not able to rely on
its rights under paragraph (a) above, the relevant Obligor shall be
liable to the Recovering Lender for a debt equal to the Sharing Payment
which is immediately due and payable.
29.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a Recovering
Lender becomes repayable and is repaid by that Recovering Lender, then:
(a) each Lender which has received a share of the relevant Sharing
Payment pursuant to Clause 29.2 shall, upon request of the Agent,
pay to the Agent for account of that Recovering Lender an amount
equal to its share of the Sharing Payment (together with an
amount as is necessary to reimburse that Recovering Lender for
its proportion of any interest on the Sharing Payment which that
Recovering Lender is required to pay); and
(b) that Recovering Lender's rights of subrogation in respect of any
reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing Lender for the amount so reimbursed.
29.5 EXCEPTIONS
29.5.1 This Clause 29 shall not apply to the extent that the Recovering Lender
would not, after making any payment pursuant to this Clause, have a
valid and enforceable claim against the relevant Obligor.
29.5.2 A Recovering Lender is not obliged to share with any other Lender any
amount which the Recovering Lender has received or recovered as a result
of taking legal or arbitration proceedings, if:
(a) it notified the other Lenders of the legal or arbitration
proceedings; and
(b) the other Lender had an opportunity to participate in those legal
or arbitration proceedings but did not do so as soon as
reasonably practicable
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having received notice or did not take separate legal or
arbitration proceedings.
30 PAYMENT MECHANICS
30.1 PAYMENTS TO THE AGENT
30.1.1 On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or Lender shall make the
same available to the Agent (unless a contrary indication appears in a
Finance Document) for value on the due date at the time and in such
funds specified by the Agent as being customary at the time for
settlement of transactions in the relevant currency in the place of
payment.
30.1.2 Payment shall be made to such account in the principal financial centre
of the country of that currency with such bank as the Agent specifies.
30.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Finance Documents for
another Party shall, subject to Clause 30.3 and Clause 30.4 be made
available by the Agent as soon as practicable after receipt to the Party
entitled to receive payment in accordance with this Agreement (in the
case of a Lender, for the account of its Facility Office), to such
account as that Party may notify to the Agent by not less than five
Business Days' notice with a bank in the principal financial centre of
the country of that currency.
30.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent may (with the consent of the Obligor or in accordance with
Clause 31) apply any amount received by it for that Obligor in or
towards payment (on the date and in the currency and funds of receipt)
of any amount due from that Obligor under the Finance Documents or in or
towards purchase of any amount of any currency to be so applied.
30.4 CLAWBACK
30.4.1 Where a sum is to be paid to the Agent under the Finance Documents for
another Party, the Agent is not obliged to pay that sum to that other
Party (or to enter into or perform any related exchange contract) until
it has been able to establish to its satisfaction that it has actually
received that sum.
30.4.2 If the Agent pays an amount to another Party and it proves to be the
case that the Agent had not actually received that amount, then the
Party to whom that amount (or the proceeds of any related exchange
contract) was paid by the Agent shall on demand refund the same to the
Agent together with interest on that amount from the date of payment to
the date of receipt by the Agent, calculated by the Agent to reflect its
cost of funds.
30.5 PARTIAL PAYMENTS
30.5.1 If the Agent receives a payment that is insufficient to discharge all
the amounts then due and payable by an Obligor under the Finance
Documents, the Agent shall apply
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that payment towards the obligations of that Obligor under the Finance
Documents in the following order:
(a) FIRST, in or towards payment pro rata of any unpaid fees, costs
and expenses of the Agent under the Finance Documents;
(b) SECONDLY, in or towards payment pro rata of any accrued interest
or commission due but unpaid under this Agreement;
(c) THIRDLY, in or towards payment pro rata of any principal due but
unpaid under this Agreement; and
(d) FOURTHLY, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.
30.5.2 The Agent shall, if so directed by the Majority Lenders, vary the order
set out in Clause 30.5.1.
30.5.3 Clauses 30.5.1 and 30.5.2 will override any appropriation made by an
Obligor.
30.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction
for) set-off or counterclaim.
30.7 BUSINESS DAYS
30.7.1 Any payment which is due to be made on a day that is not a Business Day
shall be made on the next Business Day in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
30.7.2 During any extension of the due date for payment of any principal or an
Unpaid Sum under this Agreement interest is payable on the principal at
the rate payable on the original due date.
30.8 CURRENCY OF ACCOUNT
30.8.1 Subject to Clause 30.8.2 to 30.8.5, the relevant Base Currency is the
currency of account and payment for any sum due from an Obligor under
any Finance Document.
30.8.2 A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum
shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.
30.8.3 Each payment of interest shall be made in the currency in which the sum
in respect of which the interest is payable was denominated when that
interest accrued.
30.8.4 Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
30.8.5 Any amount expressed to be payable in a currency other than Sterling, US
Dollars or Canadian Dollars shall be paid in that other currency.
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30.9 CHANGE OF CURRENCY
30.9.1 Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of any
country as the lawful currency of that country, then:
(a) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Agent (after
consultation with the Parent); and
(b) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by the Agent (acting
reasonably).
30.9.2 If a change in any currency of a country occurs, this Agreement will, to
the extent the Agent (acting reasonably and after consultation with the
Parent) specifies to be necessary, be amended to comply with any
generally accepted conventions and market practice in the Relevant
Interbank Market and otherwise to reflect the change in currency.
31 SET-OFF
A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party
to that Obligor, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.
32 NOTICES
32.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
32.2 ADDRESSES
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:
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(a) in the case of the Parent:-
Address: Elphinstone Research Centre
Tranent
EH33 2NE
Fax: 01875 613844
Attention: Walter Nimmo
(b) in the case of the Agent:-
Address: 245 Park Avenue
New York
NY10167
Fax: 001 212 272 9804
Attention: G and A Services
(c) in the case of the Security Trustee:-
Address: 245 Park Avenue
New York
NY10167
Fax: 001 212 272 9804
Attention: G and A Services
(d) in the case of the Working Capital Bank:-
Address: 245 Park Avenue
New York
NY10167
Fax: 001 212 272 9804
Attention: G and A Services
(e) in the case of each other Lender or any other Original Obligor,
that notified in writing to the Agent from time to time,
or any substitute address, fax number or department or officer as the
Party may notify to the Agent (or the Agent may notify to the other
Parties, if a change is made by the Agent) by not less than five
Business Days' notice.
32.3 DELIVERY
32.3.1 Any communication or document made or delivered by one person to another
under or in connection with the Finance Documents will only be
effective:
(a) if by way of fax, when received in legible form; or
(b) if by way of letter, when it has been left at the relevant
address or two Business Days after being deposited in the post
first class postage prepaid in an envelope addressed to it at
that address; or
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and, if a particular department or officer is specified as part of its
address details provided under Clause 32.2, if addressed to that
department or officer.
32.3.2 Any communication or document to be made or delivered to the Agent will
be effective only when actually received by the Agent and then only if
it is expressly marked for the attention of the department or officer
specified as part of its address details provided under Clause 32.2.
32.3.3 All notices from or to an Obligor shall be sent through the Agent.
32.3.4 Any communication or document made or delivered to the Parent in
accordance with this Clause will be deemed to have been made or
delivered to each of the Obligors.
32.4 NOTIFICATION OF ADDRESS, FAX NUMBER AND TELEX NUMBER
Promptly upon receipt of notification of an address, fax number and
telex number or change of address, fax number or telex number pursuant
to Clause 32.2 or changing its own address, fax number or telex number,
the Agent shall notify the other Parties.
32.5 ENGLISH LANGUAGE
32.5.1 Any notice given under or in connection with any Finance Document must
be in English.
32.5.2 All other documents provided under or in connection with any Finance
Document must be:
(a) in English; or
(b) if not in English, and if so required by the Agent, accompanied
by a certified English translation and, in this case, the English
translation will prevail unless the document is a constitutional,
statutory or other official document.
33 ANNOUNCEMENTS
Without prejudice to Clause 22.2.1 the Arranger shall be entitled (at
its own expense) to make any press release, tombstone, advertisement or
other similar public announcement or otherwise publish any information
relating to or concerning the Merger or the Facilities as it may wish
(acting reasonably) provided that the Arranger shall obtain the consent
of the Parent prior to making any such announcement.
34 CALCULATIONS AND CERTIFICATES
34.1 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
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34.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or
amount under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
34.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual
number of days elapsed and a year of 365 days in respect of Sterling
borrowings and 360 days in respect of US Dollars or Canadian Dollars or,
in any case where the practice in the Relevant Interbank Market differs,
in accordance with that market practice.
35 PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction will in any way
be affected or impaired.
36 REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise or the exercise of
any other right or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
37 AMENDMENTS AND WAIVERS
37.1 REQUIRED CONSENTS
37.1.1 Subject to Clause 37.2 any term of the Finance Documents may be amended
or waived only with the consent of the Majority Lenders and the Obligors
and any such amendment or waiver will be binding on all Parties.
37.1.2 The Agent may effect, on behalf of any Finance Party, any amendment or
waiver permitted by this Clause.
37.2 EXCEPTIONS
37.2.1 An amendment or waiver that has the effect of changing or which relates
to:
(a) the definition of "Majority Lenders" in Clause 1.1;
(b) an extension to the date of payment of any amount under the
Finance Documents;
(c) a reduction in the Margin or the amount of any payment of
principal, interest, fees or commission payable;
(d) an increase in Commitment;
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(e) a change to the Borrowers or Guarantors other than in accordance
with Clause 25;
(f) any provision which expressly requires the consent of all the
Lenders; or
(g) Clause 2.2, Clause 24 or this Clause 37;
shall not be made without the prior consent of all the Lenders.
37.2.2 An amendment or waiver which relates to the rights or obligations of the
Agent or the Arranger may not be effected without the consent of the
Agent or the Arranger.
38 GOVERNING LAW
This Agreement is governed by English law.
39 ENFORCEMENT
39.1 JURISDICTION OF ENGLISH COURTS
39.1.1 The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including a dispute
regarding the existence, validity or termination of this Agreement) (a
"DISPUTE").
39.1.2 The Parties agree that the courts of England are the most appropriate
and convenient courts to settle Disputes and accordingly no Party will
argue to the contrary.
39.1.3 This Clause 39.1 is for the benefit of the Finance Parties only. As a
result, no Finance Party shall be prevented from taking proceedings
relating to a Dispute in any other courts with jurisdiction. To the
extent allowed by law, the Finance Parties may take concurrent
proceedings in any number of jurisdictions.
39.2 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any
relevant law, each Obligor (other than an Obligor incorporated in
England and Wales):
(a) irrevocably appoints the Parent as its agent to accept service on
its behalf in relation to any proceedings before the English
courts in connection with any Finance Document; and
(b) agrees that failure by such agent to notify the relevant Obligor
of such server of proceedings will not invalidate the proceedings
concerned.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.
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SCHEDULE 1
THE ORIGINAL OBLIGORS
NAME OF ORIGINAL BORROWER REGISTRATION NUMBER (OR REGISTERED OFFICE
EQUIVALENT, IF ANY) (OR EQUIVALENT)
Inveresk Research Group 198206 Elphinstone
Limited Research Centre,
Tranent, East
Lothian EH33 2NE
Canada Inc (now renamed 38444811 1170 Peel Street,
Inveresk Research (Canada) Montreal, Quebec,
Inc) H3B 4S8
NAME OF ORIGINAL GUARANTOR REGISTRATION NUMBER (OR REGISTERED OFFICE
EQUIVALENT, IF ANY) (OR EQUIVALENT)
Canada Inc (now renamed 38444811 1170 Peel Street,
Inveresk Research (Canada) Montreal, Quebec,
Inc) H3B 4S8
Indigo Acquisition Corp 1209 Orange
Street,
Wilmington,
Delaware
Inveresk Research Holdings 3662374 Royal London
Limited House, 22/25
Finsbury Square,
London EC2A 1DX
Inveresk Research SC091725 Elphinstone
International Limited Research Centre,
Tranent, East
Lothian EH33 2NE
Inveresk Clinical Research SC109802 Elphinstone
Limited Research Centre,
Tranent, East
Lothian EH33 2NE
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SCHEDULE 2
THE ORIGINAL LENDERS
- --------------------------------------------------------------------------------
NAME OF ORIGINAL LENDER BEAR STEARNS
CORPORATE
LENDING INC
- --------------------------------------------------------------------------------
Parent Series 1 Refinancing Term Facility Commitment L20.5m
- --------------------------------------------------------------------------------
Parent Series 2 Refinancing Term Facility Commitment L5m
- --------------------------------------------------------------------------------
Parent Series 1 Acquisition Term Facility Commitment US$5.25m
- --------------------------------------------------------------------------------
Parent Series 2 Acquisition Term Facility Commitment US$2.5m
- --------------------------------------------------------------------------------
Canada Holdco Series 1 Acquisition Term Facility Commitment US$37.5m
- --------------------------------------------------------------------------------
Canada Holdco Series 2 Acquisition Term Facility Commitment US$10m
- --------------------------------------------------------------------------------
Capital Expenditure Facility Commitment C$15.3m
- --------------------------------------------------------------------------------
Working Capital Facility Commitment L6m
- --------------------------------------------------------------------------------
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SCHEDULE 3
CONDITIONS PRECEDENT
PART 1
CONDITIONS PRECEDENT TO INITIAL UTILISATION
1 ORIGINAL OBLIGORS
(a) A copy of the constitutional documents of each Original Obligor.
(b) A copy of a resolution of the board of directors of each Original
Obligor:
(i) approving the terms of, and the transactions contemplated
by, the Finance Documents to which it is a party and
resolving that it execute the Finance Documents to which
it is a party;
(ii) authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf;
and
(iii) authorising a specified person or persons, on its behalf,
to sign and/or despatch all documents and notices
(including, if relevant, any Utilisation Request and
Selection Notice) to be signed and/or despatched by it
under or in connection with the Finance Documents to which
it is a party.
(c) A specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above.
(d) A certificate of the Parent (signed by a director) confirming
that borrowing or guaranteeing, as appropriate, the Total
Commitments would not cause any borrowing, guaranteeing or
similar limit binding on any Original Obligor to be exceeded.
(e) A certificate of an authorised signatory of the relevant Original
Obligor certifying that each copy document relating to it
specified in this Part I of Schedule 3 is correct, complete and
in full force and effect as at a date no earlier than the date of
this Agreement.
2 LEGAL OPINIONS
A legal opinion, in the agreed form, to the Lenders from US counsel for
US Newco concerning the Tender Offer and Merger Agreement, and including
without limitation opinions that:
(a) US Newco have the corporate power to enter into the Merger
Documents;
(b) the execution and performance of the Merger Documents have been
duly authorised by all requisite action of the board of directors
and shareholders of US Newco;
(c) US Newco has duly executed and delivered the Merger Documents;
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(d) the Merger Documents are valid and binding obligations of US
Newco, enforceable in accordance with their terms, subject to
customary exceptions;
(e) execution and performance of the Merger Documents will not
violate any laws (including without limitation Regulations T, U,
and X of the Board of Governors of the Federal Reserve System,
the Investment Company Act of 1940 and the Public Utility Holding
Company Act of 1935), any formation documents of US Newco or
Parent, any Merger Document, or any material contract of US Newco
or Parent, result in the creation of any lien or encumbrance on
the property of US Newco or Parent, or violate any existing
order, writ, injunction or decree of any court or governmental
instrumentality;
(f) no consents, approvals, authorisations or orders are required to
enter into the Merger Documents or take any action in connection
with the consummation of the transactions required therein.
3 EQUITY DOCUMENTS
(a) Certified Copies of the Investment Agreement, Loan Stock
Instrument and Articles of Association with evidence satisfactory
to the Agent that the Articles have been adopted except for any
conditions precedent relating to availability of the Facilities.
(b) Evidence that all shares to be issued on or prior to the Drawdown
Date have been issued fully paid and that all subscription funds
have been paid to, or to the order of, the Parent.
(c) Evidence that all monies to be advanced to the Parent in respect
of the Loan Stock have been paid to, or to the order of, the
company.
4 SECURITY
(a) UK:
(i) a first and only standard security over each Property;
(ii) a first and only debenture/bond and floating charge from
the Parent, Inveresk Research Holding Limited, Inveresk
Research International Limited and Inveresk Clinical
Research Limited,
each in the agreed form;
(b) Canada:
(i) pledge by Canada Holdco in respect of its shareholding in
US Newco in the agreed form;
(ii) deed of hypothecation by Canada Holdco in the agreed form;
(c) US:
(i) US Newco security agreement in the agreed form;
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(ii) Inveresk Research North America Inc security agreement in
the agreed form; and
(iii) pledge/charge by US Newco in respect of the Tender Offer
Stock in the agreed form;
(d) Intercreditor Agreement in the agreed form.
5 FINANCIAL INFORMATION
(a) The Accountant's Report (and the engagement letter in relation to
it).
(b) The Business Plan.
(c) The most recent audited financial statements of each Target Group
Company (other than the Dormant Companies or any Target Group
Companies incorporated since that date) for the period to 31
December 2000.
(d) The most recent Target Management Accounts for the period ended
31 December 2000.
(e) Management Accounts for the period to 31 December 2000.
6 DUE DILIGENCE REPORTS
(a) The Insurance Report.
(b) The Legal Report.
(c) The Pensions Report.
(d) The Environmental Report.
(e) The Market Report.
(f) Canadian Report on Title.
7 MERGER
A Certified Copy of the executed Merger Agreement and the Stockholders
Agreement.
8 INSURANCE
(a) A duly certified full, complete and up to date schedule of all
insurances maintained by each member of the Group, referring to
the relevant policies.
(b) A certificate from a broker approved by the Agent that such
policies are in full force and effect with premiums paid to date,
and stating that all the assets of the Group as (and will,
following Closing remain) insured in the manner specified in the
Insurance Report.
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9 US
(a) good standing certificates in re US incorporated Target Group
Companies;
(b) lien searches against US incorporated Target Group Companies;
(c) a completed and executed Federal Reserve Form U-1.
10 MISCELLANEOUS
A summary of the fees and expenses incurred in connection with the
Acquisition.
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PART 2
CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR
1 An Accession Letter, duly executed by the Additional Obligor and the
Parent.
2 A copy of the constitutional documents of the Additional Obligor.
3 A copy of a resolution of the board of directors of the Additional
Obligor:
(a) approving the terms of, and the transactions contemplated by, the
Accession Letter and the Finance Documents and resolving that it
execute the Accession Letter;
(b) authorising a specified person or persons to execute the
Accession Letter on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices (including, in
relation to an Additional Borrower, any Utilisation Request or
Selection Notice) to be signed and/or despatched by it under or
in connection with the Finance Documents.
4 A specimen of the signature of each person authorised by the resolution
referred to in paragraph 3 above.
5 A certificate of the Additional Obligor (signed by a director)
confirming that borrowing or guaranteeing, as appropriate, the Total
Commitments would not cause any borrowing, guaranteeing or similar limit
binding on it to be exceeded.
6 A certificate of an authorised signatory of the Additional Obligor
certifying that each copy document listed in this Part 2 of Schedule 3
is correct, complete and in full force and effect as at a date no
earlier than the date of the Accession Letter.
7 A copy of any other Authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable in
connection with the entry into and performance of the transactions
contemplated by the Accession Letter or for the validity and
enforceability of any Finance Document.
8 If available, the latest audited financial statements of the Additional
Obligor.
9 A legal opinion of McGrigor Donald, legal advisers to the Arranger and
the Agent in Scotland and England.
10 If the Additional Obligor is incorporated in a jurisdiction other than
Scotland or England and Wales, a legal opinion of the legal advisers to
the Agent in the jurisdiction in which the Additional Obligor is
incorporated.
11 If the proposed Additional Obligor is incorporated in a jurisdiction
other than England and Wales or Scotland, evidence that the process
agent specified in Clause 39.2, if not an Obligor, has accepted its
appointment in relation to the proposed Additional Obligor.
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SCHEDULE 4
UTILISATION REQUEST
From: [Borrower]
To: [Agent]
Dated:
Dear Sirs
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 We wish to borrow a Loan on the following terms:
Proposed Utilisation Date: [ ] (or, if that is not a Business
Day, the next Business Day)
Facility to be utilised: [Relevant Series 1 Term Facility/Series 2 Term
Facility/Capital Expenditure Facility]
Amount: [ ] or, if less, the Available Facility
Interest Period: [ ]
2 We confirm that each condition specified in Clause 0 is satisfied on
the date of this Utilisation Request.
3 The proceeds of this Loan should be credited to [account].
4 This Utilisation Request is irrevocable.
Yours faithfully
.......................................
authorised signatory for
[name of relevant Borrower]
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SCHEDULE 5
SELECTION NOTICE
From: [Borrower]
To: [Agent]
Dated:
Dear Sirs
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 We refer to the following [ ] Loan[s] with an Interest Period ending
on [ ]
[We request that the next Interest Period for the above
[ ] Loan[s] is [ ]].
2 This Selection Notice is irrevocable.
Yours faithfully
.....................................
authorised signatory for
[the Parent on behalf of]
[name of relevant Borrower]
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SCHEDULE 6
MANDATORY COST FORMULA
1 The Mandatory Costs percentage rate is an addition to the interest
rate on an Advance to compensate any Lender for the cost attributable
to an Advance resulting from the imposition from time to time under
or pursuant to the Lender of England Act 1998 (the "Act") and/or by
the Lender of England and/or the Financial Services Authority (the
"FSA") (or other United Kingdom governmental authorities or agencies)
of a requirement to place non interest-bearing or Special Deposits
(whether interest bearing or not) with the Lender of England and/or
pay fees to the FSA calculated by reference to liabilities used to
fund the Advance.
The Mandatory Costs percentage rate will be the rate determined by
the Agent to be equal to the arithmetic mean (rounded upwards if
necessary to four decimal places) of the respective rates notified by
each of the Reference Lenders to the Agent as the rate resulting from
the application (as appropriate) of the following formulae:
in relation to Sterling Advances:
XL+S(L-C)+Fx0.01
----------------
100-(X+S)
in relation to other Advances:
Fx0.01
------
300
where:
X is the percentage of the Eligible Liabilities (in excess of
any stated minimum) by reference to which such Reference
Lender is required under or pursuant to the Act to maintain
cash ratio deposits with the Lender of England.
L is the percentage rate at which sterling deposits for the
relevant period are offered by such Reference Lender to
leading banks in the London Interbank Market at or about 11.00
am on that day.
F is the rate of charge payable by such Reference Lender to the
FSA pursuant to paragraph 2.02 or 2.03 (as appropriate) of the
Fees Regulations (but where for this purpose, the figure at
paragraph 2.02b or 2.03b (as appropriate) shall be deemed to
be zero) and expressed in pounds per L1 million of the Fee
Base of the Reference Lender.
S is the level of interest-bearing Special Deposits, expressed
as a percentage of Eligible Liabilities, which such Reference
Lender is required to maintain by the Lender of England (or
other United Kingdom governmental authorities or agencies).
C is the percentage rate per annum payable by the Lender of
England to such Reference Lender on Special Deposits.
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2 For the purposes of this Part of the Schedule:
(a) the terms "Eligible Liabilities" and "Special Deposits"
shall bear the meanings ascribed to them under or pursuant
to the Act or by the Lender of England (as may as
appropriate) on the day of application of the formula;
(b) Fee Base has the meaning ascribed to it for the purpose of,
and shall be calculated in accordance with, the Fees
Regulations;
(c) Fees Regulations means, as appropriate, either:
(i) the Banking Supervision (Fees) Regulations 1999;
or
(ii) such regulations as from time to time may be in
force,
relating to the payment of fees for banking supervision;
(d) the Mandatory Costs rate attributable to an Advance or
other sum for any period shall be calculated at or about
11.00 am (London time) on the first day of such period for
the duration of such period;
(e) if any Reference Lender fails to notify any such rate to
the Agent, the Mandatory Costs rate shall be determined on
the basis of the rate(s) notified to the Agent by the
remaining Reference Lender(s);
(f) the determination of the Mandatory Costs rate in relation
to any period shall, in the absence of manifest error, be
conclusive and binding on all parties hereto;
(g) X, L, S and C are to be expressed in the above formula as
numbers and not as percentages. A negative result obtained
from subtracting C from L should be counted as zero;
(h) if there is any change in circumstances (including the
imposition of alternative or additional requirements) which
in the reasonable opinion of the Agent renders or will
render either of the above formulae (or any element thereof
or any defined term used therein), inappropriate or
inapplicable, the Agent (following consultation with the
Parent and an Instructing Group) shall be entitled to vary
the same. Any such variation shall, in the absence of
manifest error, be conclusive and binding on all parties
and shall apply from the date specified in such notice;
(i) any reference to a provision of any statute, directive,
order or regulation herein is a reference to that provision
as amended or re-enacted from time to time;
(j) any reference to Lender or Reference Lender in this Part of
the Schedule shall be deemed to include a reference to any
holding company of such Lender or Reference Lender to the
extent to which such holding company incurs any Mandatory
Costs.
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SCHEDULE 7
FORM OF TRANSFER CERTIFICATES
To: [ ] as Agent
From: [The Existing Lender] (the "EXISTING LENDER") and [The New Lender]
(the "NEW LENDER")
Dated:
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 We refer to Clause 24.6:
(a) The Existing Lender and the New Lender agree to the
Existing Lender and the New Lender transferring by novation
all or part of the Existing Lender's Commitment, rights and
obligations referred to in the Schedule in accordance with
Clause 24.6.
(b) The proposed Transfer Date is [ ].
(c) The Facility Office and address, fax number and attention
details for notices of the New Lender for the purposes of
Clause 32.2 are set out in the Schedule.
2 The New Lender expressly acknowledges the limitations on the Existing
Lender's obligations set out in paragraph (c) of Clause 24.5.
3 This Transfer Certificate is governed by English law.
4 Schedule of Commitment/rights and obligations to be transferred.
COMMITMENT/RIGHTS AND OBLIGATIONS TO BE TRANSFERRED
[insert relevant details]
[Facility Office address, fax number and attention details for
notices and account details for payments,]
[Existing Lender] [New Lender]
By:.............................................. By:.............................................
Director/Authorised Signatory Director/Authorised Signatory
This Transfer Certificate is accepted by the Agent and the Transfer
Date is confirmed as [ ].
[Agent]
By:.............................................
Director/Authorised Signatory
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SCHEDULE 8
FORM OF ACCESSION LETTER
To: [ ] as Agent
From: [Subsidiary] and [Parent]
Dated:
Dear Sirs
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 [Subsidiary] agrees to become an Additional [Borrower]/[Guarantor]
and to be bound by the terms of the Facilities Agreement as an
Additional [Borrower]/[Guarantor] pursuant to
[Clause 25.2]/[Clause 25.4] of the Facilities Agreement. [Subsidiary]
is a company duly incorporated under the laws of [name of relevant
jurisdiction].
2 [Subsidiary's] administrative details are as follows:
Address:
Fax No:
Attention:
3 [The liability of [Subsidiary] as a Guarantor shall be limited to the
greater of:-
3.1 the highest amount the payment of which by [Subsidiary] is permitted
as determined as of the date hereof in accordance with section 123.66
of the Companies Act (Quebec); and
3.2 the highest amount the payment of which by [Subsidiary] is permitted
as determined as of the date of payment in accordance with section
123.66 of the Companies Act (Quebec).] [NOTE: TO BE INCLUDED ONLY
WHEN QUEBEC INCORPORATED GROUP MEMBER BECOMING ADDITIONAL GUARANTOR]
4 This letter is governed by English law.
[This Guarantor Accession Letter is entered into by deed.]
[Parent] [Subsidiary]
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SCHEDULE 9
FORM OF RESIGNATION LETTER
To: [ ] as Agent
From: [resigning Obligor] and Parent
Dated:
Dear Sirs
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 Pursuant to [Clause 25.3]/[Clause 25.6], we request that [resigning
Obligor] be released from its obligations as a [Borrower]/[Guarantor]
under the Facilities Agreement.
2 We confirm that:
(a) no Default is continuing or would result from the
acceptance of this request; and
(b) [[resigning Obligor] is under no actual or contingent
obligations as a Borrower under any Finance Documents]/[all
the Finance Parties have consented to the request that
[resigning Obligor] ceases to be a Guarantor].
3 This letter is governed by English law.
For and on behalf of For and on behalf of
[Parent] [Subsidiary]
By:........................................ By:.............................................
Director/Authorised Signatory Director/Authorised Signatory
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SCHEDULE 10
FORM OF COMPLIANCE CERTIFICATE
To: [ ] as Agent
From: [Company]
Dated:
Dear Sirs
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT
DATED 22 FEBRUARY 2001 (THE "FACILITIES AGREEMENT")
1 We refer to the Facilities Agreement. This is a Compliance
Certificate.
2 We confirm that: [Insert details of covenants to be certified]
3 [We confirm that no Default is continuing.]*
Signed: ..................... [.....................
Director Director
Of of
[Parent] [Parent]]
[insert applicable certification language]
............................
for and on behalf of
[name of auditors of the Parent]
- ----------
* If this statement cannot be made, the certificate should identify any Default
that is continuing and the steps, if any, being taken to remedy it.
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SCHEDULE 11
TIMETABLES
LOANS IN US$ LOANS IN L LOANS IN C$
------------ ---------- -----------
Delivery of a duly such time as the Agent such time as the Agent such time as the Agent
completed Utilisation (acting reasonably) may (acting reasonably) may (acting reasonably) may
Request (Clause 4.1.1) or specify* specify* specify*
a Selection Notice
(10.1.1)
Agent notifies Lenders of such time as the Agent such time as the Agent such time as the Agent
the Loan in accordance (acting reasonably) may (acting reasonably) may (acting reasonably) may
with clause 4.1.4.3 specify* specify* specify*
(Lenders' participation)
LIBOR is fixed Quotation Day as of Quotation Day as of Quotation Day as of
11.00 am London time 11.00 am London time 11.00 am London time
* For the purposes of this Schedule 11 such time period may not in any
circumstances exceed more than four Business Days.
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SCHEDULE 12
POST MERGER GROUP STRUCTURE
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[FLOW CHART]
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SCHEDULE 13
FORM OF GUARANTEE REQUEST
To: [WORKING CAPITAL BANK]
From: [BORROWER]
[date]
Dear Sirs,
INVERESK RESEARCH GROUP LIMITED - FACILITIES AGREEMENT DATED 22 FEBRUARY 2001
(THE "FACILITIES AGREEMENT")
Terms defined in the Facilities Agreement have the same meaning in this request.
We request a Bank Guarantee to be issued under the Working Capital Facility in
the form attached.
1 Issue Date:
2 Amount of Bank Guarantee;
3 Purpose of Bank Guarantee;
4 Expiry date of Bank Guarantee;
We confirm that today and on the Issue Date:
(a) the representations in Clause 0 to be repeated are and will be correct;
and
(b) no Default has occurred and is continuing or will occur on the issue of
the Bank Guarantee.
SIGNED
For and on behalf of
* [BORROWER]
(a company incorporated in [ ] under number [ ])
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SCHEDULE 14
CLINICAL GROUP MEMBERS
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SCHEDULE 15
KEY MAN INSURANCE
MANAGEMENT TEAM MEMBER AMOUNT PERIOD
- ---------------------- ------ ------
Stewart G Leslie L250,000 3 years
Nick Thornton L500,000 3 years
(or any replacement CEO)
Dr Walter S Nimmo L1,000,000 3 years
Mike Ankcorn L500,000 3 years
Paul Bancroft L250,000 3 years
Dr Ian P Sword L500,000 3 years
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SCHEDULE 16
PART 1 MATERIAL COMPANIES
Inveresk Research Group Limited
Inveresk Research International Limited
Inveresk Clinical Research Limited
Inveresk Research Holdings Limited
Inveresk Research (North America) Inc
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SCHEDULE 16
PART 2 DORMANT COMPANIES
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SCHEDULE 16
PART 3 OVERSEAS COMPANIES
Inveresk Research (North America) Inc
Inveresk Research (Canada) Inc
Indigo Acquisition Corp.
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SIGNATORIES
INVERESK RESEARCH GROUP LIMITED
By Walter S Nimmo
INVERESK RESEARCH (CANADA) INC
By Walter S Nimmo
INDIGO ACQUISITION CORP
By Walter S Nimmo
INVERESK RESEARCH HOLDINGS LIMITED
By Walter S Nimmo
INVERESK RESEARCH INTERNATIONAL LIMITED
By Walter S Nimmo
INVERESK CLINICAL RESEARCH LIMITED
By Walter S Nimmo
BEAR STEARNS CORPORATE LENDING INC
By an authorised signatory
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