LOAN AGREEMENT
for
Facilities of up to US$250,000,000
to
CORDIANT COMMUNICATIONS GROUP PLC
and others
Arranged by
THE BANK OF NEW YORK
and
HSBC INVESTMENT BANK PLC
Agent
HSBC INVESTMENT BANK PLC
Norton Rose
London
THIS AGREEMENT is dated 8 November 1999 and made BETWEEN:
(1) CORDIANT COMMUNICATIONS GROUP PLC as the Parent;
(2) THE COMPANIES whose names, registered numbers (if any) and registered
offices are set out in part A of schedule 1 as Original Borrowers;
(3) THE BANK OF NEW YORK and HSBC INVESTMENT BANK PLC as Arrangers;
(4) THE BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are set out
in schedule 2;
(5) HSBC INVESTMENT BANK PLC as Agent and Security Trustee;
(6) THE BANK OF NEW YORK as Swingline Bank; and
(7) HSBC BANK PLC as Overdraft Bank.
IT IS AGREED as follows:
1 PURPOSE AND DEFINITIONS
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to which:
(a) the Banks agree, according to their several obligations, to make
available to the Borrowers a revolving credit facility of up to
$125,000,000 or its equivalent in Optional Currencies, the Swingline
Bank agrees to make available to the Swingline Borrower a swingline
facility (including a letter of credit facility) of up to $18,000,000
and the Overdraft Bank agrees to make available to the Overdraft
Borrowers an overdraft facility of up to (pound) 4,000,000, subject to
an overall limit on all such facilities of $125,000,000, to be used
for the purposes of:
(i) refinancing the Existing Facilities;
(ii) funding the purchase consideration payable (initial and by
way of earn out) by Bates Deutschland Holdings GmbH for the
D Acquisition and to pay the costs and expenses incurred in
connection with the D Acquisition;
(iii) paying the costs and expenses incurred in connection with
the Waterloo Acquisition; and
(iv) other general corporate purposes;
(b) the Banks agree, according to their several obligations, to make
available a further revolving credit facility (with a conversion
option) of up to $125,000,000 or its equivalent in Optional
Currencies, to be used for general corporate purposes.
1.1 DEFINITIONS
In this Agreement, unless the context otherwise requires:
"Additional Borrower" means a wholly owned Subsidiary of the Parent which
becomes a Borrower in accordance with clause 18.11;
"Additional Cost" means, in relation to any period, a percentage calculated
for such period at an annual rate determined in accordance with schedule 5;
"Additional Overdraft Borrower" means any wholly owned Subsidiary of the
Parent which becomes an Overdraft Borrower in accordance with clause 18.11;
"Adjusted PBIT" means, in respect of a period, PBIT for that period plus
depreciation for that period less Property Payments in respect of that period;
"Advance" means each Revolving Credit Advance, each Swingline Advance and
the Conversion Advance;
"Affiliate" means, in relation to any person, a Subsidiary or a Holding
Company of that person and any other Subsidiary of a Holding Company of that
person;
"Agent" means HSBC Investment Bank plc or such other person as may be
appointed agent for the Banks pursuant to clause 19.13;
"Aggregate Net Proceeds" means in relation to an External Refinancing,
Flotation, Trade Sale or other Permitted Restricted Asset Disposal, the total
cash proceeds received in Dollars (or if not received in Dollars, their Dollar
equivalent at the date of receipt) by any member of the Group (including any
deferred or purchase price adjustment proceeds received by such member of the
Group) less:
(a) the reasonable costs, fees and expenses incurred by such member of the
Group in connection with such External Refinancing, Flotation or Trade
Sale or other Permitted Restricted Asset Disposal, as the case may be;
(b) (in the case of Flotation, Trade Sale or other Permitted Restricted
Asset Disposal) a reasonable provision for all Taxes (if any) incurred
by the relevant member of the Group in connection with such Flotation,
Trade Sale or other Permitted Restricted Asset Disposal, as the case
may be;
(c) (in the case of Flotation, Trade Sale or other Permitted Restricted
Asset Disposal) any amount used to repay any Indebtedness of any
member of the Group arising from, directly related to or as a direct
consequence of, such Flotation, Trade Sale or Permitted Restricted
Asset Disposal, as the case may be, secured on the relevant asset; and
(d) any other amount which the Agent (acting on the instructions of the
Majority Banks) may agree shall be excluded from the total cash
proceeds received in respect of the relevant External Refinancing,
Flotation, Trade Sale or other Permitted Restricted Asset Disposal in
determining the relevant Aggregate Net Proceeds;
"Arranger" means each of The Bank of New York of One Canada Square, London
E14 5AL and HSBC Investment Bank plc of Thames Exchange, 10 Queen Street Place,
London, EC4R 1BL and their respective successors in title;
"Auditors" means KPMG Audit Plc or such other auditing firm of
international standing as may be approved by the board of directors of the
Parent after prior consultation with the Agent;
"Authorised Officer" means that officer or officers of the Parent or the
Swingline Borrower authorised to sign Compliance Certificates, Drawdown Notices,
L/C Applications and any other notices, requests or confirmations referred to in
this Agreement or relating to the facilities granted pursuant to this Agreement;
"Availability Period" means the Facility A Availability Period or the
Facility B Availability Period;
"Banking Day" means:
(a) when LIBOR is to be determined in relation to euros or a National
Currency Unit, a TARGET Day; and
(b) for all other purposes a day (other than Saturday or Sunday) on which
banks are open for business in New York City and London and (in the
case of interest rate fixing and payments in relation to Optional
Currencies or payments in relation to National Currency Units) the
principal financial centre in the jurisdiction of the Optional
Currency or National Currency Unit concerned;
"Banks" means the banks and financial institutions listed in schedule 2 and
includes their successors in title and Substitutes;
"Bid Bond" means a bid, performance or advance payment bond or guarantee
issued by a financial institution to a client or prospective client of a member
of the Group in connection with a contract for which that member of the Group is
bidding or which has been awarded to that member of the Group;
"Borrowed Money" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks (provided that for the purposes of
calculating the amount of any such Indebtedness the calculation shall be net of
credit balances which together with the relevant debit balances are subject to
contractual netting arrangements), (ii) any bond, note, loan stock, debenture or
similar debt instrument, (iii) acceptance or documentary credit facilities, (iv)
receivables sold or discounted (otherwise than on a non-recourse basis), (v)
deferred payments for assets or services acquired where the deferred payment is
arranged primarily as a method of raising finance or financing the acquisition
of the asset or services acquired (excluding credit granted in the ordinary
course of trading for a period not exceeding 120 days (or in the case of Greece,
Spain and Italy, not exceeding 180 days) and deferred consideration payments in
respect of acquisitions or investments permitted in accordance with clause
12.2(f)), (vi) the capital element of Finance Leases and hire purchase
contracts, (vii) (except for the purposes of the definition of "Consolidated
Gross Borrowings" and clause 14.1(f)) Derivatives Contracts (viii) any other
transaction (including without limitation forward sale or purchase agreements
where the deferred payment is arranged primarily as a method of raising finance
or financing the acquisition of the asset or services acquired) having the
commercial effect of a borrowing or raising of money or of any of (ii) to (vii)
above and (ix) guarantees in respect of Indebtedness of any person falling
within any of (i) to (viii) above;
"Borrower" means each of the Parent, the Original Borrowers and the
Additional Borrowers and/or the Swingline Borrower and/or the Overdraft
Borrowers, as the context requires;
"Borrower Accession Agreement" means a borrower accession agreement in the
form of part A of schedule 8;
"Capital Expenditure" means expenditure treated as capital expenditure
pursuant to the Original Accounting Principles;
"Code" means the United States Internal Revenue Code of 1986 as amended
from time to time, and the regulations promulgated and rulings issued
thereunder;
"Collateral Instruments" means notes, bills of exchange, certificates of
deposit and other negotiable and non-negotiable instruments, guarantees, and any
other documents or instruments which contain or evidence an obligation (with or
without security) to pay, discharge or be responsible directly or indirectly for
any Indebtedness or liabilities of any Borrower or any other person liable and
includes Encumbrances;
"Commitment" means, in relation to a Bank and in respect of either
Revolving Credit Facility, at any relevant time the amount set opposite its name
in relation to the relevant Revolving Credit Facility in schedule 2 and/or, in
the case of a Substitute, the amount novated in relation to the relevant
Revolving Credit Facility as specified in the relevant Substitution Certificate,
as reduced, in each case, by any relevant term of this Agreement and so that, if
at such time the Total Commitments have been reduced to zero, references to a
Bank's Commitment shall be construed as a reference to that Bank's Commitment
immediately prior to such reduction to zero and, in relation to the Swingline
Bank and the Overdraft Bank, their obligations to make available the Swingline
Facility or the Overdraft Facility respectively;
"Compliance Certificate" means a certificate substantially in the form set
out in schedule 10 as to the compliance or otherwise with the financial
covenants set out in clause 13.1 issued by an Authorised Officer;
"Computer System" means each item of information technology equipment and
software programme (including, without limitation, software and embedded chips)
used in the course of the relevant member of the Group's business;
"Consolidated Gross Borrowings" means the aggregate principal or capital
amount of all Borrowed Money incurred by the Group (including any fixed or
minimum premium payable on final repayment) plus the aggregate principal element
of Borrowed Money secured by any Encumbrance over all or any part of the
undertaking, property, assets, rights or revenues of any member of the Group
except that:
(i) moneys owing by one member of the Group to another member of the Group
shall not be taken into account;
(ii) guarantees falling under paragraphs (d), (e), (f), (g), (h), (i), (j),
(k) and (l) of the definition of Permitted Guarantees shall not be taken
into account and, to avoid double counting, no guarantee of a liability
which is already taken into account shall itself be taken into account;
(iii) no liability shall be taken into account more than once in any
computation;
(iv) Consolidated Gross Borrowings expressed in or calculated by reference
to a currency other than Sterling shall be converted into Sterling by
reference to the rate of exchange used by the Parent for the
conversion of such currency in accordance with the management policy
of converting such amounts on a daily basis or, if the relevant
currency was not thereby involved, by reference to the rate of
exchange or approximate rate of exchange ruling on such date and
determined on such basis as the Agent may determine or approve;
(v) the principal amount of Consolidated Gross Borrowings deemed to be
outstanding in relation to Finance Leases or hire purchase agreements
shall be the present value of the minimum lease or hire payments
discounted at the interest rate implicit in the relevant lease or hire
purchase agreement;
(vi) the Indebtedness of members of the Group to the ITVA secured by fixed
charges over receivables of the Group in the United Kingdom shall not be
taken into account;
(vii) Indebtedness in respect of cash collateralised guarantees issued by a
Bank or any of its associates on behalf of the Group to media authorities
shall not be taken into account;
(viii) Indebtedness of the Group in respect of the guarantees issued by banks on
behalf of the Group to media authorities in Korea shall not be taken into
account; and
(ix) the Zenith Guarantee shall not be taken into account;
"Consolidated Gross Interest Expenditure" means, in respect of a period,
the aggregate amount (calculated on a consolidated basis) of all continuing,
regular or periodic costs, charges and expenses paid or payable during that
period in respect of Consolidated Gross Borrowings, including:
(a) any acceptance commission paid or payable in respect of any bills of
exchange or other negotiable instruments;
(b) any initial issue discount allowed on the issue of debentures (to the
extent relating to that period when amortised over the term of such
debentures); and
(c) the interest component of rentals under Finance Leases,
but excluding:
(i) arrangement and other one-off fees (to the extent relating to that
period when amortised over the term of the relevant Consolidated Gross
Borrowing);
(ii) amounts discounted for FRS12 or SSAP24 purposes to the extent they are
non-cash items; and
(iii) the arrangement fees relating to the Existing Facility;
"Consolidated Net Interest Expenditure" means, in respect of a period, the
Consolidated Gross Interest Expenditure accrued for that period net of credit
interest accrued by the Group during such period;
"Contribution" means, in relation to a Bank, (i) the principal amount of
the Revolving Credit Advances and the Conversion Advance owing to such Bank at
any relevant time (or, if the context requires, the Dollar Amount of such
Revolving Credit Advances and the Conversion Advance) and (ii) the principal
amount paid by such Bank under the indemnities contained in clauses 6 and 7 for
which it has not been reimbursed at any relevant time by the relevant Borrower;
"Conversion Advance" has the meaning given to it in clause 4.7;
"D" means Diamond Ad Ltd;
"D Acquisition" means the proposed acquisition of D, a company incorporated
in the Republic of Korea pursuant to the D Acquisition Agreement;
"D Acquisition Agreement" means the sale and purchase agreement relating to
the acquisition of the D Group;
"D Due Diligence" means the KPMG report dated 30 September, 1999 addressed
to the Parent together with any supplemental papers presented to the Arrangers
by the Parent, in each case in the agreed form;
"D Group" means D and its Subsidiaries as at the date of the D Due
Diligence;
"Dangerous Substance" means any radioactive emissions, noise and any
natural or artificial substance (in whatever form) the generation,
transportation, storage, treatment, use or disposal of which (whether alone or
in combination with any other substance) gives rise to a risk 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;
"Default" means any Event of Default or any event or circumstance which
would, upon the giving of a notice by the Agent and/or the expiry of the
relevant period and/or the fulfilment of any other condition (in each case as
specified in clause 14.1), constitute an Event of Default;
"Derivatives Contract" means a contract, agreement or transaction which is:
(i) a rate swap, basis swap, commodity swap, forward rate transaction,
commodity option, equity (or equity or other index) swap or option,
bond option, interest rate option, foreign exchange transaction, cap,
collar or floor, currency swap, currency option or any other similar
transaction; and/or
(ii) any combination of such transactions,
in each case, whether on-exchange or otherwise;
"Dollar Amount" means (a) in relation to an Advance to be drawn down in
Dollars, or a Swingline Advance, the amount in Dollars so drawn down or, in
relation to a Swingline Letter of Credit, the amount of the Outstanding L/C
Liability of such Swingline Letter of Credit issued, and (b) in relation to an
Advance to be drawn down in an Optional Currency, the amount in Dollars which
was or would be required to purchase the principal amount of that Advance in the
Optional Currency and in the amount specified in the relevant Drawdown Notice as
determined in accordance with clause 4.2, in each case as reduced by any
repayment or prepayment under this Agreement;
"Dollars" and "$" mean the lawful currency of the United States of America
and in respect of all payments to be made under this Agreement in Dollars mean
funds which are for same day settlement in the New York Clearing House Interbank
Payments System (or such other U.S. dollar funds as may at the relevant time be
customary for the settlement of international banking transactions denominated
in U.S. dollars);
"Drawdown Date" means the date, being a Banking Day falling within the
Availability Period of the relevant Facility, on which an Advance is or is to be
drawn down;
"Drawdown Notice" means a notice in the form or substantially in the form
of part A of schedule 3, duly completed with particulars of the relevant
Advance;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust arrangement
for the purpose of providing security or other security interest of any kind
securing any obligation of any person or any other arrangement having the effect
of conferring rights of set-off and includes any agreement to create any of the
foregoing;
"Environment" means all, or any of, the air (including, without limitation,
the air within buildings and the air within other natural or man-made structures
above or below ground), water (including, without limitation, ground and surface
water) and land (including, without limitation, buildings, surface and
sub-surface soil);
"Environmental Claim" means any claim by any person:
(a) in respect of any loss or liability suffered or incurred by that
person as a result of or in connection with any violation of
Environmental Law; or
(b) that arises as a result of or in connection with Environmental
Contamination and that could give rise to any remedy or penalty
(whether interim or final) that may be enforced or assessed by private
or public legal action or administrative order or proceedings;
"Environmental Contamination" means each of the following and their
consequences:
(a) any release, discharge, emission, leakage or spillage of any Dangerous
Substance at or from any site owned, occupied or used by any member of
the Group into any part of the Environment; or
(b) any accident, fire, explosion or sudden event at any site owned,
occupied or used by any member of the Group which is directly or
indirectly caused by or attributable to any Dangerous Substance; or
(c) any other pollution of the Environment at or from any site owned,
occupied or used by any member of the Group;
"Environmental Law" means all laws (including, without limitation, common
law), regulations, directives, codes of practice, circulars, guidance notices
and the like having legal effect concerning the protection of human health, the
Environment, the conditions of the work place or the generation, transportation,
storage, treatment or disposal of Dangerous Substances and in the case of codes
of practice, circulars, guidance notices and the like with which it is customary
for persons carrying on a similar business to the Group to comply with;
"Environmental Licence" means any authorisation required by any
Environmental Law;
"Equity share capital" has the meaning given to it in Section 744 of the
Companies Act 1985;
"ERISA" means the Employee Retirement Income Security Act of 1974 of the
United States of America, as amended from time to time, and the regulations
promulgated and rulings issued thereunder;
"ERISA Affiliate" means any corporation or trade or business which for
purposes of Title IV of ERISA is a member of the same controlled group as any
member of the Group, or is under common control with any member of the Group,
within the meaning of Section 414(b) or (c) of the Code and the regulations
promulgated and rulings issued thereunder;
"ERISA Event" means (i)(A) any reportable event, as defined in Section
4043(c) of ERISA and the regulations issued thereunder, with respect to a Plan,
as to which PBGC has not by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within thirty days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section 412 of
the Code or Section 302 of ERISA shall be a reportable event for the purposes of
this paragraph regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); or (B) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of such Section) are
met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or
(13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days; (ii) the filing of a notice of intent to
terminate under Section 4041(a)(2) of ERISA in a distress termination under
Section 4041(c) of ERISA; (iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; and (iv) an engagement in a non-exempt prohibited
transaction within the meaning of Section 4975 of the Code or Section 406 of
ERISA, which upon the occurrence of any of the events described in paragraphs
(i) to (iv) (inclusive) above would reasonably be expected to result in a
material liability of any member of the Group or any ERISA Affiliate;
"euro" means the single currency of Participating Member States of the
European Union;
"Event of Default" means any of the events or circumstances described in
clause 14.1;
"Existing Facilities" means the loan facilities governed by an agreement
dated 30 September 1997 (as amended and restated) and made between the Parent
(1), the companies identified as such in part 1 of the first schedule thereto as
original borrowers (2), The Bank of New York and HSBC Bank PLC as arrangers (3),
the banks and financial institutions named in the second schedule thereto(4),
HSBC Investments Bank plc as agent and security trustee (5), The Bank of New
York as swingline Bank (6), HSBC Bank plc as overdraft bank (7), HSBC Bank plc
as issuing bank (8) and HSBC Bank plc (9);
"Expiry Date" means, in relation to a Swingline Letter of Credit, the date
expressed by the terms of such Swingline Letter of Credit to be the date upon
which such Swingline Letter of Credit expires;
"External Refinancing" means the borrowing or raising of Borrowed Money
(including, without limitation, any public or private issue of debt securities)
by any member of the Group with a view, inter alia, to repaying and cancelling
Facility B;
"Facilities" means Facility A, Facility B, the Swingline Facility and the
Overdraft Facility;
"Facility A" means the revolving credit facility granted by the Banks in
accordance with clause 2.1(a);
"Facility A Advance" means (i) each borrowing of a portion of the
Commitments under Facility A by a Borrower or (ii) (as the context may require)
the principal amount of such borrowing for the time being outstanding;
"Facility A Amount" means $125,000,000 reduced by (i) the Swingline
Minimum, (ii) the Facility A Decrease, (iii) the Overdraft Facility Amount, as
further reduced by any relevant provision of this Agreement;
"Facility A Availability Period" means the period from the date of
this Agreement and ending on the date which falls 60 months after the date of
this Agreement or on such earlier date (if any) on which the Swingline Facility
and the Overdraft Facility are all reduced to zero and the Total Commitments in
respect of Facility A are all reduced to zero under or pursuant to this
Agreement;
"Facility A Decrease" means the amount by which the total of all Swingline
Advances outstanding or to be made on a particular day together with the
Outstanding L/C Liability in respect of all Swingline Letters of Credit
outstanding or to be issued on a particular day exceeds the Swingline Minimum;
"Facility B" means the revolving credit facility granted by the banks in
accordance with clause 2.1(b) with a conversion option;
"Facility B Advance" means (i) each borrowing of a portion of the
Commitments under Facility B by a Borrower or (ii) (as the context may require)
the principal amount of such borrowing for the time being outstanding and, for
the avoidance of doubt, includes the borrowing of, or the principal amount of,
the Conversion Advance;
"Facility B Amount" means $125,000,000 as reduced by any relevant provision
of this Agreement;
"Facility B Availability Period" means the period from the date of this
Agreement and ending on the date which falls 364 days after the date of this
Agreement or on such earlier date (if any) on which the Total Commitments in
respect of Facility B are reduced to zero under or pursuant to this Agreement;
"Federal Funds Rate" means, in relation to a Swingline Advance and a day in
a Swingline Term relating thereto or in relation to an unpaid sum in respect of
a Swingline Advance and a day on which any sum remains outstanding, the rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the United States Federal Reserve System arranged
by Federal funds brokers, as published for that day (or if such a day is not a
New York Banking Day, for the immediately preceding New York Banking Day) by the
Federal Reserve Bank of New York or, if such a rate is not so published for any
day which is a New York Banking Day, the average of the quotations for that day
for such transactions received by the Swingline Bank from three Federal funds
brokers of recognised standing selected by the Swingline Bank in consultation
with the Borrowers;
"Finance Lease" means a lease treated as a finance lease pursuant to
applicable accounting standards at the date of this Agreement (including
Statement of Standard Accounting Practice 21);
"Finance Parties" means the Agent, the Arrangers, the Banks, the Swingline
Bank, the Overdraft Bank and the Security Trustee;
"First Drawdown Date" means the Banking Day on which the first Advances
are, or are to be, drawn down;
"Fiscal Half-Year" means, in respect of each Fiscal Year, each of the
periods (each comprising six successive months) ending on or about 30 June and
31 December;
"Fiscal Quarter" means each fiscal period for the Group of three successive
months beginning on the day after a Quarter Day and ending on the following
Quarter Day;
"Fiscal Year" means each fiscal period for the Group beginning on 1st
January and ending on 31 December in that year;
"Flotation" means the inclusion of any part of the share capital of any
member of the Group other than the Parent in the Official List of the London
Stock Exchange or the grant of permission to deal in the same in the Alternative
Investment Market or the European Association of Dealers Automated Quotation or
on any other recognised investment exchange (as that term is used in the
Financial Services Act 1986) or in or on any other exchange or recognised market
replacing any of the same or on any other exchange or recognised market in any
country;
"Funders" means the Banks, the Swingline Bank and the Overdraft Bank;
"Group" means the Parent and its Subsidiaries from time to time and "member
of the Group" means any one of them;
"Group Structure Book" means the book, in the agreed form, which sets out
the structure of the Group;
"Guarantee" means a guarantee entered into or to be entered into in favour
of the Security Trustee in the agreed form or in a form acceptable to the Agent
(acting reasonably) (and "Guarantees" shall be construed accordingly);
"Guarantors" means the Original Guarantors together with any other member
of the Group which has entered into a Guarantee;
"Hedging Strategy" means the strategy for interest rate protection
arrangements and foreign exchange protection arrangements set out in the Hedging
Strategy Letter;
"Hedging Strategy Letter" means the agreed form letter from the Parent to
the Agent relating to hedging;
"Holding Company" means, in relation to a person, an entity of which that
person is a Subsidiary;
"Indebtedness" means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent;
"Information Memorandum" means each version of the Information Memorandum
to be distributed by the Arrangers at the request of the Parent in connection
with this Agreement, the outline being in the agreed form;
"Intellectual Property Rights" means any patent, trade mark, service mark,
registered design, trade name or copyright required to carry on the business of
members of the Group;
"Interest Payment Date" means the last day of an Interest Period;
"Interest Period" means each period for the calculation of interest in
respect of the Conversion Advance ascertained in accordance with this Agreement;
"L/C Application" means a request from the Swingline Borrower to open a
Swingline Letter of Credit, such notice to be in the form or substantially in
the form of part B of schedule 3;
"L/C Exposure" means, in respect of any Bank and each outstanding Swingline
Letter of Credit at any time, the amount of the proportion of the Outstanding
L/C Liability under such Swingline Letter of Credit which such Bank's Commitment
bears to the Total Commitments;
"L/C Issue Date" means the date, being a Banking Day falling within the
Availability Period, when a Swingline Letter of Credit is or is to be issued;
"LIBOR" means, in relation to a particular period, the arithmetic mean
(rounded upwards, if necessary, to five decimal places) of the London interbank
offered rates for deposits of the currency in question for a period equal to
such period at or about 11 a.m. on the Quotation Date for such period as
displayed on page 3750 of the Telerate Service (or such other page as may
replace Telerate Service page 3750 for the purpose of displaying London
interbank offered rates of leading banks for deposits of that currency) or, if
on such date the offered rates for the relevant period of fewer than two leading
banks are so displayed, as quoted to the Agent by each of the Reference Banks at
the request of the Agent;
"London Stock Exchange" means London Stock Exchange Limited;
"Majority Banks" means, at any relevant time, Banks (a) the aggregate of
whose Contributions in respect of Revolving Credit Advances and the Conversion
Advance exceeds 662/3 per cent of the Revolving Credit Advances and the
Conversion Advance or (b) (if neither Conversion Advance nor any Revolving
Credit Advances are outstanding under this Agreement) the aggregate of whose
Commitments exceeds 662/3 per cent of the Total Commitments;
"Margin" shall be calculated in accordance with clause 5.1;
"Material Adverse Effect" means a material adverse effect on the ability of
the Obligors (taken as a whole) or the Parent to perform their or its respective
obligations under this Agreement or on the financial position of the Group taken
as a whole;
"Material Subsidiary" means any Subsidiary of the Parent whose aggregate
annual revenues or attributable annual revenues are in excess of an amount equal
to 5 per cent. of the consolidated revenues of the Group, in each case as shown
by the most recent audited financial statements of such Subsidiary and the Group
(respectively);
"Media Services Agreement" means a media services agreement dated 11
December, 1997 between the Parent (1) and Zenith (2);
"month" or "months" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically corresponding
to the day of the calendar month in which it started, provided that (i) if the
period started on the last Banking Day in a calendar month or if there is no
such numerically corresponding day, it shall end on the last Banking Day in such
later calendar month and (ii) if such numerically corresponding day is not a
Banking Day, the period shall end on the next following Banking Day in such
later calendar month but if there is no such Banking Day it shall end on the
preceding Banking Day and "monthly" shall be construed accordingly;
"M.O.U." means the Memorandum of Understanding between Hyundai Merchant
Marine Co. Limited and Mr. Mong Hun Chang, as sellers, and the Parent relating
to the D Acquisition;
"Multiemployer Plan" shall have the meaning set out in section 4001(a)(3)
of ERISA;
"National Currency Unit" means, in relation to a Participating Member
State, the national currency unit of that Participating Member State;
"Net Derivatives Liability" means, at any time, the net liability (if any)
at such time of the members of the Group taken as a whole in respect of
Derivatives Contracts determined by reference to the amounts (as determined by
the Agent) which would be payable or receivable by the members of the Group
pursuant to the terms of such Derivatives Contracts if such Derivatives
Contracts were terminated at such time;
"New York Banking Day" means a day (other than Saturday or Sunday) on which
banks are open for business in New York City;
"Obligors" means the Borrowers and the Guarantors and "Obligor" means any
one of them;
"Optional Currency" means any currency, other than Dollars, which is freely
transferable, freely convertible into Dollars and dealt in on the London
Interbank Market or the London foreign exchange market;
"Original Accounting Principles" means those accounting principles,
standards and practices which were used in the preparation of the accounts of
the Parent for the financial year ended 31 December 1998 and, to the extent that
they do not conflict with those principles, standards and practices, such other
accounting principles, standards and practices as were generally acceptable in
the United Kingdom on the date of such accounts;
"Original Borrowers" means those companies listed as such in part A of
schedule 1;
"Original Guarantors" means those companies listed as such in part B of
schedule 1;
"Outstanding L/C Liability" means, in relation to a Swingline Letter of
Credit issued or to be issued at any time, the maximum aggregate amount of the
liability of the Swingline Bank under such Swingline Letter of Credit at such
time;
"Overdraft Bank" means HSBC Bank plc of 27-32 Poultry, London EC2P 2BX and
its successors in title;
"Overdraft Borrower Accession Agreement" means an accession agreement in
the form of part B of schedule 8;
"Overdraft Borrowers" means each of the Parent, Bates UK Limited, Bates
Overseas Holdings Limited, XMSS Limited, Swot Plus Limited, Cordiant Group
Limited, Cordiant Property Holdings Limited, ICM International Limited, Bates
Communications Limited, Bates Europe Limited, The Decision Shop Limited,
Euromedia Express Limited, 141 Blue Skies Limited, Atlas Advertising Limited,
Bates Advertising USA Inc. and the Additional Overdraft Borrowers;
"Overdraft Facility" means an overdraft facility of up to (pound)4,000,000
made available to the Overdraft Borrowers by the Overdraft Bank pursuant to
clause 2.1(d);
"Overdraft Facility Amount" means, at any time, the Dollar equivalent of
(pound) 4,000,000 as reduced by any relevant provision of this Agreement;
"Parent" means Cordiant Communications Group plc (Company number 1320869),
whose registered office is at 121-141 Westbourne Terrace, London W2 6JR;
"Participating Member State" means a member state of the European Union
that has adopted or adopts the single currency in accordance with the Treaty;
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA;
"PBIT" means, in respect of a period, the consolidated profit on ordinary
activities of the Group for that period before interest and taxes (including (to
the extent not already included and so long as the Parent holds 50 per cent. of
the equity share capital of Zenith) that portion of the profit or ordinary
activities before interest and taxes of Zenith which is attributable to the
Parent's shareholding in Zenith but excluding profits or losses on disposals of
Restricted Assets) as shown in the audited consolidated profit and loss account
provided to the Agent under clause 12.1(e) (or, as the case may be, in the
unaudited Quarterly Management Accounts for the relevant Quarter provided to the
Agent under clause 12.1(f)), provided however that new provisions in respect of
surplus property shall be excluded;
"Permitted Acquisitions" means those acquisitions set out in schedule 12;
"Permitted Encumbrances" means:
(a) any Encumbrance created pursuant to the terms of this Agreement and/or
the Security Documents;
(b) any right of set-off arising by operation of law in the ordinary
course of trading;
(c) any Encumbrance created in favour of a bank in connection with any
bona fide cash management and/or netting arrangements for the Group;
(d) any lien arising with respect to Taxes of the Group;
(e) any Encumbrance which the Agent (acting on the instructions of the
Majority Banks) has at any time in writing agreed shall be a Permitted
Encumbrance;
(f) the Encumbrances listed in schedule 7 securing the amount set opposite
the relevant Encumbrance in schedule 7, but not any increase in such
amount;
(g) any Encumbrance given by a member of the Group in connection with bona
fide arrangements for the maintenance of media accreditation of any
member of the Group provided that such members of the Group purchase
media only in accordance with normal industry practice;
(h) until repayment of the Existing Facilities, any Encumbrance which
secures the Existing Facilities;
(i) any Encumbrance granted by one member of the Group to another other
than by an Obligor to a member of the Group which is not an Obligor;
(j) any Encumbrance on assets acquired after the date of this Agreement or
on assets of a company which becomes a Subsidiary after the date of
this Agreement (which Encumbrances were in existence at the date of
acquisition or such company becoming a Subsidiary, but were not
created in contemplation thereof) but in each case only if the maximum
amount thereby permitted from time to time to be secured has not been
increased on account of, or since the date of, the acquisition of such
asset or the date on which such company becomes a Subsidiary and
provided that the same is discharged in full within 6 months of the
date of the relevant acquisition or such company becoming a
Subsidiary;
(k) any Encumbrance (a "New Encumbrance") created by any member of the
Group in substitution for any Encumbrance referred to in paragraph (f)
above (an "Existing Encumbrance") provided that (i) such Existing
Encumbrance is irrevocably and unconditionally discharged no later
than the time of creation of the New Encumbrance, (ii) the New
Encumbrance relates only to the same assets as the Existing
Encumbrance and (iii) the Indebtedness secured by the New Encumbrance
does not exceed the Indebtedness secured by the Existing Encumbrance;
(l) any Encumbrance created in favour of a plaintiff or a defendant in any
action, or the court or tribunal before which such action is brought,
as security for costs for expenses where any member of the Group is
prosecuting or defending such action in the bona fide interest of such
member and/or any other member of the Group provided that the total
amount secured does not exceed (pound) 500,000;
(m) the trust established in accordance with the terms of the letters
dated 21st August 1997 to beneficiaries of the support agreement dated
1st October 1987 and made between the Parent (1) and Ted Bates
Worldwide Inc. (2);
(n) liens arising by operation of law or by way of contract in the
ordinary course of business to the extent that the same would
otherwise arise by operation of law;
(o) any Encumbrance constituted by a Finance Lease permitted under clause
12.2(b);
(p) any pledge of documents as security for the liabilities of a member of
the Group in respect of a documentary credit facility taken out in the
ordinary course of business; and
(q) any retention of title to goods supplied to any member of the Group
where that retention is required by the supplier in the ordinary
course of its trading activities and on customary terms;
(r) Encumbrances existing as at the date of this Agreement provided by the
Waterloo Group securing in aggregate a maximum of(pound)7,500,000;
(s) any Encumbrance over any rent deposits as security for rental payments
to be made by any member of the Group under or pursuant to any lease
of premises used for its business; and
(t) any Encumbrance not otherwise permitted pursuant to paragraphs (a) to
(s) above (inclusive) and securing Indebtedness in aggregate not
exceeding (pound) 3,000,000;
"Permitted Guarantees" means:
(a) any guarantee which the Agent (acting on the instructions of the
Majority Banks) has at any time in writing agreed shall be a Permitted
Guarantee;
(b) any guarantee given by a member of the Group of the obligations of
another member of the Group;
(c) any guarantee given by any member of the Group listed in schedule 9
guaranteeing the amount set opposite the relevant guarantee in
schedule 9, but not any increase in such amount;
(d) until repayment of the Existing Facilities, any guarantee given by any
member of the Group in connection with the Existing Facilities;
(e) any guarantee given by a company which becomes a Subsidiary after the
date of this Agreement (which guarantee was in existence at the date
such company becomes a Subsidiary and was not created in contemplation
thereof) but only if the maximum amount guaranteed has not been
increased on account of or since the date on which such company
becomes a Subsidiary and provided that the same is discharged within 6
months of the relevant company becoming a Subsidiary;
(f) any guarantee given by a company in the Group in favour of a bank in
connection with any bona fide cash management and/or netting
arrangements for the Group;
(g) any guarantee given by a member of the Group in connection with bona
fide arrangements for the maintenance of media accreditation of any
member of the Group provided that such members of the Group purchase
media only in accordance with normal industry practice;
(h) any indemnity given by a member of the Group required by a bank as
part of its normal terms and conditions for transacting business
indemnifying such bank against costs and losses it may sustain as a
consequence of accepting telephone or facsimile instructions from such
member of the Group;
(i) any counter indemnity given by any member of the Group in connection
with a Bid Bond;
(j) the indemnity given by the Parent to Saatchi & Saatchi Holdings
Limited in clause 6.2 of the Zenith Shareholders' Agreement in its
original form;
(k) the indemnities given by the Parent to Zenith pursuant to clauses
4.2.4 and 5.8 of the Media Services Agreement in its original form;
(l) the indemnity given to the representatives of the banks under the
Existing Facilities; and
(m) the Zenith Guarantee.
"Permitted Restricted Asset Disposal" means a disposal of a Restricted
Asset which is permitted pursuant to clause 12.2(d)(i);
"Plan" means an employee pension benefit plan as defined in section 3(2) of
ERISA established or maintained by any member of the Group or any ERISA
Affiliate and which is covered by Title IV of ERISA other than a Multiemployer
Plan;
"Property Payments" means the aggregate amount of (i) the payments made by
a member of the Group pursuant to leases of unoccupied land or buildings of
which such member of the Group is a lessor and (ii) the amount by which payments
under a lease of land or buildings of which a member of the Group is a lessee
exceeds the amount of rental received by such member of the Group in respect of
such land or buildings from any other person to the extent that such amount is
not included in PBIT;
"Qualifying Bank" means:
(a) a person to which payments shall be payable under this Agreement by a
Borrower which is resident in the United Kingdom for the purposes of
taxation at the date such payment shall be due, being:
(i) a "bank" within the meaning of section 840A Income and
Corporation Taxes Act 1988;
(ii) which is beneficially entitled to any interest payable to it
under this Agreement; and
(iii) which is within the charge to corporation tax as respects such
interest;
but so that if either section 840A or section 349(3)(a) of such Act is
amended or repealed, this paragraph (a) shall be amended in such
manner as the Agent, after consultation with the Parent, shall
reasonably determine in order to include within the definition of
"Qualifying Bank" under this paragraph (a) persons whose circumstances
correspond (as far as appropriate in the light of the changed
provisions) to those of a "Qualifying Bank" as defined in this
paragraph (a) and which are in consequence able to receive interest
payable to them under this Agreement without deduction of or on
account of United Kingdom tax; or
(b) a person, to which payments shall be payable under this Agreement by a
Borrower which is not resident in the United Kingdom for the purposes
of taxation at the date such payments shall be due and which, by
virtue of the provisions of section 118G of the Income and Corporation
Taxes Act 1988, and subject only to the making of a declaration by
that person or by such Borrower under paragraph 4 of the Income Tax
(Paying and Collecting Agents) Regulations 1996 without the Borrower
incurring any additional expense or suffering any significant
additional administrative burden, is eligible to have such payments
made to it without any withholding or deduction in respect of United
Kingdom Taxes, being either:
(i) a person which, under section 118G(4)(a) of the Income and
Corporation Taxes Act 1988, is
(A) beneficially entitled to any relevant payment payable
to it by such a Borrower under this Agreement; and
(B) at the date such relevant payment is paid to it is not
resident in the United Kingdom and is beneficially
entitled to an interest under this Agreement which
entitles it to receive such payment; or
(ii) a person which, under section 118G(4)(b) of the Income and
Corporation Taxes Act 1988, is:
(A) a "bank" within the meaning of section 840A Income and
Corporation Taxes Act 1988;
(B) which is beneficially entitled to any interest payable
to it by such a Borrower under this Agreement; and
(C) which at the date such interest is paid to it is
resident in the United Kingdom and is beneficially
entitled to an interest under this Agreement which
entitles it to receive such interest
but so that, if section 118(G)(4)(a) of the Income and
Corporation Taxes Act 1988 in the case of paragraph (b)(i)
above or if either section 840A or section 118G(4)(b) of
such Act in the case of paragraph (b)(ii) above is amended
or repealed, paragraph (b)(i) and/or (b)(ii) above, as
appropriate, shall be amended in such manner as the Agent,
after consultation with the Parent, shall reasonably
determine to be necessary in order to define a person whose
circumstances most closely correspond to a person as defined
in the relevant paragraph; or
(c) In the event that the Parent and the Agent (acting reasonably) agree
that interest paid under this Agreement by a UK Borrower to a Bank
which is not a Qualifying Bank by virtue of paragraph (a) of the
definition of Qualifying Bank, is not treated as a distribution for UK
Tax purposes, a person, being a bank or financial institution (whether
incorporated in the United Kingdom or elsewhere), which, by virtue of
the provisions of a double taxation agreement between the United
Kingdom and the country of residence of that person is, subject only
to a prior direction given to a Borrower which is resident in the
United Kingdom by the United Kingdom Inland Revenue pursuant to an
application by that person without such Borrower incurring any
additional expense or suffering any significant additional
administrative burden, eligible to have payments made to it by such
Borrower under this Agreement (i) without any deduction or withholding
in respect of Taxes, or (ii) (in the case of a Substitute) subject to
a withholding or deduction in respect of Taxes to an extent no greater
than that which applied to the Bank from which such Substitute
acquired its Commitment and/or Contribution.
(d) a person to which payments shall be payable under this Agreement by a
US Borrower, being a bank or financial institution which:
(i) is created or organised under the laws of the United States of
America or of any state thereof or the District of Columbia and,
if such bank or financial institution is not a corporation, has
delivered to the Agent and each relevant US Borrower) within 30
days from the date on which it becomes a party to this Agreement,
two accurate and complete original copies of Internal Revenue
Service Form W-9 (or any applicable successor or additional form)
duly executed, to establish that such bank or financial
institution is entitled to receive payment of principal,
interest, fees or other amounts under this Agreement free of
backup withholding; or
(ii) is not created or organised under the laws of the United States
of America or any state thereof or the District of Columbia and
has delivered to the Agent and each relevant US Borrower within
30 days from the date on which it becomes a party to this
Agreement, two accurate and complete original copies of Internal
Revenue Service Form W-8BEN (with respect to a complete exemption
under an income tax treaty) or W-8EC1, or any applicable
successor or additional forms, duly executed by such bank or
financial institution, together with any other certificate or
statement of exemption required under the Code or the regulations
or pronouncements issued thereunder to establish that such bank
or financial institution is entitled to receive payment of
principal, interest, fees or other amounts under this Agreement
without any deduction or withholding of United States of America
federal income tax; or
"Quarter Days" means 31 March, 30 June, 30 September and 31 December in any
year;
"Quarterly Management Accounts" means the quarterly management accounts of
the Group to be delivered to the Agent pursuant to clause 12.1(f) in the agreed
form;
"Quotation Date" means, in relation to a Revolving Credit Term, an Interest
Period or other period for which LIBOR is to be determined, the date on which
quotations are provided by leading banks in the London Interbank Market for
deposits in the relevant currency for delivery on the first day of that
Revolving Credit Term, Interest Period, or other period;
"Reference Banks" means the principal London offices of HSBC Bank plc and
The Bank of New York and/or any other Bank appointed as such pursuant to clause
19.15 and their respective successors in title;
"Regulation D Costs" means, in relation to its participation in an Advance
made to a US Borrower (or deposits maintained by a Bank to fund that
participation), the amount (if any) certified by a Bank to be the cost to it of
complying with Regulation D of the Board of Governors of the Federal Reserve
System, or any successor (or any similar reserve requirements in respect of its
participation or those deposits);
"Repayment Date" means, subject to clause 10.3, in relation to the
Conversion Advance, the date on which it is scheduled to be repaid under this
Agreement and in relation to any other Advance, the last day of its Term;
"Restricted Assets" means the shares in any Subsidiary or a material part
of the business of any Subsidiary or any interest in Zenith or any interest in
freehold or leasehold property (and all buildings and fixtures thereon);
"Revolving Credit Advance" means a Facility A Advance or Facility B Advance
(other than the Conversion Advance);
"Revolving Credit Facilities" means Facility A and Facility B;
"Revolving Credit Term" means, in relation to a Revolving Credit Advance,
the period for which that Revolving Credit Advance is, or is to be, borrowed, as
specified in the Drawdown Notice for such Revolving Credit Advance;
"Security Documents" means the Guarantees, the Security Trust Deed and all
other documents from time to time entered into in favour of the Agent, the
Security Trustee and/or the Funders by way of guarantee or other assurance of
and/or security for amounts owed to any of the Beneficiaries (as defined in the
Security Trust Deed);
"Security Trust Deed" means a security trust deed in the agreed form and
made or to be made between the Parent (1), the Original Borrowers (2), the
Guarantors as set out therein (3), the Arrangers (4), the Banks (5), the
Swingline Bank (6), the Overdraft Bank (7), the Agent (8) and the Security
Trustee (9);
"Security Trustee" means HSBC Investment Bank plc and its successors in
title in its capacity as security trustee for the purposes of the Guarantees or
such other person as is appointed as security trustee pursuant to the Security
Trust Deed;
"Settlement Amount" means the amount payable by the Swingline Bank to the
beneficiary under a Swingline Letter of Credit;
"Settlement Date" means the date on which payment is due to the beneficiary
in respect of a Swingline Letter of Credit;
"Sterling" and "(pound)" mean the lawful currency for the time being of the
United Kingdom and in respect of all payments to be made under this Agreement in
Sterling mean immediately available, freely transferable cleared funds;
"Subsidiary" of a person means any company or entity directly or indirectly
controlled by such person, for which purpose "control" means either ownership of
more than 50 per cent of the voting share capital (or equivalent right of
ownership) of such company or entity or the right to control its policies and
management whether by contract or otherwise and for the purposes of clauses
11.1(i), 12.1 and 13.1 only a subsidiary undertaking within the meaning of
section 258 of the Companies Act 1985;
"Substitute" has the meaning given to it in clause 18.3;
"Substitution Certificate" means a certificate substantially in the terms
of schedule 6;
"Swingline Advance" means (i) each borrowing of a portion of the
Commitments under the Swingline Facility by the Swingline Borrower or (ii) (as
the context may require) the principal amount of such borrowing for the time
being outstanding;
"Swingline Bank" means The Bank of New York and its successors in title c/o
BNY Capital Markets Inc., One Wall Street - 18 North, New York, NY 10286;
"Swingline Borrower" means Bates US Holdings Inc.;
"Swingline Facility" means a swingline facility (including a letter of
credit facility) of up to $18,000,000 made available to the Swingline Borrower
by the Swingline Bank pursuant to clause 2.1(c);
"Swingline Facility Amount" means $18,000,000 as reduced by any relevant
provision of this Agreement;
"Swingline Letter of Credit" means a standby letter of credit denominated
in Dollars and issued in a form agreed between the Swingline Borrower and the
Swingline Bank pursuant to clause 6.6;
"Swingline Letter of Credit Commission" means the rate per annum calculated
in accordance with clause 6.9;
"Swingline Letter of Credit Facility Amount" means $4,000,000 as reduced by
any relevant provision of this Agreement;
"Swingline Minimum" means $5,000,000 as reduced by any relevant term of
this Agreement;
"Swingline Term" means, in relation to any Swingline Advance, the period
for which that Swingline Advance is, or is to be, borrowed, as specified in the
Drawdown Notice for such Swingline Advance;
"TARGET Day" means a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer system (TARGET) is operating;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and penalties
in respect thereof and "Taxation" shall be construed accordingly;
"Term" means a Revolving Credit Term or a Swingline Term, as the context
requires;
"Termination Date" means, in relation to a Revolving Credit Facility, the
last day of the Availability Period relating to that Revolving Credit Facility;
"Total Commitments" means in respect of a Facility or (as the context
requires) the Facilities at any relevant time the total of the Commitments of
all the Banks in respect of such Facility or Facilities at such time;
"Trade Sale" means a sale or other disposal of all or substantially all of
the assets and undertakings of a member of the Group to a person or persons who
is/are not a member of the Group;
"Treaty" means the Treaty establishing the European Economic Community
being the Treaty of Rome of 25 March 1957 as amended by the Single European Act
1986 and the Maastricht Treaty (which was signed on 7 February 1992 and came
into force on 1 November 1993) as amended, varied or supplemented from time to
time;
"UK Borrower" means a Borrower which is a company which is resident for
Taxation purposes in the United Kingdom;
"US Borrower" means a Borrower incorporated or organised under the laws of
any of the United States of America or the District of Columbia;
"Utilisation" means (i) each borrowing under the Overdraft Facility by the
Overdraft Borrowers or (ii) (as the context may require) the principal amount of
all such borrowings for the time being outstanding;
"Waterloo" means Healthworld Corporation Inc.;
"Waterloo Acquisition" means the acquisition described in paragraph 2 of
schedule 12;
"Waterloo Information Package" means the Parent board papers relating to
the Waterloo Acquisition together with any supplemental papers presented to the
Arrangers by the Parent, in each case, in the agreed form;
"Waterloo Group" means Waterloo and its Subsidiaries as at the date of the
Waterloo Information Package;
"Zenith" means Zenith Media Holdings Limited (registered no. 3423055);
"Zenith Group" means Zenith and its Subsidiaries from time to time;
"Zenith Guarantee" means the guarantee given by the Parent to HSBC
Investment Bank plc as Security Trustee in respect of the (pound)21,500,000
facility agreement dated 30 September 1997 and made between (inter alios) Zenith
Media Holdings Limited, HSBC Investment Bank plc as agent and security trustee
and the banks referred to therein; and
"Zenith Shareholders' Agreement" means the shareholders' agreement dated 11
December 1997 made between the Parent (1), Saatchi & Saatchi Holdings Limited
(2), Saatchi (3) and Zenith (4), entered into in relation to Zenith.
1.2 Headings
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.
1.3 Construction of certain terms
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as references
to the clauses of, and schedules to, this Agreement and references to
this Agreement include its schedules;
(b) references to (or to any specified provision of) this Agreement or any
other document shall be construed as references to this Agreement,
that provision or that document as in force for the time being and as
from time to time amended in accordance with its terms, or, as the
case may be, with the agreement of the relevant parties and (where
such consent is, by the terms of this Agreement or the relevant
document, required to be obtained as a condition to such amendment
being permitted) the prior written consent of the relevant parties;
(c) reference to a document or other papers "in the agreed form" means in
the form such document initialled by way of identification by the
Agent and the Parent or in the form included in a Schedule to this
Agreement;
(d) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law and to the extent applicable to any Bank, with
which banks customarily comply) of any agency, authority, central bank
or government department or any self-regulatory or other national or
supra-national authority;
(e) words importing the plural shall include the singular and vice versa;
(f) references to a time of day are to London time;
(g) references to a "person" shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any State or any of its agencies;
(h) references to "assets" include all or part of any business,
undertaking, real property, personal property, uncalled capital and
any rights (whether actual or contingent, present or future) to
receive, or require delivery of, any of the foregoing;
(i) references to a "guarantee" include references to an indemnity (in the
nature of a guarantee) or other assurance against financial loss
(including, without limitation, an obligation to purchase assets or
services) in each case as a consequence of a default by any other
person to pay any Indebtedness and "guaranteed" shall be construed
accordingly;
(j) references to the "equivalent" of an amount specified in a particular
currency (the "specified currency amount") shall be construed as a
reference to the amount of the other relevant currency which can be
purchased with the specified currency amount in the London foreign
exchange market at or about the relevant time on the day on which the
calculation falls to be made, for delivery on the relevant day, as
determined by the Agent; and
(k) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.
1.4 Majority Banks
Where this Agreement provides for any matter to be determined by reference
to the opinion of the Majority Banks or to be subject to the consent or request
of the Majority Banks or for any action to be taken on the instructions of the
Majority Banks, such opinion, consent, request or instructions shall (as between
the Banks) only be regarded as having been validly given or issued by the
Majority Banks if all the Banks shall have received prior notice of the matter
on which such opinion, consent, request or instructions are required to be
obtained and the relevant majority of Banks shall have given or issued such
opinion, consent, request or instructions but so that (as between each Borrower
and the Banks) each Borrower shall be entitled (and bound) to assume that such
notice shall have been duly received by each Bank and that the relevant majority
shall have been obtained to constitute Majority Banks whether or not this is in
fact the case.
1.5 Agent's opinion
(a) Where this Agreement provides for the Agent's opinion to determine
whether any matter would or is reasonably likely to have a Material
Adverse Effect or a material adverse effect, as the case may be, the
Agent shall act in accordance with the instructions of the Majority
Banks in making such determination.
(b) The Borrowers shall be entitled to assume that any such determination
by the Agent has been made in accordance with the provisions of clause
1.6(a).
2 The Facilities
2.1 Amount
Upon and subject to the terms of this Agreement and in reliance on each
of the representations and warranties in clause 11, for the purposes set out in
clause 1.1:
(a) the Banks agree to lend to the Borrowers the principal sum of up to
the Facility A Amount or its equivalent in Optional Currencies;
(b) the Banks agree to lend to the Borrowers the principal sum of up to
the Facility B Amount or its equivalent in Optional Currencies;
(c) the Swingline Bank agrees to lend to, and issue Swingline Letters of
Credit at the request of, the Swingline Borrower in the principal sum
of up to $18,000,000 (subject to the restriction, in the case of
Swingline Letters of Credit, of the Swingline Letter of Credit
Facility Amount); and
(d) the Overdraft Bank agrees to make available to the Overdraft Borrowers
the principal sum of up to (pound)4,000,000.
The obligation of each Bank under this Agreement shall be to contribute
that proportion of each Revolving Credit Advance (or the Conversion Advance)
which, as at the Drawdown Date of such Revolving Credit Advance (or the
Conversion Advance), its Commitment in respect of the relevant Revolving Credit
Facility bears to the Total Commitments in respect of the relevant Revolving
Credit Facility and, in the case of the Swingline Facility and the Overdraft
Facility, to assume its obligations under clause 6 and clause 7 respectively.
2.2 Obligations several
The obligations of each Bank under this Agreement are several; the failure
of any Bank to perform such obligations shall not relieve any Finance Party or
any Borrower of any of their respective obligations or liabilities under this
Agreement nor shall the Agent, the Security Trustee, the Swingline Bank, the
Overdraft Bank or any Arranger be responsible for the obligations of any Bank
(except for its own obligations, if any, as a Bank) nor shall any Bank be
responsible for the obligations of any other Bank under this Agreement.
2.3 Interests several
Without prejudice to the provisions of this Agreement relating to or
requiring action by the Majority Banks, the interests of the Finance Parties are
several and the amount due to the Agent or to the Security Trustee, (for its own
account), to the Swingline Bank, to the Overdraft Bank to each Arranger and to
each Bank is a separate and independent debt. Each Finance Party shall have the
right to protect and enforce its rights arising out of this Agreement (but
subject always to the terms of this Agreement) and it shall not be necessary for
any other Finance Party to be joined as an additional party in any proceedings
for this purpose.
2.4 Maximum outstandings
The aggregate of the Dollar Amount of all Facility A Advances, Swingline
Advances, Swingline Letters of Credit and Utilisations shall at no time exceed
the Total Commitments in respect of Facility A. The aggregate of the Dollar
Amount of all Facility B Advances shall at no time exceed the Total Commitments
in respect of Facility B (save where the Conversion Advance has been drawn).
3 Conditions
3.1 Documents and evidence required
(a) The obligation of each Bank to make its Commitments available, for the
Swingline Bank to make available the Swingline Facility or for the
Overdraft Bank to make available the Overdraft Facility shall be
subject to the condition that the Agent, or its duly authorised
representative, shall have received, not later than two Banking Days
before the day on which the Drawdown Notice or L/C Application in
respect of the first Advance or Swingline Letter of Credit is given
or, if the first drawing under the Facilities is a Utilisation, not
later than two Banking Days before the first Utilisation, the
documents and evidence specified in part A of schedule 4 in form and
substance satisfactory to it.
(b) In addition to clause 3.1(a) the obligation of each Bank to make its
Commitments available for the purposes of funding the purchase
consideration payable by Bates Deutschland Holdings GmbH for the D
Acquisition shall be subject to the further condition that the Agent,
or its duly authorised representative, shall have received not later
than two Banking Days before the day on which the Drawdown Notice is
given in respect of the first Advance which is to be used for such
purpose, the documents and evidence specified in part B of schedule 4
in form and substance satisfactory to it.
3.2 General conditions precedent
The obligation of each Bank to contribute to any Advance, of the Swingline
Bank to make available any Swingline Advance or Swingline Letter of Credit or of
the Overdraft Bank to make available any Utilisation is subject to the further
conditions that at the date of each Drawdown Notice or L/C Application and on
each Drawdown Date, Utilisation or L/C Issue Date:
(a) the representations and warranties set out in clause 11, other than
the excluded representations and warranties set out in clause 11.2
(and so that the representation and warranty in clause 11.1(i) shall
for this purpose refer to the most recent audited consolidated
financial statements delivered to the Agent under clause 12.1(e)) are
true and correct on and as of each such date as if each were made with
respect to the facts and circumstances existing at such date; and
(b) no Default shall have occurred and be continuing unremedied and
unwaived or would result from the making of such Advance, Utilisation
or Swingline Letter of Credit.
However, in the case of the drawing of (i) the Conversion Advance, and/or
(ii) a Revolving Credit Advance which would not, if drawn, cause the aggregate
Dollar Amount of the Revolving Credit Advances outstanding after such drawing to
exceed the aggregate Dollar Amount of the Revolving Credit Advances outstanding
under the Revolving Credit Facility concerned, prior to that drawing (after
taking account of any repayment made on or prior to the date of such drawing)
then, in either case:
(i) clause 3.2(a) shall apply only if the incorrectness would be
reasonably likely to have a Material Adverse Effect; and
(ii) clause 3.2(b) shall not apply provided that the Term of the relevant
Revolving Credit Advance which is to be drawn, or the Interest Periods
of the Conversion Advance, shall be one month or less.
Nothing in this clause 3.2 shall be construed as constituting a waiver of
any right of the Banks (including, without limitation, their rights under clause
14.2) arising from any Event of Default which shall have occurred and be
outstanding at the time of the drawing of the relevant Revolving Credit Advance.
3.3 Waiver of conditions precedent
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in part and
with or without conditions by the Agent acting on the instructions of the
Majority Banks, the Swingline Bank and the Overdraft Bank in respect of any
Advance, Swingline Letters of Credit or Utilisation respectively without
prejudicing the right of the Agent acting on such instructions to require
fulfilment of such conditions in whole or in part in respect of any other
Advance, Swingline Letter of Credit or Utilisation.
3.4 Notification
The Agent shall notify the Banks promptly after receipt by it of the
documents and evidence referred to in clause 3.1.
4 The Facilities; Currencies
4.1 Drawdown of Advances
Subject to the terms and conditions of this Agreement an Advance shall be
made available to the relevant Borrower:
(a) in the case of Revolving Credit Advances and the Conversion Advance
following receipt by the Agent (with a copy to the Swingline Bank)
from that Borrower of a Drawdown Notice:
(i) in the case of an Advance to be drawn in an Optional Currency
other than Sterling, not later than 10 a.m. on the third Banking
Day before the proposed Drawdown Date;
(ii) in the case of an Advance to be drawn in Dollars not later than 2
p.m. on the third Banking Day before the proposed Drawdown Date;
and
(iii)in the case of an Advance to be drawn in Sterling, not later
than 1 p.m. on the Banking Day before the proposed Drawdown Date;
and
(b) in the case of Swingline Advances, following receipt by the Swingline
Bank (with a copy to the Agent) from the Swingline Borrower of a
Drawdown Notice, not later than 2.00 p.m. (New York City time) on the
relevant Drawdown Date.
A Drawdown Notice shall be effective on actual receipt by the Agent or, as
the case may be, the Swingline Bank and, once given, shall, subject as provided
in clause 5.8 (a), be irrevocable.
4.2 Notification to Banks of Revolving Credit Advances and the Conversion
Advance
As soon as practicable after receipt of a Drawdown Notice in respect of a
Revolving Credit Advance or the Conversion Advance complying with the terms of
this Agreement the Agent shall notify each Bank and, subject to clause 3, each
of the Banks shall on the Drawdown Date make available to the Agent its portion
of the relevant Advance in accordance with clause 10.2. If an Advance is to be
drawn down in an Optional Currency the Banks shall advance to the relevant
Borrower on the drawdown of such Advance the amount of the Optional Currency
specified in the Drawdown Notice for that Advance. The Agent shall determine the
Dollar Amount of such Advance at the spot rate of exchange quoted to it for the
purchase of such Optional Currency with Dollars at or about the time of receipt
of the Drawdown Notice for such Advance.
4.3 Amount and Term of Revolving Credit Advances
Each Revolving Credit Advance shall be:
(a) of a Dollar Amount which is a minimum of $5,000,000 and (if the
Advance is to be drawn in Dollars) an integral multiple of $1,000,000
and shall be used for the purposes described in clause 1.1(a), in the
case of Facility A Advances, or clause 1.1(b) in the case of Facility
B Advances;
(b) denominated in one currency only;
(c) borrowed for a Revolving Credit Term of one, two, three or six months
or seven days or fourteen days ending on or before the Termination
Date in respect of the relevant Revolving Credit Facility, or such
other periods as the relevant Borrower and the Banks may agree; and
(d) for the purposes of assisting primary syndication of the Facilities,
the initial Revolving Credit Terms for the Revolving Credit Advances
shall be during the period until completion of such syndication or if
earlier the period ending 3 months after the First Drawdown Date, no
more than one month or such other period or periods as may be agreed
between the Parent and the Agent.
4.4 Amount and Term of Swingline Advances
(a) Each Swingline Advance shall be:
(i) of a Dollar Amount which is a minimum of $100,000 and an integral
multiple of $100,000; and
(ii) borrowed for a Swingline Term of one to five New York Banking
Days.
(b) The Swingline Borrower may not borrow, either by way of Swingline
Advances or by way of the issue of Swingline Letters of Credit, any
amount above the Swingline Minimum which, when aggregated with any
amount which is the subject of a Drawdown Notice for a Facility A
Advance or is outstanding under Facility A, would result in the Total
Commitments being exceeded.
4.5 Selection of currencies
Subject to the provisions of clause 4.6 if a Borrower so requests in the
Drawdown Notice for a Revolving Credit Advance, such Revolving Credit Advance
may be drawn down in an Optional Currency.
4.6 Limit on currencies; non-availability
A Revolving Credit Advance may not be drawn down in an Optional Currency if
(a) in consequence thereof there would be Revolving Credit Advances outstanding
in more than 4 different currencies or (b) any Bank notifies the Agent not later
than 3 p.m. on the third Banking Day before the proposed Drawdown Date (in the
case of Sterling, not later than 3 p.m. on the Banking Day before the proposed
Drawdown Date) that deposits of such Optional Currency are not readily available
to such Bank in an amount comparable with such Bank's portion of the relevant
Revolving Credit Advance or (c) the Agent determines (acting reasonably) after
consultation with the Reference Banks at any time prior to 10 a.m. (local time
in the place of payment) on the Drawdown Date that by reason of any change in
currency availability, currency exchange rates or exchange controls it is or
will be impracticable for the relevant Revolving Credit Advance to be drawn down
in that Optional Currency. Accordingly, in any such event, the relevant
Revolving Credit Advance shall be drawn down in Dollars.
4.7 Facility B conversion option
The Parent shall have the option ("the Conversion Option") on the last day
of the Facility B Availability Period to convert all or some of the Facility B
Total Commitments into a term loan facility and, subject to the terms of this
Agreement, to draw under Facility B a single term loan advance in one of
Dollars, Sterling or euros (the "Conversion Advance") on such date by delivery
to the Agent of a duly completed Drawdown Notice.
4.8 The Termination Dates
Without prejudice to any other provision of this Agreement, the Commitments
in respect of the relevant Revolving Credit Facility shall in any event be
reduced to zero on the Termination Date and no Revolving Credit Advances under
the Revolving Credit Facility concerned (and, in the case of Facility A, no
Swingline Advance, Swingline Letters of Credit or Utilisations) shall be made or
issued or allowed to the Borrowers under this Agreement thereafter.
4.9 Application of proceeds
Without prejudice to any Borrower's obligations under clause 12.1(c), none
of the Finance Parties shall have any responsibility for the application of the
proceeds of any Advance, Swingline Letter of Credit or Utilisation by any
Borrower.
4.10 Information
(a) At close of business in London on each Banking Day on which a Facility
A Advance is made, repaid or prepaid or a Drawdown Notice in respect
of a Facility A Advance is received, the Agent will confirm to the
Swingline Bank the amount outstanding at that time under Facility A or
which is the subject of a Drawdown Notice in respect of a Facility A
Advance and of any part of Facility A or Swingline Facility which has
been cancelled on such day.
(b) At close of business in New York on each New York Banking Day on which
a Swingline Advance is made, repaid or prepaid, a Swingline Letter of
Credit is issued or reduced in accordance with the terms of this
Agreement or a Drawdown Notice or L/C Application is received, the
Swingline Bank will confirm to the Agent the amount outstanding at
that time under the Swingline Facility in respect of Swingline
Advances and the aggregate outstanding L/C Liability in respect of all
Swingline Letters of Credit or which is the subject of an L/C
Application or a Drawdown Notice for a Swingline Advance;
(c) The Swingline Bank and the Overdraft Bank will, following a request by
the Agent, promptly inform the Agent of the amount outstanding under
the Swingline Facility or the Overdraft Facility (as the case may be).
(d) Neither the Agent nor the Swingline Bank shall have any liability to
any other party to this Agreement in respect of any matter arising
directly or indirectly as a result of its failure to comply with its
obligations under this clause 4.10 or for any Advance or Swingline
Letter of Credit being made or issued in breach of the limits set out
in this Agreement. In the event that any Advance is made or Swingline
Letter of Credit is issued in breach of any such limit the Parent
will, on demand by the Agent, forthwith procure that Advances are
prepaid in accordance with the terms of this Agreement and/or
Swingline Letters of Credit irrevocably cancelled so that any such
limit is no longer breached.
4.11 Refinancing of the Existing Facilities
The Parent undertakes to ensure that the Revolving Credit Advances which
are made to the Borrowers on the First Drawdown Date are in an aggregate amount
which is sufficient to repay the aggregate principal amount outstanding in
respect of the Existing Facilities together with all unpaid interest thereon and
any other amounts payable in relation thereto on such day. The Borrowers
irrevocably authorise the Agent, and the Agent agrees, to first apply the
proceeds of such Revolving Credit Advances in repayment of all amounts
outstanding in respect of the Existing Facilities and to pay any excess proceeds
to the Borrower concerned. The Borrowers acknowledge that such application by
the Agent shall constitute the making of the Revolving Credit Advances concerned
to the relevant Borrowers by the Banks.
5 Interest; alternative interest rates
5.1 Calculation of Margin
(a) Subject to clause 5.1(b), the Margin shall be 1.00 per cent. per
annum.
the Margin shall be adjusted in accordance with the table below
semi-annually and shall be the lowest Margin shown in column (2) for
which the ratio in column (1) is satisfied, such rate to take effect
for Advances drawn, Swingline Letters of Credit issued and
Utilisations made and for the purposes of clause 5.5, on or following,
the delivery to the Agent of the latest audited, or as the case may
be, unaudited (interims or preliminaries) consolidated financial
statements in respect of the relevant period pursuant to clause
12.1(e) and related Compliance Certificate;
(ii) the ratio of Consolidated Gross Borrowings to Adjusted PBIT set out in
column (1) below shall be calculated by reference to the relevant
Compliance Certificate and the relevant sets of latest audited, or as
the case may be, unaudited (interims or preliminaries) consolidated
financial statements delivered to the Agent pursuant to clause 12.1(e)
as referred to in paragraph (iii) below;
(iii)with effect from the delivery to the Agent pursuant to clause 12.1(e)
of unaudited (preliminaries) consolidated financial statements in
respect of the 12 months ending 31 December, 1999 and each audited or,
as the case may be, unaudited financial statements thereafter, the
ratio in column (1) below shall be calculated
(A) as at the end of the Fiscal Year, by reference to the unaudited
(preliminaries) consolidated financial statements and subsequently by
reference to the audited consolidated financial statements delivered to
the Agent pursuant to clause 12.1(e) and relevant Compliance Certificates
in respect of such Fiscal Year;
(B) as at the end of each Fiscal Half-Year ended 30 June by reference to the
unaudited (interims) consolidated financial statements for such Fiscal
Half-Year and the audited consolidated financial statements for the
previous Fiscal Year delivered to the Agent pursuant to clause 12.1(e)
and the relevant Compliance Certificate in respect of such Fiscal Half
Year (or in the case of 31 December, 1999, including the unaudited
(interims) for the Fiscal-Half Year ended 30 June, 1999 delivered
pursuant to the terms of the Existing Facilities); and
(C) Adjusted PBIT being calculated for the relevant twelve months and
Consolidated Gross Borrowings being calculated by reference to the
average daily outstandings over the most recent Fiscal Half-Year;
(iv) if, on the first day of any relevant Revolving Credit Term, or
Swingline Term, Interest Period, the date of any Utilisation, any L/C
Issue Date or the date of any calculation for the purpose of clause
5.5, the Parent is obliged to deliver to the Agent under clause
12.1(e) any audited or unaudited consolidated financial statements and
has failed to do so within the period set out in clause 12.1(e) the
Margin for the relevant Advance, Utilisation, Swingline Letter of
Credit or for the purposes of clause 5.5 (as the case may be) shall be
1.25 per cent. per annum. Any adjustment to the Margin required on the
basis of the audited or unaudited consolidated financial statements to
be delivered pursuant to clause 12.1(e) shall be applicable from the
date of delivery of the relevant financial statements and related
Compliance Certificate.
(1) (2)
Ratio of Consolidated Gross Applicable Margin
Borrowings to Adjusted PBIT %
greater than or equal to 2.5:1 1.25
greater than or equal to 2.0:1 but
less than 2.5:1 1.125
greater than or equal to 1.5:1 but
less than 2.0:1 1.00
greater than or equal to 1.0:1 but prior to 31 December 2000
less than 1.5:1 1.00, otherwise 0.85
less than 1.0:1 prior to 31 December 2000
1.00, otherwise 0.70
5.2 Interest rate for Revolving Credit Advances
The relevant Borrower shall pay to the Agent interest on each Revolving
Credit Advance drawn by it on its Repayment Date (or, in the case of a Revolving
Credit Advance having a Revolving Credit Term of more than six months, by
instalments, every six months from the Drawdown Date of such Revolving Credit
Advance and on the relevant Repayment Date), at the rate per annum being the
aggregate of (a) the Margin (b) the Additional Cost and (c) LIBOR.
5.3 Interest rate for Swingline Advances
The Swingline Borrower shall pay to the Swingline Bank interest on each
Swingline Advance drawn by it at the rate being the aggregate of (i) the
applicable Margin which portion shall be paid to the Agent upon receipt by the
Swingline Bank for the account of each Bank, pro rata to its Commitment in
respect of Facility A and (ii) the Federal Funds Rate (which portion shall be
for the account of the Swingline Bank). Such interest will be paid in arrears on
the Swingline Interest Payment Date falling on or immediately after the
Repayment Date of such Swingline Advance. For the purposes of this clause 5.3
"Swingline Interest Payment Date" shall mean each of the dates falling at three
monthly intervals beginning three months after the date of this Agreement and
the Termination Date in respect of Facility A.
5.4 Interest rate and Interest Periods for the Conversion Advance
(a) The Parent shall pay to the Agent interest on the Conversion Advance
in respect of each Interest Period on the relevant Interest Payment
Date (or, in the case of Interest Periods of more than six months, by
instalments, every six months from the commencement of the relevant
Interest Period and on the relevant Interest Payment Date) at the rate
per annum being the aggregate of (a) the Margin, (b) the Additional
Cost and (c) LIBOR.
(b) The Parent may select an Interest Period for the Conversion Advance by
notices received by the Agent not later than 10 a.m. on the third
Banking Day before the beginning of each Interest Period other than in
respect of the first Interest Period which shall be selected in the
Drawdown Notice for the Conversion Advance. Each Interest Period will
commence on the Drawdown Date of the Conversion Advance or the expiry
of the preceding Interest Period and shall be for a period of one,
two, three or six months or such other period as the Parent and the
Banks may agree and shall end not later than the Repayment Date of the
Conversion Advance
5.5 Interest for late payment
(a) If the relevant Borrower fails to pay any sum (including, without
limitation, any sum payable pursuant to this clause 5.5) on its due
date for payment under this Agreement that Borrower shall pay interest
on such sum from the due date up to the date of actual payment (as
well after as before judgment) at a rate determined pursuant to this
clause 5.5. The period beginning on such due date and ending on such
date of payment shall be divided into successive periods of not more
than three months as selected by the Agent, the Swingline Bank or the
Overdraft Bank (as the case may be) each of which (other than the
first, which shall commence on such due date) shall commence on the
last day of the preceding such period.
(b) The rate of interest applicable to each such period shall be:
(i) in the case of overdue amounts in relation to Revolving Credit
Advances and the Conversion Advance, the aggregate of (a) one per
cent. per annum, (b) the Margin (c) the Additional Cost and (d)
LIBOR;
(ii) in the case of overdue amounts in relation to Swingline Advances
and Swingline Letters of Credit, the aggregate of (a) one per
cent. per annum, (b) the Margin, to be not less than one per
cent. per annum and (c) the Federal Funds Rate;
(iii) in the case of overdue amounts in relation to Utilisations, the
aggregate of (a) one per cent. per annum, (b) the Margin (to be
not less than 1 per cent. per annum) and (c) the Overdraft Bank's
base rate in effect from time to time; and
(iv) in any other case, the aggregate of (a) one per cent. per annum,
(b) the Margin, (c) (in the case of amounts in Sterling) the
Additional Cost and (d) LIBOR.
(c) If such unpaid sum is an amount of principal which shall have become
due and payable, by reason of a declaration by the Agent under clause
14.2(b) or a prepayment pursuant to clauses 8.4 or 16.1, prior to the
Repayment Date relating thereto, the first such period selected by the
Agent shall end on such Repayment Date and interest shall be payable
on such unpaid sum during such period at a rate one per cent above the
rate applicable thereto immediately before it shall have become so due
and payable.
(d) Interest under this clause 5.5 shall be due and payable on the last
day of each period determined by the Agent, the Overdraft Bank or the
Swingline Bank (as the case may be) pursuant to this clause 5.5 or, if
earlier, on the date on which the sum in respect of which such
interest is accruing shall actually be paid. If, for the reasons
specified in clause 5.8(a)(i) or 5.8(a)(ii) it is not possible to
determine a rate in accordance with the foregoing provisions of this
clause 5.5, then
(A) in the case of amounts due other than in relation to Swingline
Advances, Swingline Letters of Credit or the Overdraft Facility
then each Bank shall promptly notify the Agent of the cost of
funds to such Bank and interest on any sum not paid on its due
date for payment shall be calculated for each Bank at a rate
determined by the Agent to be one per cent. per annum above the
aggregate of the Margin and the cost of funds (including, in the
case of amounts in Sterling, Additional Cost) to such Bank;
(B) in the case of amounts due in relation to Swingline Advances or
Swingline Letters of Credit, interest shall be calculated at a
rate determined by the Swingline Bank to be one per cent. per
annum above the aggregate of the Margin and the cost of funds to
the Swingline Bank.
5.6 Notification of interest rate
The Agent shall notify the Borrowers and the Banks promptly of each rate of
interest determined under this clause 5.
5.7 Reference Bank quotations
If any Reference Bank is unable or otherwise fails to furnish a quotation
for the purpose of calculating LIBOR (where such a quotation is required having
regard to the definition of "LIBOR" in clause 1.2) the interest rate for the
relevant Revolving Credit Term or other period shall be determined, subject to
clause 5.8, on the basis of the quotations furnished by the remaining Reference
Banks.
5.8 Market disruption; non-availability
(a) If and whenever, at any time prior to the making of a Revolving Credit
Advance or the Conversion Advance or the commencement of an Interest
Period:
(i) (at a time when Reference Bank quotations are required
having regard to the definition of "LIBOR" in clause 1.2)
the Agent shall have determined, after consultation with
the Reference Banks (which determination shall, in the
absence of manifest error, be conclusive), that adequate
and fair means do not exist for ascertaining LIBOR during
such Revolving Credit Term or Interest Period; or
(ii) none or only one of the Reference Banks supplies the Agent
with a quotation for the purpose of calculating LIBOR
(where such a quotation is required having regard to the
definition of "LIBOR" in clause 1.2); or
(iii) the Agent shall have received notification from Banks with
Contributions aggregating not less than one-third of the
total of the relevant Revolving Credit Advance or the
Conversion Advance (or, prior to the First Drawdown Date,
Commitments aggregating not less than one-third of the
Total Commitments) that deposits in Dollars are not
available to such Banks in the London Interbank Market in
the ordinary course of business in sufficient amounts to
fund their Contributions to such Revolving Credit Advance
or the Conversion Advance or that LIBOR does not accurately
reflect the cost to such Banks of obtaining such deposits;
the Agent shall forthwith give notice (a "Determination Notice") to the Parent
and each of the Banks. A Determination Notice shall contain particulars of the
relevant circumstances giving rise to its issue.
(b) During the period of 10 days after any Determination Notice has been
given by the Agent under clause 5.8(a), each Bank shall certify an
alternative basis (the "Substitute Basis") for making available or, as
the case may be, maintaining its Contribution. The Substitute Basis
may (without limitation) include alternative interest periods,
alternative currencies or alternative rates of interest but shall
include a margin above the cost of funds to such Bank (including
Additional Cost, if any) equivalent to the Margin. Each Substitute
Basis so certified shall be binding upon the relevant Borrower and
shall take effect in accordance with its terms from the date specified
in the Determination Notice until such time as the Agent notifies the
Borrower that none of the circumstances specified in clause 5.8(a)
continues to exist whereupon the normal interest rate fixing
provisions of this Agreement shall apply.
(c) If, and whenever at any time prior to the making of a Swingline
Advance, the Swingline Bank gives notice to the Swingline Borrower and
the Agent that deposits in Dollars are not available in the ordinary
course of businesses in sufficient amounts to fund such Swingline
Advance, Swingline Advances shall not be made until the Swingline Bank
gives notice to the contrary to the Parent and the Agent.
6 The Overdraft Facility and the Swingline Facility
6.1 The Overdraft Facility
(a) Utilisations of the Overdraft Facility by the Overdraft Borrowers may
be made subject to the limitation that the amount outstanding under
the Overdraft Facility(calculated on a net basis and taking account of
non-Sterling currency balances) shall not exceed (pound)4,000,000 at
any time.
(b) No principal amount in respect of the Overdraft Facility may be
demanded by the Overdraft Bank unless a notice has been given under
clause 14.2 but thereafter the monies owing in respect of the
Overdraft Facility are repayable on demand.
(c) The Overdraft Bank shall be at liberty at any time to refuse to allow
any Utilisation if the result would be that the limit in 6.1(a) above
would be exceeded.
6.2 Terms and conditions
The Overdraft Facility is made available on the terms and conditions set
out in this Agreement and the Overdraft Bank's normal overdraft terms and
conditions to the extent that the same are not inconsistent with this Agreement.
6.3 Utilisation, interest and repayment
(a) Any borrowing made available under the Overdraft Facility may be drawn
only in Sterling.
(b) The Overdraft Borrowers shall pay to the Overdraft Bank interest on
Utilisations under the Overdraft Facility at the rate being the
aggregate of (i) the applicable Margin (or, if greater, 1 per cent.
per annum), which portion shall be paid to the Agent upon receipt by
the Overdraft Bank for the account of each Bank pro rata to its
Commitment and (ii) the Overdraft Bank's base rate from time to time
(which portion shall be for the account of the Overdraft Bank). Such
interest shall accrue from day to day on the basis of actual days
elapsed and a year of 365 days, and shall be debited to the relevant
Overdraft Borrower's account on the Overdraft Bank's normal quarterly
charging dates.
(c) The Overdraft Borrowers shall repay or discharge the Overdraft
Facility in full on the Facility A Termination Date.
6.4 Set off under Overdraft Facility
Each Overdraft Borrower by way of security for all its obligations and
liabilities from time to time under the Overdraft Facility hereby irrevocably
agrees that the Overdraft Bank may at any time, without notice or demand and
notwithstanding any settlement of any obligation under the Overdraft Facility or
other matter whatsoever, combine or consolidate all or any of the accounts of
the Overdraft Borrower held with the Overdraft Bank and/or set-off or transfer
all and any moneys standing to the credit of any one or more accounts of it with
the Overdraft Bank or otherwise owing by the Overdraft Bank to it in or towards
satisfaction of its obligations under the Overdraft Facility and authorises the
Overdraft Bank to purchase with such moneys such other currencies as may be
necessary to effect such set-off or transfer at the relevant equivalent rate.
6.5 Set off under Swingline Facility
The Swingline Borrower by way of security for all its obligations and
liabilities from time to time under the Swingline Facility hereby irrevocably
agrees that the Swingline Bank may at any time, without notice or demand and
notwithstanding any settlement of any obligation under the Swingline Facility or
other matter whatsoever, combine or consolidate all or any of the accounts of
the Swingline Borrower held with the Swingline Bank and/or set-off or transfer
all and any moneys standing to the credit of any one or more accounts of it with
the Swingline Bank or otherwise owing by the Swingline Bank to it in or towards
satisfaction of its obligations under the Swingline Facility and authorises the
Swingline Bank to purchase with such moneys such other currencies as may be
necessary to effect such set-off or transfer at the relevant equivalent rate.
6.6 Swingline Letter of Credit Applications
(a) Subject to the terms and conditions of this Agreement, Swingline
Letters of Credit shall be made available to the Swingline Borrower
following receipt by the Swingline Bank (with a copy to the Agent) of
an L/C Application from the Swingline Borrower not later than 10 a.m.
(New York City time) on the second Banking Day before the proposed L/C
Issue Date.
(b) Each such L/C Application shall be effective on actual receipt by the
Swingline Bank and once given shall be irrevocable.
(c) The obligations of the Swingline Bank and the other Banks to
participate in a Swingline Letter of Credit are subject to the further
condition precedent that, prior to an L/C Application for a Swingline
Letter of Credit being made, the Swingline Bank or any Bank may
require a legal opinion from lawyers acceptable to it to the effect
that the terms of that Swingline Letter of Credit would be upheld by
the courts of the jurisdiction of the beneficiary but only if the
beneficiary is incorporated, or its principal place of business is
situate, in a jurisdiction where the Swingline Bank or the Bank
reasonably believes that any of the terms of the Swingline Letter of
Credit would not necessarily be upheld.
(d) The terms of the relevant Swingline Letter of Credit must contain a
clear procedure for the making of claims under that Swingline Letter
of Credit satisfactory to the Swingline Bank which shall include a
requirement that the beneficiary gives at least 5 Banking Days' notice
of settlement under the relevant Swingline Letter of Credit.
6.7 L/C Application
An L/C Application will not be regarded as having been duly completed
unless:
(a) the proposed L/C Issue Date is a Banking Day falling within the
Facility A Availability Period;
(b) the Swingline Letter of Credit is denominated in Dollars;
(c) it is accompanied by a copy of the terms of the proposed Swingline
Letter of Credit and the name of the beneficiary is specified;
(d) the Expiry Date is a Banking Day falling no later than 12 months after
the L/C Issue Date and in any event falling on or before the Facility
A Termination Date;
(e) there is a maximum limit to the stated liability of the Swingline Bank
under the Swingline Letter of Credit.
6.8 Amount of Swingline Letters of Credit
No Swingline Letter of Credit may be issued on any day for an amount which,
when aggregated with all other Swingline Letters of Credit outstanding or to be
issued on such day, would exceed the Swingline Letter of Credit Facility Amount.
6.9 Swingline Letter of Credit Commission
(a) The rate of Swingline Letter of Credit Commission applicable to each
Swingline Letter of Credit will be the same as the rate of the Margin.
(b) Swingline Letter of Credit Commission on the daily Outstanding L/C
Liability of each Swingline Letter of Credit (as determined by the
Swingline Bank) is payable by the Swingline Borrower in accordance
with clause 6.9(c) below to the Swingline Bank and shall be paid to
the Agent upon receipt by the Swingline Bank for the account of each
Bank pro rata to its Commitment.
(c) Swingline Letter of Credit Commission is payable in arrears on each
Quarter Day and on the Termination Date on the Outstanding L/C
Liability of each outstanding Swingline Letter of Credit in respect of
the period commencing on the day immediately following the date on
which an instalment of Swingline Letter of Credit Commission was last
payable in respect of the relevant Swingline Letter of Credit or, if
none, the date of issue of such Swingline Letter of Credit and ending
on the relevant payment date.
6.10 Notification of demand under a Swingline Letter of Credit
The Swingline Bank, forthwith after being notified by the beneficiary under
a Swingline Letter of Credit that it is required to make payment under that
Swingline Letter of Credit, shall notify the Agent and the Swingline Borrower
that such payment is due and of the Settlement Amount and Settlement Date in
respect of such Swingline Letter of Credit.
6.11 Conversion of Swingline Letter of Credit to Swingline Advance
(a) On receipt of a notice from the Swingline Bank under clause 6.10 the
Swingline Borrower shall either:
(i) Convert to Swingline Advance
subject to the terms and conditions of this Agreement, convert
the relevant Settlement Amount into a Swingline Advance by
delivering to the Swingline Bank, no later than close of business
on the first Banking Day following the date of receipt of the
said notice (the "Conversion Date"), a Drawdown Notice, copied to
the Agent (which shall be irrevocable) requesting a Swingline
Advance to the Swingline Borrower of such amount; or
(ii) Pay under indemnity
(if the Swingline Borrower does not wish to request a Swingline
Advance or the conditions precedent to such Swingline Advance
being made available set out in clause 3 are not fulfilled or the
Swingline Borrower fails to respond to such notice by close of
business on the Conversion Date) treat such notice as a demand
under the indemnity in clause 7.4, and pay to the Swingline Bank,
no later than close of business on the Conversion Date, the
relevant Settlement Amount.
(b) Each Swingline Advance pursuant to clause 6.11 above shall be paid,
not later than 11.00 a.m. on the day which is three New York Banking
Days preceding the Settlement Date, to the Swingline Bank and shall be
held in an account bearing interest at the Swingline Bank's overnight
deposit rate until the Settlement Date, which interest shall be for
the account of the Swingline Borrower.
6.12 Payment by the Banks to Swingline Bank
(a) If the Swingline Bank has not received the Settlement Amount from the
Swingline Borrower by 11.00 a.m. three Banking Days before the
Settlement Date, it shall notify the Agent by not later than 2 p.m.
three Banking Days before the Settlement Date.
(b) If the Agent has been notified under paragraph (a) above, it shall
notify each Bank by not later than 5 p.m. three Banking Days before
the Settlement Date.
(c) Each Bank notified under paragraph (b) above shall pay to the
Swingline Bank on the Settlement Date the amount of that Bank's
proportionate liability in respect of the unpaid Settlement Amount.
6.13 Default by Banks in payment to Swingline Bank
(a) If any Bank (an "L/C Defaulting Bank") fails to make any payment due
from it for the account of the Swingline Bank under clause 6.12 then
until the Swingline Bank has been reimbursed in respect thereof in
full (but without prejudice to the obligations of that L/C Defaulting
Bank to make such payment):
(i) the L/C Defaulting Bank shall hold on trust for the Swingline
Bank the benefit of any security now or hereafter created to
secure the obligations of the Swingline Borrower under this
Agreement and to which that L/C Defaulting Bank would have been
entitled had it made such payment; and
(ii) for the purposes of determining the constitution of the Majority
Banks:
(A) the Swingline Bank shall be treated as having a Contribution
or Commitment (as the case may be) equal to the amount of
such non-payment of the L/C Defaulting Bank (in addition to
the Commitment or Contribution (if any) which the Swingline
Bank already had in its capacity as a Bank); and
(B) the Commitment or Contribution (as the case may be) of the
L/C Defaulting Bank shall be treated as having been reduced
to the same extent.
(b) The rights conferred upon the Swingline Bank in this clause 6.13 are
in addition to any other rights which it may have against an L/C
Defaulting Bank.
6.14 Reduction of Swingline Letter of Credit Facility
The Outstanding L/C Liability of any Swingline Letter of Credit shall be
treated as reduced for the purposes of this Agreement only when and to the
extent that (a) the Swingline Bank has made a payment under a Swingline Letter
of Credit or (b) the liability of the Swingline Bank under a Swingline Letter of
Credit has been reduced in accordance with the terms of the relevant Swingline
Letter of Credit.
7 Indemnity of Overdraft Bank and Swingline Bank
7.1 Shortfall notification in relation to Swingline Advances and
Utilisations
If the Overdraft Borrowers or the Swingline Borrower fail to pay to the
Overdraft Bank or the Swingline Bank any amount under the Overdraft Facility or
any Swingline Advance, as relevant, when due and payable (the difference between
the amount due and the amount paid being the "Shortfall") then, without
limitation to all other rights and remedies in respect thereof, the Overdraft
Bank or the Swingline Bank, as relevant, 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 Banks stating the
amount of the Shortfall.
7.2 Payment by Banks
Following the issue of a Shortfall Notification each Bank shall pay to the
Agent for the account of the Overdraft Bank or the Swingline Bank, as relevant,
an amount equal to the proportion of the shortfall which that Bank's Commitment
bears to the Total Commitments in respect of Facility A at that time. Such
payments shall be made on the next Banking Day following the issuance of the
Shortfall Notification and shall, subject to clause 7.3, satisfy the amount due
from the relevant Borrower in respect of which such Shortfall arose to the
extent of such payments.
7.3 Indemnity from Borrowers in relation to Swingline Advances and
Utilisations
The Overdraft Borrowers or the Swingline Borrower (as the case may be)
shall indemnify the Banks on demand against any amount payable by them under
clause 7.2. The indemnity in this clause 7.3 shall be a continuing indemnity
notwithstanding any intermediate payment, partial settlement or other matter
whatsoever and shall be in addition to any security or other right the Banks may
have against the Overdraft Borrowers, the Swingline Borrower or any other
Obligor and shall not be wholly or partly discharged, varied or affected by any
time or indulgence granted to or by the Banks or any other party or by any
combination of accounts, set-off or other agreement between the Banks and the
Overdraft Bank or the Swingline Bank, as relevant in respect of any amount due
under clause 7.2 or by anything done or omitted which would but for this
provision operate to exonerate the Overdraft Borrowers, the Swingline Borrower
or any other Obligor. The Banks shall not be obliged to make any claim or demand
on any other person liable or to resort to any other Collateral Instrument or
other document or other means of payment before enforcing this indemnity against
the Overdraft Borrowers or the Swingline Borrower (as the case may be) and no
other such action which the Banks do take in connection with any such Collateral
Instrument, other document or other means of payment shall discharge reduce or
otherwise affect the liability of the Overdraft Borrowers or the Swingline
Borrower (as the case may be) under this clause 7.3.
7.4 Counter-indemnity for Swingline Letters of Credit
(a) The Swingline Borrower:
(i) agrees to pay to the Agent for the account of the Swingline
Bank, for the account of all Banks, to the extent that they
have complied with their obligations under clause 6.12, on
demand from the Agent an amount equal to and in the same
currency as each amount demanded in accordance with
paragraph (b) below in respect of a Swingline Letter of
Credit; and
(ii) undertakes to indemnify and hold harmless the Agent, the
Swingline Bank and each Bank from and against all
liabilities, costs, losses, damages and expenses which they
incur or sustain by reason of or arising in any way
whatsoever in connection with or by reference to the issue
of a Swingline Letter of Credit or the performance thereof.
(b) The Swingline Borrower and each Bank unconditionally and
irrevocably:
(i) authorises and directs the Swingline Bank to pay any prima
facie valid demand under and in accordance with a Swingline
Letter of Credit (which the Swingline Bank believes, in its
sole discretion, to be valid) without requiring proof of
the agreement of the Swingline Borrower or any Bank that
the amounts so demanded or paid are or were due and
notwithstanding that the Swingline Borrower or any Bank may
dispute the validity of any such request, demand or
payment;
(ii) confirms that the Swingline Bank deals in documents only
and shall not be concerned with the legality of the claim
or any other underlying transaction or any set-off,
counterclaim or defence as between the Swingline Borrower
and any beneficiary of a Swingline Letter of Credit;
(iii) agrees that neither the Swingline Bank nor any other Bank
need have regard to the sufficiency, accuracy or
genuineness of any such demand or any certificate or
statement in connection therewith or any incapacity of or
limitation upon the powers of any person signing or issuing
such demand, certificate or statement which appears on its
face to be in order and agrees that neither the Swingline
Bank nor any Bank shall be obliged to enquire as to any
such matters and may assume, unless notified to the
contrary, that any such demand, certificate or statement
which appears on its face to be in order is correct and
properly made; and
(iv) without prejudice to the preceding sub-paragraphs, agrees
that if the Swingline Bank pays any such demand in
accordance with the terms of the relevant Swingline Letter
of Credit which is not legally payable that amount shall
nevertheless be regarded as having been properly paid for
the purposes of this Agreement.
7.5 Rights of contribution and subrogation of Swingline Borrower
Until all amounts due under this Agreement have been fully and irrevocably
discharged and all amounts which are or may become payable by the Borrowers
under or in connection with the Security Documents have been irrevocably paid in
full, the Swingline Borrower shall not, by virtue of any payment made by it
under or in connection with or referable to this clause 7 or otherwise, be
subrogated to any rights, security or moneys held or received by any Finance
Party or be entitled at any time to exercise, claim or have the benefit of any
right of contribution or subrogation or similar right against any Finance Party.
All rights of contribution or similar rights arising in respect of any amount
due under this Agreement or in connection with the Security Documents against
any Finance Party are hereby waived by the Swingline Borrower.
7.6 Waiver of defences of Swingline Borrower
The Swingline Borrower agrees that its obligations under this clause 7
shall not be affected by any act, omission, matter or thing which but for this
provision might operate to release or otherwise exonerate it from its
obligations under this Agreement in whole or in part, including without
limitation and whether or not known to it:
(a) any time or waiver granted to or composition with any Finance Party,
any beneficiary of a Swingline Letter of Credit or any other person;
(b) any taking, variation, compromise, renewal or release of, or refusal
or neglect to perfect or enforce, any rights, remedies or securities
available to any Finance Party, or other person or arising under a
Swingline Letter of Credit; or
(c) any variation or extension of or increase in liabilities under a
Swingline Letter of Credit, so that references in this Agreement to
Swingline Letters of Credit shall include each such extension and
variation.
7.7 Continuing indemnity of Swingline Borrower
This shall be a continuing indemnity, shall extend to the ultimate balance
of the obligations and liabilities of the Swingline Borrower under this clause 7
and shall continue in force notwithstanding any intermediate payment in whole or
in part of such obligations or liabilities.
7.8 Additional security
The obligations of the Swingline Borrower under this clause 7 shall be in
addition to and shall not be in any way prejudiced by any collateral or other
security now or hereafter held by any Finance Party as security or any lien to
which such Finance Party may be entitled.
7.9 Preservation of rights
No invalidity or unenforceability of all or any part of this clause 7 shall
affect any rights of indemnity or otherwise which any Finance Party would or may
have in the absence of or in addition to this clause 7.
8 Repayment, prepayment and cancellation
8.1 Repayment of Revolving Credit Advances
The relevant Borrower shall repay to the Agent each Revolving Credit
Advance on its Repayment Date in the currency in which it is denominated. If a
Revolving Credit Advance (the "new Revolving Credit Advance") is to be made on a
day on which another Revolving Credit Advance made to the same Borrower (the
"maturing Revolving Credit Advance") denominated in the same currency as the new
Revolving Credit Advance is due to be repaid then, subject to the terms of this
Agreement and so long as the conditions referred to in clause 3.2 shall have
been satisfied in relation to the new Revolving Credit Advance, (a) the maturing
Revolving Credit Advance shall be deemed to have been repaid on its Repayment
Date either in whole (if the new Revolving Credit Advance is equal to or greater
than the maturing Revolving Credit Advance) or in part (if the new Revolving
Credit Advance is less than the maturing Advance) and (b) to the extent that the
maturing Revolving Credit Advance is so deemed to have been repaid, the
principal amount of the new Revolving Credit Advance to be made on such date
shall be deemed to have been credited to the account of such Borrower by the
Agent on behalf of the Banks in accordance with the terms of this Agreement and
the Banks shall only be obliged to make available to such Borrower a principal
amount equal to the amount by which the new Revolving Credit Advance exceeds the
maturing Revolving Credit Advance. On the Termination Date in respect of the
relevant Revolving Credit Facility, all outstanding Revolving Credit Advances
under such Revolving Credit Facility and other sums (if any) then owing under
this Agreement in connection with such Revolving Credit Facility (other than the
Conversion Advance and sums relating thereto) shall in any event be repaid or
paid in full.
8.2 Repayment of Swingline Advances
The Swingline Borrower shall repay to the Swingline Bank each Swingline
Advance on its Repayment Date and shall repay or discharge in full all
outstanding Swingline Advances on the Termination Date in relation to Facility
A.
8.3 Repayment of the Conversion Advance
The Conversion Advance shall be repaid in full by a single repayment on the
date falling 364 days after its Drawdown Date.
8.4 Voluntary prepayment
The Borrowers may without premium or penalty prepay any Revolving Credit
Advance or the Conversion Advance (in whole but not in part only) subject to the
provisions of this clause 8.
8.5 Additional voluntary prepayment
The Borrowers may (in whole but not in part only), without premium or
penalty, but without prejudice to their obligations under clauses 5.8, 10.5 and
16.2 if they have become obliged to pay additional amounts under clause 10.5 or
16.2 to any Bank or a Substitute Basis applies by virtue of clause 5.8:
(a) prepay the Contribution to Advances of such Bank or, in the case of
the application of a Substitute Basis, prepay any Bank's Contribution
to which such Substitute Basis applies; and
(b) pay an amount equal to the maximum possible liability of such Bank
under clause 7.1 in respect of the Overdraft Facility and the
Swingline Facility to the Agent to be held on a blocked account as
cash collateral for that Bank's liabilities on terms satisfactory to
the Agent (acting reasonably).
Upon any notice of such prepayment being given, the Commitment of the
relevant Bank shall be reduced to zero in respect of the Revolving Credit
Facilities, but such Bank's obligations under clauses 6 and 7 shall remain in
full force and effect until the Agent notifies such Bank that it is satisfied
that cash collateral has been received under clause 8.5(b) representing the full
amount of that Bank's liabilities.
8.6 Mandatory prepayment/reduction
(a) The Total Commitments in respect of Facility B shall be permanently
reduced (and the Parent shall procure that the Conversion Advance is
prepaid) by an amount equal to the Aggregate Net Proceeds of any
External Refinancing.
(b) (i) If the Aggregate Net Proceeds of any Trade Sales and/or Flotations
and/or Permitted Restricted Asset Disposals which are received by
members of the Group exceed $10,000,000 (or its equivalent) in any
Fiscal Year, then, save to the extent that such Aggregate Net Proceeds
are subject to a valid Reinvestment Notice, any External Refinancing,
subject to clause 8.6(b)(ii), and the Total Commitments in respect of
the Revolving Credit Facilities shall be permanently reduced (or the
Parent shall procure that the Conversion Advance is prepaid) by an
amount equal to 75 per cent. of such excess Aggregate Net Proceeds
such amount to be applied pro-rata between the External Refinancing on
the one hand and the Total Commitments and the Conversion Advance on
the other hand. Any such pro rata reduction in the Total Commitments
in respect of the Revolving Credit Facilities shall be applied first
against the Facility B Total Commitments and then, if such Total
Commitments are zero (and the Conversion Advance has been prepaid in
full), applied against the Facility A Advances and Total Commitments.
(ii) If in the circumstances set out in clause 8.6(b)(i) the relevant
member of the Group is not required by the terms of the External
Refinancing to prepay the External Refinancing (or if so
required, such requirement is waived) the Group may retain the
pro-rata share of the Aggregate Net Proceeds allocated to the
External Refinancing by clause 8.6(b)(i) for its own account. If,
on the other hand, there is such a requirement to prepay the
External Refinancing, then the Parent shall procure that any such
pro-rata reduction of such External Refinancing is immediately
effected by the prepayment and cancellation of the facilities
concerned to the extent necessary.
(c) (i) Within 15 Banking Days of completion of any External Refinancing
the Parent shall give notice of the amount of the Aggregate Net
Proceeds, such amount to be applied towards reducing the Total
Commitments in respect of Facility B and prepayment of the Conversion
Advance pursuant to clause 8.6(a):
(ii) Within 15 Banking Days of completion of any Trade Sale, Flotation
or Permitted Restricted Asset Disposal the Parent shall:
(A) give notice of the amount of the resulting Aggregate Net
Proceeds and the amount, if any, by which they exceed
$10,000,000 in that Fiscal Year;
(B) provide the Agent with a Reinvestment Notice in respect of
such excess (if applicable) or in the absence of such
Reinvestment Notice shall give notice of the amount of such
Aggregate Net Proceeds to be applied towards reducing the
Total Commitments and prepayment of the Conversion Advance
pursuant to clause 8.6(b);
(C) give notice of the amount of such Aggregate Net Proceeds to
be applied towards prepaying the External Refinancing or a
statement that it is not required to make such a prepayment
in accordance with clause 8.6(b)(ii).
To the extent that pursuant to Clause 8.6(a) or (b), a
portion of such Aggregate Net Proceeds are to be applied
towards reducing the Total Commitments and prepayment of the
Conversion Advance they shall be so applied with immediate
effect, regardless of any dispute between the Parent and the
Agent as to the amount of Aggregate Net Proceeds. If the
Parent and the Agent subsequently agree a higher figure for
the amount of the Aggregate Net Proceeds, the resulting
further reduction in the Total Commitments shall have
immediate effect.
(iii) The Aggregate Net Proceeds of a relevant event which are
the subject of a valid Reinvestment Notice may be applied in
or towards a permitted application within 6 months of the
relevant event.
(iv) The Parent shall procure that the relevant pro rata share of
any unapplied Aggregate Net Proceeds of a relevant event are
applied in reducing the Total Commitments and prepaying the
Conversion Advance in accordance with Clause 8.6(b) as if
they had not been subject to a Reinvestment Notice.
For the purposes of this Clause 8.6:
(i) a "relevant event" means any Trade Sale and/or
Flotation and/or Permitted Restricted Asset Disposals;
(ii) "unapplied Aggregate Net Proceeds" means, in respect of
a relevant event those Aggregate Net Proceeds (or their
Sterling equivalent at the date of receipt, if
denominated in a currency other than Sterling) of such
relevant disposal which are subject to a valid
Reinvestment Notice and which, as at the end of the
period of six months after the date of such relevant
receipt (or, if earlier, as at the date on which the
Parent notifies the Agent that the Group no longer
intends and expects to use all or the relevant portion
of the Aggregate Net Proceeds concerned towards a
permitted application) have not been applied in a
permitted application;
(iii) a "permitted application" means, in respect of
Aggregate Net Proceeds of a relevant event, their
application within 6 months of their receipt by a
member of the Group in funding a Permitted Acquisition
or reimbursing any relevant member of the Group for
amounts paid in completing a Permitted Acquisition no
more than 6 months prior to such receipt;
(iv) a "Reinvestment Notice" means, in respect of Aggregate
Net Proceeds of a relevant event, a notice from the
Parent and received by the Agent not later than 15
Banking Days after the receipt of such Aggregate Net
Proceeds by a member of the Group which confirms that
the relevant member of the Group intends and expects to
use all or a relevant portion of such Aggregate Net
Proceeds of the relevant event concerned towards a
permitted application.
(d) The Parent shall procure that an amount equal to the amount (if any)
required to be applied in prepayment of the Conversion Advance or in
repayment of Revolving Credit Advances, Swingline Advances or
Utilisations in order that the aggregate outstandings under this
Agreement do not exceed the Total Commitments as so reduced shall be
paid to the Agent forthwith following receipt to be held on deposit
until such amount is applied under clause 8.6(e) below.
(e) The amount deposited pursuant to paragraph (d) above shall be applied
in repayment of Advances as follows:
(i) on Repayment Dates or Interest Payment Dates falling after the
date upon which the relevant amount was deposited with the Agent
beginning with the first such date and continuing until the
repayment obligation under paragraph (d) above has been
satisfied; and
(ii) if on any Repayment Date upon which an amount is to be applied in
mandatory repayment:
1) such amount is less than the amount of the Revolving Credit
Advances whose Term ends on such date, the Parent may select
against which Revolving Credit Advance or Revolving Credit
Advances the repayment is to be made and the proportion of
the relevant amount to be repaid on each Revolving Credit
Advance but shall ensure that the full amount of the
Aggregate Net Proceeds required to be applied is so applied
in repayment when received;
2) such amount received is equal to or greater than the amount
of the Revolving Credit Advances whose Term ends on such
date, the Parent shall procure the repayment of each such
Revolving Credit Advance on such date.
(f) The Parent will procure the conversion of the funds to be used in
repayment under this clause 8.6 into the currency of the amount or
amounts to be repaid prior to paying the same to the Agent pursuant to
clause 8.6(d).
(g) If repayments made pursuant to clauses 8.6(d) and 8.6(e) above are
insufficient to reduce the aggregate outstandings under this Agreement
to the level of the Total Commitments, then the Parent shall procure
the repayment of Swingline Advances and Utilisations or the discharge
of Swingline Letters of Credit in order to reduce the outstandings
under this Agreement to the level of the Total Commitments.
(h) If the D Acquisition has not been completed by 31st January, 2000,
then the Total Commitments in respect of Facility B shall
automatically be reduced by $75,000,000 and the Commitment of each
Bank reduced proportionately.
8.7 Amounts payable on prepayment
Any prepayment under this Agreement shall be made in the currency in which
the relevant Advance is then denominated together with: (a) accrued interest to
the date of prepayment; (b) any additional amount payable under clauses 10.5,
16.2 or 16.5; and (c) all other sums payable by the Borrowers to the relevant
Bank under this Agreement including, without limitation, any accrued commitment
commission payable under clause 9.1(c) and any amounts payable under clause
15.1.
8.8 Notice of prepayment
No prepayment may be effected under clause 8.4 or 8.5 unless the relevant
Borrower shall have given the Agent at least 5 Banking Days' notice of its
intention to make such prepayment. Every notice of prepayment shall be effective
only on actual receipt by the Agent, shall be irrevocable and shall oblige the
relevant Borrower to make such prepayment on the date specified. Amounts prepaid
under clause 8.4 or 8.5 may be re-drawn under this Agreement.
8.9 Cancellation of Commitments
The Parent may at any time during the Availability Period in respect of the
relevant Revolving Credit Facility by notice to the Agent (effective only on
actual receipt) cancel with effect from a date not less than 5 Banking Days
after the receipt by the Agent of such notice the whole or any part (being
$5,000,000 or any larger sum which is an integral multiple of $1,000,000) of the
Total Commitments in respect of the Revolving Credit Facility concerned without
penalty. Any such notice of cancellation, once given, shall be irrevocable and
upon such cancellation taking effect the Commitment of each Bank shall be
reduced proportionately.
8.10 Allocation of reduction of commitments
If the Commitments in respect of Facility A are to be reduced or cancelled
in part (but not in whole) pursuant to any provision of this Agreement such
reduction shall be allocated against Facility A, the Swingline Facility and the
Overdraft Facility as the Parent shall specify and the Commitment of each Bank
shall be reduced proportionately.
9 Fees and expenses
9.1 Fees
The Parent shall pay to the Agent whether or not any Advance is drawn or
any Utilisation made:
(a) Arrangement fee
for the account of the Arrangers, an arrangement fee of an amount
agreed between the Parent and the Arrangers in a letter dated the same
date as this Agreement, such fee to be paid on the basis stipulated in
such letter;
(b) Agency fee
on first Drawdown and on each anniversary thereof until all moneys
owing under this Agreement have been paid in full, for the account of
the Agent, an agency fee of an amount agreed between the Parent and
the Agent in a letter dated the same date as this Agreement; and
(c) Commitment Commission
(i) on the dates falling at three month intervals after the date of
this Agreement and on the last day of the Availability Period in
respect of each Revolving Credit Facility, for the account of
each Bank, commitment commission computed in the following
manner:
(A) in respect of Facility A, at the rate per annum equal to the
lesser of (i) 0.425 per cent. and (ii) 50 per cent. of the
Margin applicable on each day of the period for which the
commitment commission is calculated (such rate changing, if
relevant, on the day that financial statements are delivered
to the Agent pursuant to clause 12.1) on the daily undrawn
and uncancelled amount of such Bank's Commitment in respect
of Facility A; and
(B) in respect of Facility B, at the rate of 0.25 per cent. per
annum on the daily undrawn and uncancelled amount of such
Bank's Commitment under Facility B; and
(ii) if a Revolving Credit Advance is outstanding in an Optional
Currency, the amount of the Commitments treated as drawn for the
purpose of calculating commitment commission shall be the Dollar
Amount of such Revolving Credit Advance;
(d) Conversion Fee
on date of its exercise of the Conversion Option, for the account of
the Banks pro rata to their Commitments in respect of Facility B, a
fee equal to 0.05 per cent. of the Conversion Advance;
(e) Swingline Bank Fee
on the dates falling at quarterly intervals after the date of this
Agreement and on the Termination Date in respect of Facility A, for
the account of the Swingline Bank, a Swingline Bank fee and Swingline
Letter of Credit fee of amounts agreed between the Parent and the
Swingline Bank in a letter dated the same date as this Agreement; and
(f) Overdraft Bank Fee
on the dates falling at quarterly intervals after the date of this
Agreement and on the Termination Date in respect of Facility A, for
the account of the Overdraft Bank, an Overdraft Bank fee of an amount
agreed between the Parent and the Overdraft Bank in a letter dated the
same date as this Agreement.
9.2 Expenses
The Parent shall pay to the Agent on demand:
(a) all reasonable expenses (including legal, printing and out-of-pocket
expenses) incurred by the Finance Parties in connection with the
negotiation, preparation and execution of this Agreement, the Security
Documents, the syndication of the Facilities, the preparation and
distribution of the Information Memorandum and of any amendment or
extension of, or the granting of any waiver or consent under, this
Agreement or the Security Documents; and
(b) all expenses (including legal and out-of-pocket expenses) incurred by
the Finance Parties or any of them in contemplation of, or otherwise
in connection with, the enforcement or attempted enforcement of, or
preservation or attempted preservation of any rights under, this
Agreement and/or the Security Documents (including, without
limitation, the fees and expenses of accountants or other experts
incurred in relation to any investigation into the affairs of the
Group provided that such fees shall not be payable by the Parent if a
Default has not occurred) or otherwise in respect of the moneys owing
under this Agreement and/or the Security Documents, together with
interest at the rate referred to in clause 5.5 from the date on which
such expenses were notified to the Parent to the date of payment (as
well after as before judgment).
9.3 Value Added Tax
All fees and expenses payable pursuant to this clause 9 shall be paid
together with an amount equal to any value added tax payable by the Finance
Parties in respect of such fees and expenses. Any value added tax chargeable in
respect of any services supplied by the Finance Parties under this Agreement
shall, on delivery of a value added tax invoice, be paid in addition to any sum
agreed to be paid under this Agreement.
9.4 Stamp and other duties
The Parent shall pay all stamp, documentary, registration or other similar
duties or Taxes (including any duties or Taxes (other than Taxes on overall net
income of the Finance Parties) payable by, or assessed on, the Finance Parties)
imposed on or in connection with this Agreement and/or the Security Documents or
the Facilities and shall indemnify the Finance Parties against any liability
arising by reason of any delay or omission by the Borrowers to pay such duties
or Taxes save for any stamp duty payable as a result of any transfer pursuant to
clause 18.
10 Payments and Taxes; accounts and calculations
10.1 No set-off or counterclaim; distribution to the Banks
Subject to clauses 10.5 and 10.6, all payments to be made by the Borrowers
under this Agreement and/or the Security Documents shall be made in full,
without any set-off or counterclaim whatsoever and free and clear of any
deductions or withholdings, in Dollars or the relevant Optional Currency (except
for costs, charges or expenses which shall be payable in the currency in which
they are incurred) on the due date in immediately available cleared funds to the
account of the Agent, the Swingline Bank or the Overdraft Bank (as relevant) at
such bank as the Agent, the Swingline Bank or the Overdraft Bank (as relevant)
may from time to time specify for this purpose. Save where this Agreement and/or
the Security Documents provide for a payment to be made for the account of a
particular Bank (including, without limitation, clauses 8.5, 9, 10.5, 15.1,
15.2, 16.1 and 16.2 in which case the Agent shall distribute the relevant
payment to the Bank concerned, or for the account of the Swingline Bank or the
Overdraft Bank), payments to be made by the Borrowers under this Agreement
and/or the Security Documents shall be for the account of all the Banks and the
Agent shall forthwith distribute such payments in like funds as are received by
the Agent to the Banks rateably in accordance with their Commitments or
Contributions, as the case may be.
10.2 Payments by the Banks
All sums to be advanced by the Banks to the Borrowers under this Agreement
shall be remitted in Dollars or the relevant Optional Currency in immediately
available cleared funds on the relevant Drawdown Date to the account of the
Agent at such bank as the Agent may have notified to the Banks and shall be paid
by the Agent on such date in like funds as are received by the Agent to the
account of the relevant Borrower specified in the relevant Drawdown Notice.
10.3 Non-Banking Days
When any payment under this Agreement would otherwise be due on a day which
is not a Banking Day, the due date for payment shall be postponed to the next
following Banking Day unless such Banking Day falls in the next calendar month
in which case payment shall be made on the immediately preceding Banking Day.
10.4 Agent may assume receipt
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may assume, unless it has been notified to
the contrary in writing, that the payment will be made when due and may (but
shall not be obliged to) make such sum available to the person so entitled. If
it proves to be the case that such payment was not made to the Agent, then the
person to whom such sum was so made available shall on request refund such sum
to the Agent together with interest thereon sufficient to compensate the Agent
for the cost of making available such sum up to the date of such repayment and
the person by whom such sum was payable shall indemnify the Agent for any and
all loss or expense which the Agent may sustain or incur as a consequence of
such sum not having been paid on its due date.
10.5 Grossing-up for Taxes
If at any time any Borrower is required to make any deduction or
withholding in respect of Taxes (excluding Taxes or Taxation on the overall net
income, profits or gains of a Finance Party imposed in the jurisdiction in which
its principal or lending office under the Agreement is located) from any payment
due under this Agreement and/or the Security Documents for the account of any
Finance Party (or if the Agent is required to make any such deduction or
withholding from a payment to any Arranger or a Bank), the sum due from the
relevant Borrower in respect of such payment shall, subject to clause 10.6, be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, each Finance Party receives on the due date for such
payment (and retains, free from any liability in respect of such deduction or
withholding) a net sum equal to the sum which it would have received had no such
deduction or withholding been required to be made and that Borrower shall
indemnify each Finance Party against any losses or costs incurred by any of them
by reason of any failure of that Borrower to make any such deduction or
withholding or by reason of any increased payment not being made on the due date
for such payment, save only to the extent that such failure by that Borrower is
attributable to a breach by a Finance Party of the warranty in clause 10.7 or of
its obligation promptly to notify that Borrower of a change in its status
pursuant to clause 10.7. Such Borrower shall promptly deliver to the Agent any
receipts, certificates or other proof evidencing the amounts (if any) paid or
payable in respect of any such deduction or withholding (other than a deduction
or withholding made by the Agent).
10.6 Exceptions to gross-up
(a) If any Bank is not or ceases to be a Qualifying Bank then (save in
circumstances where such Bank ceases to be a Qualifying Bank by reason
of any change in law or regulation or in its application or
interpretation, in each case taking effect after the date of this
Agreement) the Borrowers shall not be liable to pay to that Bank under
clause 10.5 any sum in excess of the sum they would have been obliged
to pay if that Bank had been, or had not ceased to be, a Qualifying
Bank.
(b) No Obligor incorporated in the United States or resident in the United
States for tax purposes shall be required to pay any additional amount
on account of any taxes of, or imposed by, the United States pursuant
to clause 10.5 to any Bank if such Bank is not entitled on the date on
which it becomes a party to this Agreement to submit Internal Revenue
Service Form W-8BEN (with respect to a complete exemption under an
income tax treaty) (or any successor thereto) or Internal Revenue
Service Form W-8ECI (or any successor thereto) so as to meet its
obligations to submit such a form or other certificate pursuant to
clause 10.8 or if such Bank otherwise fails to submit such a form or
certificate that it is required to submit pursuant to clause 10.8.
(c) (i) Any Bank which is a Qualifying Bank within paragraph (b)(ii) of
the definition of Qualifying Bank shall, as soon as reasonably
practicable and permissible after it becomes a party to this Agreement
submit to the relevant tax authorities in the country of residence of
such Bank the relevant form required for the purpose of obtaining a
direction from the Inland Revenue, or (as the case may require) submit
to the Agent the relevant declaration to secure, that payment made may
be made by each relevant Borrower or (as the case may require) the
Agent without any deduction in respect of United Kingdom tax and if
any Bank fails to comply with such obligation the Borrower shall not
be obliged to pay to such Bank under clause 10.5 any sum in excess of
the sum which it would have been required to pay to such Bank had it
complied with the obligation in this clause 10.6(c).
(ii) Any Bank which is a Qualifying Bank within paragraph (c) of the
definition of Qualifying Bank shall, as soon as reasonably practicable
and permissible after it becomes a Qualifying Bank by virtue of
paragraph (c) of the definition of Qualifying Bank and ceases to be a
Qualifying Bank by virtue of paragraph (a) or (b)(i) of the definition
of Qualifying Bank or becomes a party to this Agreement (whichever is
the later) submit to the relevant tax authorities in the country of
residence of such Bank the relevant form required for the purpose of
obtaining a direction from the Inland Revenue, or (as the case may
require) submit to the Agent the relevant declaration to secure, that
payment made may be made by each relevant Borrower or (as the case may
require) the Agent without any deduction in respect of United Kingdom
tax and if any Bank fails to comply with such obligation the Borrower
shall not be obliged to pay to such Bank under clause 10.5 any sum in
excess of the sum which it would have been required to pay to such
Bank had it complied with the obligation in this clause 10.6(c).
(d) No Bank is obliged to deliver any form or declaration under clause
10.6(c) if the Bank is unable to complete the form or declaration in a
manner which will enable the Borrower (or as the case may require) the
Agent to make payment to that Bank without deduction or withholding in
respect of Taxes in the United Kingdom as a result of the introduction
of or any change in or in the interpretation or application by any
relevant authority of, any law, treaty or regulation or any practice
position or concession of the United Kingdom Inland Revenue after the
date of this Agreement.
(e) (i) Subject to clause 10.6(e)(ii) below, if any forms previously
delivered under sub-paragraph (i), (ii) or (iii) of paragraph (d) of
the definition of Qualifying Bank shall have expired, become obsolete,
invalid or inaccurate in any respect which has resulted in the loss of
any applicable exemption from withholding and, (where the reason for
such obsolescence, invalidity or inaccuracy is a change in, or in the
interpretation or application of, or the introduction of any law or
regulation in each case after the date of this Agreement) following
not less than thirty days' prior written notice from each relevant US
Borrower to the Agent (as to such bank or financial institution), such
bank or financial institution shall not have delivered to the Agent
and such Borrower one or more then currently effective forms described
under such sub-paragraph (i), (ii) or (iii), the relevant US Borrower
shall not be obliged to pay such Bank under clause 10.5 any sum in
excess of the sum which it would have been required to pay to such
Bank had such forms not become obsolete, invalid or inaccurate.
(ii) Clause 10.6(e)(i) shall not apply to a bank or financial
institution which shall have been a Qualifying Bank by virtue of
paragraph (d) of the definition of Qualifying Bank when it became a
party to this Agreement if such Qualifying Bank is not legally able to
deliver such currently effective forms described under such
sub-paragraph (i), (ii) or (iii) of paragraph (d) of the definition of
Qualifying Bank.
10.7 Qualifying Banks
(a) Each Bank warrants that it is a Qualifying Bank
(b) Each Bank which makes an Advance to a UK Borrower warrants that it is
a Qualifying Bank by virtue of paragraph (a) of the definition of
Qualifying Bank.
(c) Each Bank agrees promptly to notify the Agent and the Borrowers if it
ceases, or intends to cease, to be a Qualifying Bank, or, if it
derives its status, or intends to derive its status, as a Qualifying
Bank from a different paragraph or sub paragraph of the definition of
Qualifying Bank.
(d) Subject to clause 10.7(e), each Bank which makes an Advance to a UK
Borrower agrees that it will not cease to be within the charge to UK
corporation tax as respects any interest payable on that Advance, as
long as that Borrower is a UK Borrower and is obliged under this
Agreement to pay interest to such Bank in respect of an Advance made
by that Bank to that Borrower.
(e) In the event that the Parent and the Agent (acting reasonably) agree
that interest paid under this Agreement by a UK Borrower to a Bank is
not treated as a distribution for UK Tax purposes, clause 10.7(d)
shall not apply
10.8 US Tax forms
(a) Except as otherwise agreed by the Parent, each Bank (other than a Bank
organised under the federal laws of, or the laws of any of, the United
States of America or the District of Columbia) shall, subject to
paragraph (c) below, deliver to each US Borrower and the Agent within
30 days from the date it becomes a party to this Agreement (and prior
to the expiry of any such form previously provided by that Bank), two
accurate and complete original signed copies of US Internal Revenue
Service Form W-8BEN (with respect to a complete exemption under an
income tax treaty) or W-8ECI, whichever is applicable or any successor
or additional form allowing the US Borrower to make payments to that
Bank without deduction or withholding in respect of federal income tax
in the United States of America provided that W-8BEN or W-8ECI (or
successor forms) shall be delivered no later than the first Repayment
Date after the relevant Bank becomes a party to this Agreement.
(b) Except as otherwise agreed by the Parent, each Bank that is organised
under the federal laws of, or the laws of any of, the United States of
America or the District of Columbia shall, subject to paragraph (c)
below, deliver to each US Borrower and the Agent within 30 days from
the date it becomes a party to this Agreement (and prior to the expiry
of any such form previously provided by the Bank) two accurate and
complete original copies of duly executed US Internal Revenue Service
Forms W-9 or any successor to such form.
(c) No Bank is obliged to deliver any form(s) under clause 10.6(b) or
paragraph (a) or (b) above if the Bank is unable to complete the
form(s) in a manner which will enable the US Borrower to make payments
to that Bank without deduction or withholding in respect of Taxes in
the United States of America as a result of the introduction of or any
change in, or in the interpretation or application by any relevant
authority of, any law, treaty or regulation or any practice, position
or concession of the US Internal Revenue Service after the date of
this Agreement.
(d) The Agent agrees that it will furnish on the date of this Agreement
(and prior to the expiry of any such form previously provided by the
Agent) to each US Borrower, with respect to fees payable to it, two
accurate and complete original signed copies of either (i) Internal
Revenue Service Forms W-8ECI (or successor form) (if the services are
performed by a US branch), or (ii) a statement that the services will
be performed entirely outside the US, or, if appropriate, Internal
Revenue Service Form W-8BEN (establishing a complete exemption under
an income tax treaty) with respect to those services.
10.9 Claw-back of tax benefit
If following any such deduction or withholding as is referred to in clause
10.5 any Bank shall receive or be granted a credit against or remission for any
Taxes payable by it, such Bank shall, subject to the relevant Borrower having
made any increased payment in accordance with clause 10.5 and to the extent that
such Bank can do so without prejudicing the retention of the amount of such
credit or remission and without prejudice to the right of such Bank to obtain
any other relief or allowance which may be available to it, reimburse the
Borrower with such amount as the Bank shall in its absolute discretion (acting
in good faith) certify to be the proportion of such credit or remission as will
leave that Bank (after such reimbursement) in no worse position than it would
have been in had there been no such deduction or withholding from the payment by
the Borrower. Such reimbursement shall be made forthwith upon such Bank
certifying that the amount of the credit or remission has been received by it.
Nothing contained in this Agreement shall oblige any Bank to rearrange its tax
affairs or to disclose any information regarding its tax affairs and
computations. Without prejudice to the generality of the foregoing, no Borrower
shall, by virtue of this clause 10.9, be entitled to enquire about any Bank's
tax affairs.
10.10 Bank accounts
Each Bank, the Swingline Bank and the Overdraft Bank, shall maintain, in
accordance with its usual practices, an account or accounts evidencing the
amounts from time to time lent by, owing to and paid to it under this Agreement.
The Agent shall maintain a control account showing each Revolving Credit Advance
and other sums owing by the Borrowers under this Agreement and all payments in
respect thereof made by the Borrowers from time to time. The control account for
the Overdraft Facility shall be maintained by the Overdraft Bank and the control
account for the Swingline Facility shall be maintained by the Swingline Bank.
The control accounts shall, in the absence of manifest error, be prima facie
evidence of the amount from time to time owing by the Borrowers under this
Agreement.
10.11 Partial payments
If, on any date on which a payment is due to be made by the Borrowers under
this Agreement and/or the Security Documents, the amount received by the Agent
from the Borrowers falls short of the total amount of the payment due to be made
by the Borrowers on such date then, without prejudice to any rights or remedies
available to the Agent and the Banks under this Agreement and/or the Security
Documents, the Agent shall apply the amount actually received from the Borrowers
in or towards discharge of the obligations of the Borrowers under this Agreement
in the following order, notwithstanding any appropriation made, or purported to
be made, by the Borrowers:
(a) firstly, in or towards payment, on a pro rata basis, of any unpaid
fees, costs and expenses of the Agent and/or the Security Trustee
under this Agreement and/or the Security Documents;
(b) secondly, in or towards payment to the Arrangers of any portion of the
arrangement fee payable under clause 9(1)(a) remains unpaid;
(c) thirdly, in or towards payment to the Swingline Bank and the Overdraft
Bank, on a pro rata basis, of any Swingline Bank Fee and Overdraft
Bank Fee payable under clauses 9.1(d), (e) and (f) which remains
unpaid;
(d) fourthly, in or towards payment to the Banks, on a pro rata basis, of
any accrued commitment commission payable under clause 9.(1)(c) which
shall have become due and payable but remains unpaid;
(e) fifthly, in or towards payment to the Banks, the Swingline Bank and
the Overdraft Bank, on a pro rata basis, of any accrued interest or
Swingline Letter of Credit Commission which shall have become due and
payable but remains unpaid;
(f) sixthly, in or towards payment to the Banks, the Swingline Bank and
the Overdraft Bank, on a pro rata basis, of any principal which shall
have become due and payable but remains unpaid; and
(g) seventhly, in or towards payment of any other sum which shall have
become due but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro rata basis).
The order of application set out in this clause 10.11(d) - (g) shall be
varied by the Agent if the Banks so direct, without any reference to, or consent
or approval from, the Borrowers.
10.12 Calculations
All interest and other payments of an annual nature under this Agreement
shall accrue from day to day and be calculated on the basis of actual days
elapsed and (in the case of Sterling) a 365 day year and (in the case of
currencies other than Sterling) a 360 day year. In calculating the actual number
of days elapsed in a period which is one of a series of consecutive periods with
no interval between them or a period on the last day of which any payment falls
to be made in respect of such period, the first day of such period shall be
included but the last day excluded.
10.13 Certificates
Any certificate or determination of any Finance Party as to any rate of
interest or any amount payable under this Agreement shall, in the absence of
manifest error, be prima facie evidence of the rate of interest or amount
payable.
10.14 Effect of monetary union
If the country of any national currency in which any amount is expressed to
be payable under this Agreement participates in Economic and Monetary Union in
accordance with Article 109j of the Treaty, then:
(a) any amount expressed to be payable under this Agreement in that
national currency shall be made in that national currency or in euro,
as designated by the Agent after consultation with the Parent and the
Banks;
(b) any amount so required to be paid in euro shall be converted from that
national currency at the rate stipulated pursuant to Article 109l(4)
of the Treaty and payment of the amount in euro derived from such
conversion shall discharge the obligation of the relevant party to pay
such national currency amount in accordance with, and subject to, the
Regulation(s) made pursuant to Article 109l(4) of the Treaty;
(c) after consultation with the Parent and the Banks the Agent shall be
entitled to make such amendments to this Agreement as necessary to
take account of monetary union and any consequent changes in market
practices (whether as to the settlement or rounding of obligations,
the calculation of interest or otherwise howsoever) provided that such
amendments will not create obligations for the Borrowers which have an
overall financial impact that is materially more onerous than the
obligations created by this Agreement.
Any amendment so made to this Agreement by the Agent shall be promptly
notified to the Banks and the Parent by the Agent and shall be binding on all
the Finance Parties and all the Borrowers.
10.15 Continuation of the Conversion Advance in Sterling or euros
Where the Conversion Advance is outstanding during an Interest Period (the
"first period") in Sterling or euros, the Agent shall determine the equivalent
in Sterling or, as the case may be, euros of the Dollar Amount of the Conversion
Advance on the second Banking Day before the beginning of the succeeding
Interest Period and if such equivalent so determined falls short of the amount
of Sterling or, as the case may be, euros outstanding at the beginning of the
first period by more than 3 per cent the Parent shall forthwith pay to the Agent
for the account of the Banks an amount in Sterling or, as the case may be, euros
equal to such shortfall.
11 Representations and warranties
11.1 Representations and warranties
Each Borrower makes the following representations and warranties to each of
the Finance Parties:
(a) Due incorporation: the Obligors and the Material Subsidiaries are duly
established or incorporated (and in the case of a corporation
incorporated in the United States, validly existing and in good
standing) under the laws of the respective countries and/or (where
relevant) states of their incorporation as limited liability companies
and have power to carry on their respective businesses as they are now
being conducted and to own their respective property and other assets;
(b) Corporate power: each Obligor has power to execute, deliver and
perform its obligations under this Agreement and the Security
Documents to which it is a party and (in the case of the Borrowers) to
borrow the Commitments; all necessary corporate, shareholder and other
action has been taken (or, in the case of the Security Documents, will
be taken prior to their execution) to authorise the execution,
delivery and performance of the same and no limitation on the powers
of the Borrowers to borrow will be exceeded as a result of borrowings
under this Agreement or on the powers of the Guarantors to give
guarantees will be exceeded as a result of the Guarantees;
(c) Binding obligations: this Agreement constitutes and the Security
Documents, when executed and delivered will constitute, valid and
legally binding obligations of each Obligor which is a party thereto
enforceable in accordance with their respective terms, save as
disclosed in the qualifications to the relevant legal opinions
provided under part A of schedule 4;
(d) No conflict with other obligations: the execution and delivery of, the
borrowing of the Commitments and the performance of their obligations
under, and compliance with the provisions of, this Agreement by the
Borrowers and the Security Documents to which they are a party by each
Obligor will not (i) contravene, to any material extent, any existing
applicable law, statute, rule or regulation or any judgment, decree or
permit to which they are subject, (ii) conflict with, to any material
extent, or result in any breach of any of the material terms of, or
constitute a material default under, any agreement or other instrument
to which any Obligor is a party or is subject or by which it or any of
its property is bound, (iii) contravene or conflict with any provision
of the Memorandum and Articles of Association, Articles of
Incorporation, Bye-laws, Statutes or other constitutional documents of
any Obligor or (iv) result in the creation or imposition of or oblige
any Obligor to create any Encumbrance (other than a Permitted
Encumbrance) on any of its undertakings, assets, rights or revenues;
(e) Consents obtained: every material consent from, authorisation, licence
or approval of, or registration with or declaration to, governmental
or public bodies or authorities or courts required by any Obligor to
authorise, or required by any Obligor in connection with, the
execution, delivery, validity, enforceability or admissibility in
evidence of this Agreement and the Security Documents to which it is a
party or the performance by any Obligor of its obligations under this
Agreement and the Security Documents to which it is a party has been
obtained or made (or, in the case of the Security Documents, will be
obtained or made, as the case may be, prior to their execution) and is
(or will be) in full force and effect in all material respects and
there has been no default in the observance of the material conditions
or restrictions (if any) imposed in, or in connection with, any of the
same;
(f) No filings required: any notarisation, filing, recording, registration
or enrolment in any court, public office or elsewhere and any stamp,
registration or similar tax or charge payable on or in relation to
this Agreement or any of the Security Documents necessary to ensure
the legality, validity, enforceability or admissibility in evidence of
this Agreement or any of the Security Documents has been made or paid,
as the case may be (or, in the case of the Security Documents, will be
made or paid, as the case may be, prior to their execution), and this
Agreement and the Security Documents are in proper form for their
enforcement in the courts of England or of any jurisdiction whose laws
are expressed to govern the relevant Security Document;
(g) No litigation: no litigation, arbitration or administrative proceeding
is taking place, pending or, to the knowledge of the directors of any
Obligor or Material Subsidiary, threatened against any member of the
Group which would or is reasonably likely, in the opinion of the Agent
(acting reasonably), if adversely determined to have a Material
Adverse Effect;
(h) No defaults: no member of the Group is (nor would with the giving of
notice or lapse of time or the satisfaction of any other condition or
any combination thereof be) in breach of or in default under any
agreement relating to Borrowed Money to which it is a party or by
which it may be bound (unless the aggregate principal amount of the
Borrowed Money pursuant to the agreements which have been breached is
less than or equal to (pound)1,000,000 or the equivalent in the
currencies in which the sums are payable) and no other Default has
occurred and is continuing;
(i) Financial statements correct and complete: the then latest audited
consolidated financial statements of the Group in respect of the
relevant Fiscal Year as delivered to the Agent under clause 12.1(e)
have been prepared in accordance with generally accepted accounting
principles and practices in the United Kingdom which have been
consistently applied and present fairly and accurately the
consolidated financial position of the Group as at the date to which
such financial statements were made up and the consolidated results of
the operations of the Group for the relevant Fiscal Year ended on such
date and, as at such date, no member of the Group had any significant
liabilities (contingent or otherwise) or any losses which are required
to be and which are not disclosed by, or reserved against or provided
for in, such financial statements;
(j) Information Memorandum: all factual statements contained in the
Information Memorandum are true and accurate in all material respects
as at the date of the Information Memorandum and not misleading in any
material respect and all expressions of opinion contained therein
genuinely reflect the opinions of the directors of the Parent as at
such date and are based on reasonable assumptions; all reasonable
enquiries as at the date of the Information Memorandum have been made
as at that date to verify the facts and statements contained therein;
all projections and forecasts contained therein and the assumptions on
which such projections and forecasts are or, as the case may be, will
be based are arrived at after due and careful consideration and
enquiry and do or, as the case may be, will represent the views of the
directors of the Parent as at the date of the Information Memorandum;
and to the best of the knowledge of the directors of the Parent there
are or, as the case may be, will be no other facts the omission of
which would make any fact or statement therein misleading in any
material respect as at that date (provided that so far as the above
representation relates to matters concerning the D Group or Waterloo
Group, it shall be qualified by the best of knowledge of the directors
of the Parent);
(k) Choice of law: the choice by the relevant Obligors of English law to
govern this Agreement and the Security Documents to which they are a
party (to the extent that the same are expressed to be governed by
English law) and the submission by the relevant Obligors to the
non-exclusive jurisdiction of the High Court of Justice in England (to
the extent that the relevant Obligors so submit) are valid and
binding;
(l) No withholding Taxes: (on the basis that all Banks are Qualifying
Banks at the date of this Agreement and that any Bank required to do
so and the Agent has provided the requisite tax forms pursuant to
clause 10.8) no Taxes are imposed by withholding or otherwise on any
payment to be made by any Obligor under this Agreement or any Security
Document or are imposed on or by virtue of the execution or delivery
by any Obligor of this Agreement or any Security Document to which it
is a party or any document or instrument to be executed or delivered
under this Agreement or any Security Document to which it is a party;
(m) Compliance with consents and licences: every material consent,
authorisation, licence or approval required by any Obligor or Material
Subsidiary in connection with the conduct of its business and the
ownership, use, exploitation or occupation of their respective
property and assets has been obtained and is in full force and effect
in all material respects and there has been no default in the
observance of any of the material conditions and restrictions (if any)
imposed in, or in connection with, any of the same and, to the
knowledge of the directors of each Obligor or Material Subsidiary, no
circumstances have arisen whereby any material remedial action is
likely to be required to be taken by, or at the expense of, any
Obligor or Material Subsidiary under or pursuant to any law or
regulation applicable to the business, property or assets of any
Obligor or Material Subsidiary;
(n) Ownership of assets: all assets which are necessary for the business
of the Group are beneficially owned, licensed or leased by the
relevant members of the Group free and clear of any Encumbrance other
than a Permitted Encumbrance;
(o) Group Structure Book: set forth in the Group Structure Book is a
substantially complete and accurate representation of the structure
and members of the Group as at the date of this Agreement;
(p) Margin stock: no member of the Group is engaged principally or as one
of its major activities in the business of extending credit for the
purpose of purchasing or carrying margin stock and none of the
proceeds of any drawing under any of the Facilities will be or has
been used, directly or indirectly, to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or
carrying margin stock;
(q) Not an investment company: (in the case of each US Borrower) it is not
an "investment company" as defined in the United States Investment
Company Act of 1940 nor is it subject to any United States federal or
state statute or regulation limiting its ability to incur Borrower
Money; and
(r) ERISA: none of the Parent or the ERISA Affiliates are making or
accruing an obligation to make contributions or has within any of the
five calendar years immediately preceding the date of this Agreement
made or accrued an obligation to make contributions to any
Multiemployer Plan; each Plan is in compliance in all material
respects with ERISA and the Code; each of the Parent and the ERISA
Affiliates has made all contributions except as would not result in a
material liability to or under each such Plan required by law within
the applicable time limits prescribed thereby, the terms of such Plan,
or any contract or agreement requiring contributions to a Plan, and
neither the Parent nor any of the ERISA Affiliates has incurred or
reasonably expects to incur any material liability to PBGC other than
for premiums; and
(s) Intellectual Property Rights
(i) the Intellectual Property Rights owned by any member of the Group
which are material in the context of the Group as a whole are
free from any Encumbrance other than Permitted Encumbrances and
any other rights or interests in favour of third parties (save
for those permitted by this Agreement) and any other Intellectual
Property Rights owned by any member of the Group are free from
any Encumbrance and any other rights or interests in favour of
third parties other than Permitted Encumbrances, save as
permitted either in the ordinary course of business or which
would not or are not reasonably likely to otherwise have a
Material Adverse Effect and save for those created or to be
created by or pursuant to the Security Documents or permitted by
this Agreement;
(ii) the Intellectual Property Rights owned by or licensed to each
member of the Group are all the Intellectual Property Rights
required by them to carry on their respective businesses, other
than Intellectual Property Rights the absence of rights to which
would have no Material Adverse Effect and no member of the Group
in carrying on its business (so far as the directors of the
Parent are aware) infringes any Intellectual Property Rights of
any third party in any respect where such infringement would
have, or is reasonably likely (in the opinion of the Agent acting
on the instructions of the Majority Banks, acting reasonably) to
have, a Material Adverse Effect;
(iii) no Intellectual Property Rights which are material in the
context of the Group as a whole owned by any member of the Group
are, to the knowledge of the directors of the Parent, being
infringed, which infringement would have, or is reasonably likely
(in the opinion of the Agent acting on the instructions of the
Majority Banks, acting reasonably) to have, a Material Adverse
Effect; and
(iv) no member of the Group has any knowledge, nor is it aware of any
claim, that it is or is reasonably likely to be liable to any
person for any material copyright infringement of any nature
whatsoever as a result of the operation of its business, which
infringement would have, or is reasonably likely (in the opinion
of the Agent acting on the instructions of the Majority Banks,
acting reasonably) to have, a Material Adverse Effect;
(t) Year 2000 compliance: the Parent and the Material Subsidiaries have
implemented a Year 2000 compliance programme which is in accordance
with the practice of prudent companies engaged in businesses similar
to those of the Parent and the Material Subsidiaries and, in
accordance with such programme, have allocated such resources as are
believed (acting reasonably) to be necessary to ensure that all
Computer Systems used by the Parent and the Material Subsidiaries for
the purpose of, and material to, their respective businesses will be
Millennium Compliant in accordance with the British Standards
Institute definition of Year 2000 Conformant Requirements DISC PD
2000-1: 1998 by December 1999;
(u) Material Adverse Effect: since 31 December 1998 there has been no
development or event which has had or would reasonably be expected to
have a Material Adverse Effect;
(v) Due Diligence:
(i) (as at the date of each relevant report) the facts stated in the
D Due Diligence or the Waterloo Information Package were, to the
best of the knowledge of the directors of the Parent true and
accurate in all material respects and not misleading in any
material respect;
(ii) to the best of the knowledge of the directors of the Parent,
there are no other facts the omission of which would make any
fact or statement in the D Due Diligence or the Waterloo
Information Package misleading in any material respect as at the
date of such due diligence or information; and to the best of the
knowledge of the directors of the Parent nothing has occurred
since the respective dates of each of the reports and other
documents comprising the D Due Diligence or the Waterloo
Information Package which would be reasonably likely to render
any fact stated in the D Due Diligence or the Waterloo
Information Package untrue or misleading in any material respect
in the context of the transactions contemplated hereby;
(w) Environmental matters
(i) the Parent is in compliance with the undertakings set out in
clause 12.1(q), in each case in respect of all members of the
Group;
(ii) no member of the Group has received notice of any Environmental
Claim and no member of the Group is in breach of any
Environmental Law or any Environmental Licence to the extent that
the same would be reasonably likely in the opinion of the Agent
(acting reasonably) to have a Material Adverse Effect; and
(iii) there is no Environmental Claim pending or to the knowledge of
the directors of any Obligor or a Material Subsidiary threatened
against any member of the Group which, if adversely to its
knowledge determined, would be reasonably likely in the opinion
of the Agent (acting reasonably) to have a Material Adverse
Effect.
11.2 Repetition
The representations and warranties in clause 11.1 (other than clauses
11.1(e), 11.1(g), 11.1(h), 11.1(j), 11.1(l), 11.1(m), 11.1(n), 11.1(o), 11.1(s),
11.1(t), 11.1(u), 11.1(v) and 11.1(w) (the "excluded representations and
warranties") (and so that the representation and warranty in clause 11.1(i)
shall for this purpose refer to the then latest audited financial statements
delivered to the Agent under clause 12.1(e)) shall be deemed to be repeated by
each Borrower on and as of each Drawdown Date and each Repayment Date as if made
with reference to the facts and circumstances existing on each such day.
12 Undertakings
12.1 Positive undertakings
Each Borrower undertakes with each of the Finance Parties that, from the
date of this Agreement and so long as any moneys are owing under this Agreement
or remain available for drawing by the Borrowers, it will (save where permitted
to do otherwise by the prior written consent of the Agent, acting upon the
instructions of the Majority Banks):
(a) Notice of Default
(i) (in the case of the Parent) promptly upon becoming aware of the
same inform the Agent of any occurrence which would or is
reasonably likely in its opinion to have a Material Adverse
Effect; and
(ii) (in the case of each Borrower) promptly upon becoming aware of
the same inform the Agent of any Default;
(b) Consents and licences: without prejudice to clauses 3 and 11.1, obtain
or cause to be obtained, maintain in full force and effect and comply
in all material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every material consent,
authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and
things which may from time to time be necessary under applicable law
for the continued due performance of all its obligations under this
Agreement, and its obligations and the obligations of its Subsidiaries
under the Security Documents to which it or any of its Subsidiaries is
a party, in the case of such Security Documents, prior to the
execution of such Security Documents;
(c) Use of proceeds: use the proceeds of drawings under this Agreement
exclusively for the respective purposes specified in clause 1.1;
(d) Pari passu: ensure that its obligations under this Agreement shall,
without prejudice to the provisions of clause 12.2, at all times rank
at least pari passu with all its other present and future unsecured
and unsubordinated Indebtedness with the exception of any obligations
which are mandatorily preferred by law and not by contract;
(e) Financial statements: (in the case of the Parent) prepare consolidated
financial statements for the Group in accordance with generally
accepted accounting principles and practices in the United Kingdom
consistently applied in respect of each Fiscal Year and cause the same
to be reported on by its Auditors and prepare unaudited consolidated
financial statements in respect of each Fiscal Half-Year ending 30th
June (interims) and each Fiscal Year (the preliminaries) on the same
basis as the annual statements and deliver sufficient copies of the
same to the Agent for distribution to all the Banks as soon as
practicable but not later than 150 days (in the case of audited
financial statements) or 90 days (in the case of unaudited financial
statements) after the end of the financial period to which they
relate.
If, as a result of changes in accounting principles and practices
generally, any financial statements of the Group delivered or to be
delivered to the Agent under this clause 12.1(e) are not to be or, as
the case may be, have not been prepared in accordance with the
Original Accounting Principles, the Parent shall deliver to the Agent
details of such adjustments as need to be made to the figures used in
the calculation of the financial covenants contained in clause 13.1 to
bring them into line with the Original Accounting Principles to the
extent that such adjustments are required for the purposes of
determining compliance (or otherwise) with the provisions of clause
13.1.
On the request of the Parent, the Parent and the Agent (acting on the
instructions of the Majority Banks), shall negotiate in good faith for
a period of up to 28 days with a view to agreeing such amendments to
the covenants in clause 13.1 and/or the definitions of the terms used
in them as are necessary to give the Banks at least the same
protection to that provided at the date of this Agreement but which
amendments are no more onerous than the terms of this Agreement at the
date of signing. If amendments are agreed by the Parent and the Agent
(with the approval of the Majority Banks), those amendments shall take
effect in accordance with the terms of that agreement;
(f) Quarterly Management Accounts: (in the case of the Parent) in respect
of each Fiscal Quarter prepare unaudited consolidated Quarterly
Management Accounts for the Group in each case containing:
(i) quarterly historic profit and loss accounts prepared on a
consolidated basis including financial analysis by profit
centres, by reference to exchange rates used in the then current
annual budget for that Fiscal Year in respect of (a) such Fiscal
Quarter and (b) that Fiscal Year to that date together with, in
each case, a comparison of actual performance with (x)
performance projected by the annual budget for that Fiscal Year;
and (y) performance during the equivalent Fiscal Quarter during
the immediately preceding Fiscal Year, each such comparison to
include for the Group as a whole the profit and loss accounts for
such period, such comparisons to be accompanied by an explanation
of the reasons for the major differences between actual and
projected performance; and
(ii) a breakdown of major accounts gains and losses during each such
Fiscal Quarter by members of the Group;
or omitting any such information or detail or containing such other
information or to such other level of detail as may, from time to
time, be approved by the Agent (acting on the instructions of the
Majority Banks, acting reasonably) in writing and deliver a copy of
the same to the Agent for distribution to all of the Banks as soon as
practicable but not later than 40 days after the Fiscal Quarter to
which they relate;
(g) Delivery of reports: deliver to the Agent, for distribution to the
Banks, sufficient copies for all the Banks of each of the following
documents, in each case at the time of issue thereof or (in the case
of the Compliance Certificates referred to in clause 12.1(g)(ii))
together with the financial statements prepared pursuant to clause
12.1(e) in respect of the financial period to which such certificate
relates:
(i) every report, circular, notice or like document sent by the
Parent to its shareholders or by the Parent or Obligor to its
creditors generally; and
(ii) a Compliance Certificate issued by an Authorised Officer, such
Compliance Certificate to be issued without personal liability on
the part of the person named therein as issuer, stating that the
Parent as at the end of the relevant period was in compliance
with the covenants and undertakings in clause 13.1 (or if it was
not in compliance indicating the extent of the breach);
(h) Provision of further information: provide the Agent with such
financial and other information concerning the Group and its affairs
as the Agent or any Bank (acting through the Agent) may from time to
time reasonably require;
(i) Insurance: insure and, in the case of the Parent, procure that each of
its Material Subsidiaries will insure and keep insured all its
properties and assets with underwriters or insurance companies of
repute to such extent and against such risks as prudent companies
engaged in businesses similar to those of the relevant member of the
Group normally insure;
(j) Pension schemes: contribute (or, in the case of the Parent, procure
that the members of the Group contribute) to the pension schemes for
the time being applying to their employees in the US, except to the
extent it could not result in material liability, and elsewhere at the
rate required of them under all applicable laws or, if greater, in
accordance with the terms governing such pension schemes provided that
nothing in the Agreement shall prevent a member of the Group
terminating its liability to contribute to a pension scheme in
accordance with its terms, amending a pension scheme and/or
establishing new pension arrangements or amending a pension scheme;
(k) Compliance with laws and regulations: comply and, in the case of the
Parent, procure that the Material Subsidiaries and other Obligors
comply, with the terms and conditions of all laws, regulations,
agreements, licences and concessions material to the carrying on of
its business;
(l) Interest rate hedging and foreign exchange hedging: in the case of the
Parent, ensure that with effect from the First Drawdown Date the
Hedging Strategy is implemented by the entry into of appropriate
Derivatives Contracts from time to time and will ensure that no member
of the Group enters into any other Derivatives Contract which is
speculative or does not relate to the hedging of exposures or
liabilities of members of the Group incurred in the ordinary course of
trading;
(m) ERISA:
(i) promptly and in any event within thirty days after the filing
thereof with the Internal Revenue Service of the United States,
to deliver to the Agent copies of each Schedule B (Actuarial
Information) to the Annual Report (IRS Form 5500 Series) if
required with respect to each Plan;
(ii) promptly and in any event within ten Banking Days after any
Obligor knows or has reason to know that any ERISA Event (i) has
occurred or (ii) will occur in the case of any ERISA Event which
requires advance notice under Section 4043(b)(3) of ERISA, to
deliver to the Agent a statement of the treasurer or chief
financial officer of the Parent or such other member of the Group
or ERISA Affiliate describing such ERISA Event and the action, if
any, which such member of the Group or such ERISA Affiliate
proposes to take with respect thereto;
(iii) promptly and in any event within five Banking Days after receipt
thereof by the Obligor or ten Banking Days after receipt thereof
by any member of the Group or any ERISA Affiliate other than the
Obligor, to deliver to the Agent copies of each notice from PBGC
stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan; and
(iv) ensure that, during the term of this Agreement, neither any
Subsidiary incorporated in the United States nor any ERISA
Affiliate shall agree to contribute, or assume any obligation to
contribute, to any Multiemployer Plan without notifying the
Majority Banks;
(n) Margin Stock: ensure that no amounts raised under this Agreement will
be used, directly or indirectly, to purchase or carry margin stock;
(o) Guarantees:
(i) subject to clause 12.1(o)(ii), in the case of the Parent procure
unless and to the extent that such execution and delivery and
granting of a Guarantee would be unavoidably unlawful or is
prohibited by statute or beyond the corporate power of the
company or corporation concerned (and then only if such corporate
power cannot be modified or extended to allow such execution,
delivery and granting of security) or would be reasonably likely
to result in the directors of the company or corporation
concerned incurring actual personal liabilities that each
Material Subsidiary incorporated in England and Wales and which
has not already entered into a Guarantee, promptly upon becoming
a Material Subsidiary or becoming a member of the Group (whether
a Subsidiary becoming a member of the Group is a Material
Subsidiary shall be tested at the time that it becomes a member
of the Group by reference to the financial statements of that
Subsidiary for the previous 12 calendar months, and the Parent
undertakes with each of the Finance Parties to procure that on an
acquisition of a Subsidiary sufficient financial information is
delivered to the Agent to determine compliance or otherwise with
this clause 12.1(o)), executes and delivers a Guarantee and a
deed supplemental to the Security Trust Deed and provides the
Agent with such documents and evidence as are set out in part C
of schedule 4;
(ii) the Parent shall only be obliged to use reasonable endeavours to
procure the provision of a guarantee by a Material Subsidiary
pursuant to clause 12.1(o)(i), where the Parent has notified the
Agent that, in good faith, it believes it will not be
commercially practicable to obtain such guarantee;
(p) Preference shares: redeem preference shares no earlier than their
stated maturity;
(q) Environmental: (and will procure that each other member of the Group
will) comply with all Environmental Laws and Environmental Licences
applicable to its business to the extent that a failure to so comply
would be reasonably expected to have a Material Adverse Effect; and
(r) Authorised Officers: ensure that any replacement or new Authorised
Officer has provided the Agent with evidence satisfactory to it of
such new officer's authority and a specimen of his signature prior to
signing any Compliance Certificates, Drawdown Notices, L/C Application
or other notices, requests or confirmations referred to in this
Agreement or relating to the facilities granted pursuant to this
Agreement.
12.2 Negative undertakings
Each Borrower undertakes with each of the Finance Parties that, from the
date of this Agreement and so long as any moneys are owing under this Agreement
or remain available for drawing by the Borrowers, without the prior written
consent of the Agent acting on the instructions of the Majority Banks:
(a) Negative pledge: save for Permitted Encumbrances it will not permit
any Encumbrance by any member of the Group to subsist, arise or be
created or extended over all or any part of its present or future
undertakings, assets, rights or revenues to secure or prefer any
present or future Indebtedness of any member of the Group or any other
person;
(b) No other Borrowed Money or finance transactions: it will not, and will
procure that no other member of the Group will, incur or permit to
exist on its behalf any obligations in respect of Borrowed Money,
including Finance Leases, whether on or off balance sheet, to any
person, or any sale and leaseback except:
(i) Borrowed Money arising from normal trade credit;
(ii) Borrowed Money in respect of receivables discounting facilities
provided that the aggregate amount of such Borrowed Money does
not exceed (pound)5,000,000 (or its equivalent) at any time;
(iii) the Borrowed Money of any persons acquired by any member of the
Group pursuant to the D Acquisition provided that such Borrowed
Money at no time exceeds Korean Won 28,600,000,000 (or its
equivalent) in aggregate in respect of receivables discounting
facilities (or any refinancing thereof by other receivables
discounting facilities), Korean Won 56,600,000,000 (or its
equivalent) in aggregate in respect of debenture stock issued by
D Ad Ltd (or Korean Won 28,600,000,000 (or its equivalent) in
aggregate in respect of any refinancing of such debenture stock)
and Korean Won 23,600,000,000 (or its equivalent) in aggregate in
respect of any other Borrowed Money of such acquired persons (or
any refinancing thereof);
(iv) any Borrowed Money of any person (other than pursuant to the D
Acquisition) acquired by any member of the Group after the date
of this Agreement, where such Borrowed Money was existing at the
time of such acquisition and was not incurred in contemplation
of, or in connection with, that acquisition and where no member
of the Group other than the person so acquired has any obligation
(actual or contingent) in respect of such Borrowed Money and
where such Borrowed Money is repaid or otherwise discharged
within 6 months of such acquisition;
(v) any Borrowed Money constituted by vendor loan notes issued or to
be issued by any member of the Waterloo Group in accordance with
the terms of any acquisition agreement entered into by a member
of the Waterloo Group prior to the date of this Agreement and any
bank guarantee facilities relating to such notes but not
exceeding in aggregate (pound)7,500,000;
(vi) Borrowed Money not exceeding Australian dollars 10,000,000 in
aggregate in respect of working capital facilities made available
in Australia to members of the Group;
(vii) Borrowed Money not exceeding(pound)5,000,000 (or its equivalent)
in respect of the cash management arrangements of the Group;
(viii) the Existing Facilities until prepaid in full from the proceeds
of the Facilities;
(ix) Indebtedness in respect of Finance Leases provided that the
aggregate amount of the principal element of the Indebtedness
under such Finance Leases does not exceed (pound)2,000,000 (or
its equivalent) at any time;
(x) Borrowed Money owed to members of the Zenith Group;
(xi) External Refinancings provided that the Aggregate Net Proceeds
thereof are applied in accordance with clause 8.6(a);
(xii) performance bonds issued by a member of the Group in respect of
the obligations of another member of the Group in the ordinary
course of trading;
(xiii) Derivatives Contracts entered into in accordance with clause
12.1(l);
(xiv) the Zenith Guarantee;
(xv) Borrowed Money owed by one member of the Group to another member
of the Group in the ordinary course of business;
(xvi) Borrowed Money of the D Group in respect of guarantees issued by
banks on behalf of the D Group to media authorities in Korea in
connection with bona fide arrangements for maintenance of media
accreditation;
(xvii) Borrowed Money in addition to that permitted by clauses
12.2(b)(i) to (xvi) not exceeding (pound)16,000,000 (or its
equivalent) in aggregate at any given time;
(c) No merger: save pursuant to the Waterloo Acquisition or with another
member of the Group pursuant to a Group reorganisation on a solvent
basis it will not permit an Obligor to merge with any other company or
person in circumstances where the Obligor ceases to exist or where the
obligations of such Obligor to the Finance Parties are detrimentally
affected;
(d) Disposals: it will not and will procure that none of its Subsidiaries
will sell, transfer, lend or otherwise dispose of or cease to exercise
direct control over any Restricted Assets (whether by any of a Trade
Sale, Flotation or otherwise and whether by one or a series of
transactions related or not) except that disposals are permitted to
the extent that:
(i) in any Fiscal Year, the Group does not dispose of Restricted
Assets the aggregate Relevant Value of which is more than 15 per
cent. of PBIT of the Group for the previous Fiscal Year
calculated by reference to the relevant audited consolidated
accounts of the Group. (For the purposes of this clause
12.2(d)(i), the "Relevant Value" of any Restricted Asset shall be
that part of PBIT of the Group attributable to that Restricted
Asset, calculated by reference to the 4 consecutive Fiscal
Quarters ending with the latest Fiscal Quarter for which
Quarterly Management Accounts have been delivered or, in the case
of any Restricted Assets which are interests in freehold or
leasehold property (or buildings and fixtures thereon), shall be
the consideration (including any deferred consideration or
purchase price adjustment receivable in the then current Fiscal
Year) for such disposal);
(ii) the disposal is a transfer from one member of the Group to
another member of the Group;
(iii) they are disposals of parts of the D Group as provided in the
M.O.U.;
(e) Loans and guarantees: save as permitted under the terms of this
Agreement, it will not, and will procure that none of its Subsidiaries
will, make any loans, grant any credit (except for normal trade credit
in the ordinary course of day-to-day trading) or give any guarantee
save for:
(i) Permitted Guarantees to or for the benefit of any person;
(ii) loans and guarantees in any Fiscal Year where the amount of such
loan or the amount of such guarantee (as the case may be), when
aggregated with the consideration for acquisitions or investments
over and above Permitted Acquisitions in such Fiscal Year which
are funded out of the proceeds of Borrowed Money, does not exceed
the relevant limits in clause 12.2(f) below; and
(iii) loans from one member of the Group to another entered into in
the ordinary course of business;
(f) Acquisitions: save for Permitted Acquisitions, it will not, and will
procure that none of its Subsidiaries will, acquire or make any
investment in any companies, joint ventures or partnerships or other
persons or acquire any businesses (or interests therein) funded in
whole or in part out of the proceeds of Borrowed Money:
(i) save for investments in, or the acquisition of, businesses and
companies which are related or complementary to the existing
businesses of the Group and where the consideration funded out of
the proceeds of Borrowed Money (which shall include for these
purposes the amount of any deferred consideration is so funded
and payable in the then current Fiscal Year and the amount of
Borrowed Money assumed by the Group as part of such acquisition)
payable by the Group in respect of all such acquisitions or
investments in any Fiscal Year when aggregated with all loans
made pursuant to clause 12.2(e)(ii) shall not
exceed(pound)12,500,000 (or its equivalent) ("acquisition
allowance");
(ii) save for investments in, or the acquisition of, shares in the
companies set out in the Group Structure Book as companies in
which a member of the Group holds voting shares as at the date of
the Group Structure Book; and
any part of the acquisition allowance unused in a Fiscal Year may
be carried forward to the next succeeding Fiscal Year only and
any unused carried forward acquisition allowance shall be lost
and deferred consideration for an acquisition shall be treated as
reducing the acquisition allowance for the Fiscal Year in which
it falls to be paid and shall not, when aggregated with the
acquisition consideration paid in such Fiscal Year, exceed the
acquisition allowance for that Fiscal Year;
(g) Change of business: it will not, and will procure that none of its
Subsidiaries will make any material change to the general nature of
its business which would constitute a material change in the nature of
the business of the Group taken as a whole from that carried on at the
date of this Agreement.
13 Financial covenants
13.1 Covenants
The Parent undertakes with each of the Finance Parties that so long as any
moneys are owing under this Agreement or any of the Commitments remain
outstanding it will:
(a) Net Interest Cover
ensure that on 30 June 2000 and on the last day of each Fiscal
Half-Year thereafter until the Fiscal Half-Year ending 31 December,
2001, the ratio of PBIT in respect of the immediately preceding 12
months to the Consolidated Net Interest Expenditure in respect of such
12 months is not less than 3.75:1 and on the last day of each Fiscal
Half-Year thereafter ensure that such ratio shall be not less than
4:1.
(b) Maximum Gross Debt: Adjusted PBIT
ensure that on 30 June 2000 and on the last day of each Fiscal
Half-Year falling thereafter until the Fiscal Half-Year ending 31
December, 2001, the ratio of Consolidated Gross Borrowings (calculated
on the basis of the average daily outstandings during the Fiscal
Half-Year ending on the last day of the relevant Fiscal Half-Year) to
Adjusted PBIT in respect of the immediately preceding 12 months shall
not be greater than 2.75:1 and on the last day of each Fiscal
Half-Year thereafter ensure that such ratio shall be not greater than
2.5:1.
13.2 Original Accounting Principles
The expressions used in clause 13 shall be calculated in accordance with
the Original Accounting Principles as adjusted in accordance with clause
12.1(e).
14 Events of Default
14.1 Events of Default
Each of the events and circumstances set out below is an Event of Default
(whether or not caused by any reason outside the control of any member of the
Group):
(a) Non-payment: any Borrower fails to pay any sum due from it under this
Agreement in the currency, at the time and in the manner stipulated in
this Agreement unless (a) such failure results only from technical
difficulties in the transfer of funds and (b) such failure is remedied
within two Banking Days of the due date; or
(b) Breach of certain obligations: any Borrower commits any breach of or
omits to observe any of the obligations or undertakings expressed to
be assumed by it under clauses 12.2 and 13.1; or
(c) Breach of other obligations: any Obligor commits any breach of or
omits to observe any of the obligations or undertakings expressed to
be assumed by it under this Agreement or the Security Documents to
which it is a party (other than failure by the Borrower to pay any sum
when due or any breach of the provisions of clauses 12.2 and 13.1)
and, in respect of any such breach or omission which in the reasonable
opinion of the Majority Banks is capable of remedy, such action as the
Agent or the Security Trustee, as relevant may require shall not have
been taken within 10 Banking Days of the Agent or the Security
Trustee, as relevant notifying the Parent of such default and of such
required action; or
(d) Misrepresentation: any representation or warranty made or deemed to be
made or repeated by or in respect of any Obligor in or pursuant to
this Agreement or the Security Documents or in any notice, certificate
or statement referred to in and to be delivered by any Obligor under
this Agreement or the Security Documents is or proves to have been
incorrect or misleading in any material respect at the date made or
deemed to be repeated in either case by reference to the facts and
circumstances existing on such day and the circumstances giving use to
such misrepresentation, if in the reasonable opinion of the Majority
Banks are capable of remedy, shall not have been remedied within 10
Banking Days of the Agent or the Security Trustee as relevant
notifying the Parent of such misrepresentation and of such required
remedy; or
(e) Cross-default: any Borrowed Money of any member of the Group is not
paid when due (or within any applicable grace period expressly
contained in the agreement relating to such Borrowed Money in its
original terms) or becomes (whether by declaration or automatically in
accordance with the relevant agreement or instrument constituting the
same) due and payable prior to the date when it would otherwise have
become due or any creditor of any member of the Group becomes entitled
to declare any Borrowed Money of any member of the Group so due and
payable or to require cash collateralisation or security for any such
Borrowed Money (save pursuant to the terms of this Agreement) or any
facility or commitment available to any member of the Group relating
to Borrowed Money is withdrawn, suspended or cancelled by reason of
any default (however described) of the company concerned unless the
amount, or aggregate amount at any one time, of all Borrowed Money in
relation to which any of the foregoing events shall have occurred and
be continuing is equal to or less than (pound)3,250,000 or its
equivalent in the currencies in which the sums are denominated and
payable; or
(f) Derivatives Contract default: any member of the Group fails to make
payment in relation to a Derivatives Contract of any sum equal to or
greater than (pound)3,250,000 in aggregate at any one time (or its
equivalent in the relevant currency of payment) on its due date
(taking into account any grace period permitted under the
documentation for that Derivatives Contract or, if none stated, within
5 Banking Days of the due date) or the counterparty to a Derivatives
Contract becomes entitled to terminate that Derivatives Contract early
by reason of default on the part of any member of the Group and the
Net Derivatives Liability in the aggregate payable under all affected
Derivatives Contracts at the relevant time is equal to or greater than
(pound)3,250,000 (or its equivalent in the relevant currency); or
(g) Legal process: any judgment or order made against any Obligor or
Material Subsidiary is not stayed or complied with within 14 days or a
creditor attaches or takes possession of, or a distress, execution,
sequestration or other process is levied or enforced upon or sued out
against, any material part of the undertakings, assets, rights or
revenues of any Obligor or Material Subsidiary and is not discharged
within 14 days; or
(h) Insolvency
(i) any Material Subsidiary or Obligor is deemed unable to pay its
debts within the meaning of section 123(1)(e) of the Insolvency
Act 1986 (but so that the words "it is proved to the satisfaction
of the court that" shall be deemed to be deleted) or stops or
suspends making payments (whether of principal or interest) with
respect to all or any class of its debts or announces an
intention to do so; or
(ii) any Material Subsidiary or Obligor incorporated in the United
States commences a voluntary case or other proceeding seeking
liquidation, reorganisation or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeks the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or makes a general assignment
for the benefit of creditors, or fails generally to pay its debts
as they become due, or takes any corporate action to authorise
any of the foregoing; or
(iii) an involuntary case or other proceeding is commenced against any
Material Subsidiary or Obligor incorporated in the United States
seeking liquidation, reorganisation or other relief with respect
to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary case or other proceeding remains undismissed and
unstayed for a period of 60 days; or an order for relief is
entered against any such Material Subsidiary or Obligor under the
US federal bankruptcy laws as now or hereafter in effect; or
(iv) a petition for insolvency proceedings in respect of the assets of
any Material Subsidiary or Obligor incorporated in Germany is
filed or threatened to be filed (such threat not to be frivolous)
or any event occurs which constitutes a cause for the initiation
of insolvency proceedings ("Eroffnungsgrund") as set forth in
Sec. 17 et seq. German Insolvency Code, in particular any such
Material Subsidiary or Obligor ceases to honour its obligations,
becomes insolvent or overindebted, admits its inability to meet
its obligations as they fall due or anything occurs which is
similar to the above under the laws of any jurisdiction; or
(i) Reduction or loss of capital: a meeting is convened by any Material
Subsidiary or Obligor for the purpose of passing any resolution to
purchase, reduce or redeem any of its share capital or to comply with
section 142 of the Companies Act 1985 other than (i) in connection
with the redemption of preference shares at their scheduled maturity
or (ii) with the written consent of the Agent (acting on the
instructions of the Majority Banks); or
(j) Winding up: any petition is presented or other step is taken for the
purpose of winding up any Material Subsidiary or Obligor (not being a
petition which such company can demonstrate to the satisfaction of the
Agent, by providing an opinion of leading counsel to that effect, is
frivolous, vexatious or an abuse of the process of the court or
relates to a claim to which such company has a good defence and which
is being vigorously contested by such company) or an order is made or
resolution passed for the winding up of any Material Subsidiary or
Obligor or a notice is issued convening a meeting for the purpose of
passing any such resolution, other than in relation to, or for the
purpose of, a solvent reorganisation on terms previously approved by
the Agent; or
(k) Administration: any petition is presented or other step is taken for
the purpose of the appointment of an administrator of any Material
Subsidiary or Obligor or an administration order is made in relation
to any Material Subsidiary or Obligor; or
(l) Appointment of receivers and managers: any administrative or other
receiver is appointed of any Material Subsidiary or Obligor or any
material part of its assets and/or undertakings or any other steps are
taken to enforce any Encumbrance over all or any part of the assets of
any Material Subsidiary or Obligor; or
(m) Compositions: any steps are taken, or negotiations commenced, by any
Material Subsidiary or Obligor or by any of its creditors with a view
to proposing any kind of composition, compromise or arrangement
involving such company and its creditors generally, other than for the
purposes of a solvent reorganisation on terms previously approved by
the Agent; or
(n) Analogous proceedings: there occurs, in relation to any Material
Subsidiary or Obligor, in any country or territory in which it carries
on business or to the jurisdiction of whose courts any part of its
assets is subject, any event which, in the reasonable opinion of the
Agent, appears in that country or territory to correspond with, or
have an effect equivalent or similar to, any of those mentioned in
clauses 14.1(g) to 14.1(m) (inclusive) or any Material Subsidiary or
Obligor otherwise becomes subject (other than merely as a result of
its existence), in any such country or territory, to the operation of
any law relating to insolvency, bankruptcy or liquidation; or
(o) Cessation of business: any Material Subsidiary or Obligor suspends or
ceases or threatens to suspend or cease to carry on all or a material
part of its business other than as otherwise permitted by this
Agreement or on terms previously agreed by the Agent; or
(p) Seizure: all or a material part of the undertaking, assets, rights or
revenues of, or shares or other ownership interests in, any Material
Subsidiary or Obligor are seized, nationalised, expropriated or
compulsorily acquired by or under the authority of any government
other than for full consideration; or
(q) Change of control: (i) any single person, or group of persons acting
in concert (as defined in the City Code on Take-overs and Mergers
dated 8th July 1993), acquires any interest in the equity share
capital of the Parent and, following such acquisition, holds more than
one-half in nominal value of the equity share capital of the Parent or
(ii) without the consent of the Agent (acting on the instructions of
the Majority Banks), any member of the Group disposes of any interests
in the equity share capital or voting share capital of an Obligor
(other than such a disposal to another member of the Group); or
(r) Unlawfulness: it becomes unlawful at any time for any Obligor to
perform all or any of its obligations under this Agreement or any of
the Security Documents to which it is a party; or
(s) Repudiation: any Obligor repudiates this Agreement or any of the
Security Documents to which it is a party or does or causes or permits
to be done any act or thing evidencing an intention to repudiate this
Agreement or any of the Security Documents; or
(t) Material Adverse Effect: there occurs any material adverse change in
the financial condition of the Group as a result of which any member
of the Group will not be able to comply with its payment obligations
under the Agreement or any of the Security Documents as and when they
fall to be satisfied; or
(u) Qualification of accounts: the auditors of the Parent qualify their
report on the audited consolidated financial statements of the Group
in any way except where the qualification has been agreed with the
Banks or where the remedy for the matter giving rise to the
qualification would have no material adverse effect on the results of
the Group for the period to which such accounts relate or on the
financial position of the Group as at the end of such period; or
(v) ERISA: with respect to any member of the Group incorporated in the
United States, a Plan shall be terminated pursuant to Section 4041(c)
of ERISA or PBGC shall institute proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or a member of the Group incorporated in the
United States shall incur any liability as a result of a prohibited
transaction within the meaning of Section 4975 of the Code or Section
406 of ERISA, or contributions required to be made to a Plan pursuant
to Section 412 of the Code shall not be made, which, in the case of
any of the events described in this paragraph (v), shall result in
liability of any member of the Group incorporated in the United States
or any ERISA Affiliate which has or can reasonably be expected to have
a Material Adverse Effect;] or
(w) Challenge to security: any Security Document is not at the date of
execution thereof or ceases to be effective in any material respect or
any Obligor shall in any way challenge, or any proceedings shall in
any way be brought to challenge the validity or enforceability of the
Security Documents.
14.2 Acceleration
The Agent if so requested by the Majority Banks shall, without prejudice to
any other rights of the Banks, at any time after the happening of an Event of
Default (and for so long as the Event of Default is continuing unremedied and
unwaived) by notice to the Parent declare that:
(a) the obligation of each Funder to make its Commitment available shall
be terminated, whereupon the Total Commitments shall be reduced to
zero forthwith; and/or
(b) all outstanding Advances and Utilisations and all interest and
commitment commission accrued and all other sums payable under this
Agreement (including full cash cover in respect of all outstanding
Swingline Letters of Credit) have become immediately due and payable
or have become due and payable on demand, whereupon the same shall,
immediately or in accordance with the terms of such notice, become so
due and payable; and/or
(c) the Security Documents (or any of them) have become enforceable
whereupon the same shall be enforceable, provided that immediately
upon the occurrence of any of the events specified in clauses
14.1(h)-(n) on or after the date of this Agreement in relation to any
member of the Group incorporated in the United States and whether or
not the Agent shall have previously made any declaration pursuant to
clauses 14.2(a) or 14.2(b) above, the events specified in such
paragraphs shall automatically occur as if the Agent had made a
declaration pursuant to such paragraphs and all Commitments shall be
cancelled and all amounts due under this Agreement shall immediately
become due and payable (including full cash cover in respect of all
outstanding Swingline Letters of Credit) together with all accrued
interest.
On or at any time after the making of any such declaration, the Agent or
the Swingline Bank (as the case may be) shall be entitled, to the exclusion of
the Borrowers, to select the duration of each period for the calculation of
interest in relation to any outstanding Advances or other sums payable under
this Agreement.
14.3 Demand basis
If, pursuant to clause 14.2(b), the Agent declares all outstanding Advances
and Utilisations to be due and payable on demand then the Agent may (and, if so
instructed by the Majority Banks, shall) at any time by written notice to the
Borrowers (a) call for repayment of the Advances and Utilisations on such date
as may be specified in such notice whereupon the Advances and Utilisations shall
become due and payable on the date so specified together with all interest and
commitment commission accrued and all other sums payable under this Agreement
(including full cash cover in respect of all outstanding Swingline Letters of
Credit) or (b) withdraw such declaration with effect from the date specified in
such notice.
15 Indemnities
15.1 Miscellaneous indemnities
Each Borrower shall on demand indemnify each Finance Party without
prejudice to any of their other rights under this Agreement and the Security
Documents, against any loss (including loss of Margin) or expense which such
Finance Party shall certify as sustained or incurred by it as a consequence of:
(a) any default in payment by any member of the Group of any sum under
this Agreement or any of the Security Documents when due;
(b) the occurrence of any other Event of Default;
(c) any prepayment of all or part of any Advance being made otherwise than
on its Repayment Date; or
(d) any Advance not being made or Swingline Letter of Credit not being
issued for any reason (excluding any default by the Agent, the
Swingline Bank, any Arranger or any Bank) after a Drawdown Notice or
an L/C Application has been given;
including, in any such case, but not limited to, any loss or expense sustained
or incurred by such Bank in maintaining or funding all or any part of its
Contribution or in liquidating or re-employing deposits from third parties
acquired or contracted for to fund all or any part of its Contribution or any
other amount owing to such Bank.
15.2 Currency of account; currency indemnity
No payment by a Borrower under this Agreement which is made in a currency
other than the currency ("Contractual Currency") in which such payment is
required to be made pursuant to this Agreement shall discharge the obligation in
respect of which it is made except to the extent of the net proceeds in the
Contractual Currency received by the Agent, the Swingline Bank or the Overdraft
Bank, as appropriate upon the sale of the currency so received, after taking
into account any premium and costs of exchange in connection with such sale. For
the avoidance of doubt no Finance Party shall be obliged to accept any such
payment in a currency other than the Contractual Currency nor shall any Finance
Party be liable to any Borrower for any loss or alleged loss arising from
fluctuations in exchange rates between the date on which such payment is so
received by the Agent, the Swingline Bank or the Overdraft Bank, as appropriate
and the date on which the Agent, the Swingline Bank or the Overdraft Bank, as
appropriate effects such sale, as to which the Agent, the Swingline Bank or the
Overdraft Bank, as appropriate shall (as against such Borrower) act in good
faith. If any sum due from a Borrower under this Agreement or any order or
judgment given or made in relation hereto is required to be converted from the
Contractual Currency or the currency in which the same is payable under such
order or judgment (the "first currency") into another currency (the "second
currency") for the purpose of (a) making or filing a claim or proof against a
Borrower, (b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation to this Agreement,
such Borrower shall indemnify and hold harmless the Finance Parties from and
against any loss suffered as a result of any difference between (i) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (ii) the rate or rates of exchange at
which such Finance Party may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
Any amount due from a Borrower under the indemnity contained in this clause 15.2
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement and the
term "rate of exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second currency.
15.3 ECB reserve requirements
The Parent shall on demand indemnify each Funder against any cost or loss
suffered by it as a result of complying with European System of Central Banks
reserve requirements to the extent such requirements relate to its participation
in the Facilities and are not recoverable by such Funder under clause 16.2.
16 Unlawfulness and increased costs; mitigation
16.1 Unlawfulness
If, after the date of this Agreement it is or becomes contrary to any
applicable law or regulation for any Funder to contribute to Advances or to
maintain its Commitment or fund its Contribution or to fulfil its obligations
under clause 6 or clause 7 or for the Swingline Bank to issue or perform its
obligations under Swingline Letters of Credit such Funder shall promptly,
through the Agent, notify the Parent of (i) the obligations which have been
rendered illegal, (ii) the date on which the illegality has or will take effect
and (iii) details of the relevant law or regulation whereupon:
(a) such Funder's Commitment under the Revolving Credit Facilities, the
Swingline Facility or the Overdraft Facility, as relevant shall be
reduced to zero but without prejudice to the obligations to indemnify
the Swingline Bank in relation to Swingline Letters of Credit and the
Overdraft Bank in relation to the Overdraft Facility pursuant to
clauses 6.12 and 7.2 which will remain in full force and effect until
the Swingline Bank or the Overdraft Bank, as relevant notifies such
Bank that it is satisfied that the Swingline Borrower or the Overdraft
Borrower, as relevant, has cash collateralised the amount of that
Funder's indemnification exposure in respect of outstanding Swingline
Letters of Credit or the Overdraft Facility; and
(b) the Borrowers shall be obliged to
(i) prepay the Contribution of such Funder on a future specified date
not being earlier than the latest date, if such illegality has
taken effect, permitted by the relevant law or regulation; and
(ii) pay an amount equivalent to, and in the currency of, such
indemnification exposure in respect of each outstanding Swingline
Letter of Credit and the Overdraft Facility, to the Agent as cash
collateral for such exposure; and
(c) (i) if it becomes so contrary to any law or regulation prior to the
proposed date of opening the Swingline Letter of Credit for the
Swingline Bank to open such Swingline Letter of Credit, the
obligations of the Swingline Bank to issue Swingline Letters of Credit
shall forthwith terminate; and
(ii) if it becomes so contrary to any law or regulation after the L/C
Issue Date for the Swingline Bank to perform its obligations under a
Swingline Letter of Credit then the Agent shall, at the request and on
behalf of the Swingline Bank, give notice to the relevant Borrower
requiring the relevant Borrower to cause the liability of the
Swingline Bank under that Swingline Letter of Credit to be discharged
in full to the satisfaction of the Swingline Bank.
Any prepayment pursuant to this clause 16.1 shall be made together with all
amounts referred to in clause 8.7.
16.2 Increased costs
If the result of any change in, or in the official interpretation or
application of, or the introduction of, any law or any regulation, request or
requirement (whether or not having the force of law, but, if not having the
force of law, with which the relevant Funder or, as the case may be, its holding
company habitually complies), including (without limitation) those relating to
Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and
special deposits, (including European System of Central Banks reserve
requirements) is to:
(a) subject any Funder to Taxes or change the basis of Taxation of any
Funder with respect to any payment under this Agreement (other than
Taxes or Taxation on the overall net income, profits or gains of such
Funder imposed in the jurisdiction in which its principal or lending
office under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, any Funder or
its holding company in making or keeping available all or part of such
Funder's Commitment or maintaining or funding all or part of such
Funder's Contribution; and/or
(c) reduce the amount payable or the effective return to any Funder under
this Agreement; and/or
(d) reduce any Funder's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Funder's obligations
under this Agreement; and/or
(e) require any Funder or its holding company to make a payment or forgo a
return calculated by reference to or on any amount received or
receivable by such Funder under this Agreement; and/or
(f) require any Funder or its holding company to incur or sustain a loss
(including a loss of future potential profits) by reason of being
obliged to deduct all or part of such Funder's Commitment, exposure
under Swingline Letters of Credit or Contribution from its capital for
regulatory purposes,
then and in each such case (but subject to clause 16.3):
(i) such Funder shall notify the Parent through the Agent in writing
of such event promptly upon its becoming aware of the same; and
(ii) the Borrowers shall on demand, made at any time whether or not
such Funder's Contribution or exposure under Swingline Letters of
Credit has been repaid, pay to the Agent for the account of such
Funder the amount which such Funder specifies (in a certificate
setting forth the basis of the computation of such amount but not
including any matters which such Funder or its holding company
regards as confidential) is required to compensate such Funder
and/or its holding company for such liability to Taxes, increased
or additional cost, reduction, payment, forgone return or loss.
For the purposes of this clause 16.2 and clause 16.4 "holding company" means, in
relation to a Funder, the company or entity (if any) within the consolidated
supervision of which such Funder is included.
16.3 Exceptions
Nothing in clause 16.2 shall entitle any Funder to receive any amount in
respect of compensation for any such liability to Taxes, increased or additional
cost, reduction, payment, forgone return or loss to the extent that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is the subject of an additional payment under clause 10.5; or
(c) arises as a consequence of (or of any law or regulation implementing)
(i) the proposals for international convergence of capital measurement
and capital standards published by the Basle Committee on Banking
Regulations and Supervisory Practices in July 1988 and/or (ii) any
applicable directive of the European Union (in each case) unless it
results from any change in, or in the interpretation or application
of, such proposals or any such applicable directive (or any law or
regulation implementing the same) occurring after the date hereof.
For the purposes of clause 16.3(c) the term "applicable directive" means
(exclusively) each of the Own Funds Directive (89/299/EEC of 17th April 1989)
and the Solvency Ratio Directive (89/647/EEC of 18th December 1989).
16.4 Mitigation
If circumstances arise which would, or would upon the giving of notice,
result in:
(a) the Borrowers being required to make an increased payment to any
Funder pursuant to clause 10.5;
(b) the reduction of any Funder's Commitment to zero or the Borrowers
being required to prepay any Funder's Contribution pursuant to clause
16.1; or
(c) the Borrowers being required to make a payment to any Funder to
compensate such Funder or its holding company for a liability to
Taxes, increased or additional cost, reduction, payment, forgone
return or loss pursuant to clause 16.2(ii);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrowers under clause 10 and this clause 16, such Funder
shall, in consultation with the Agent, endeavour to take such reasonable steps
(and/or, in the case of clause 16.2(ii) and where the increased or additional
cost, reduction, payment, forgone return or loss is that of its holding company,
endeavour to procure that its holding company takes such reasonable steps) as
are open to it (or, as the case may be, its holding company) to mitigate or
remove such circumstances (including (in the case of such Funder) the transfer
of its rights and obligations under this Agreement to another bank or financial
institution) unless the taking of such steps might (in the opinion of such
Funder) be prejudicial to such Funder (or, as the case may be, its holding
company) or be in conflict with such Funder's (or, as the case may be, its
holding company's) general banking policies or involve such Funder (or, as the
case may be, its holding company) in expense or an increased administrative
burden.
16.5 Regulation D Costs
Each US Borrower shall, within 10 Business Days (if it is the first
occasion on which the relevant Bank makes the demand) or 5 Business Days (in all
other cases) of demand by any Bank (through the Agent), pay to that Bank the
amount of any Regulation D Costs actually incurred by that Bank in respect of
its participation in any loan made by it to that US Borrower.
17 Set-off and pro rata payments
17.1 Set-off
Following an Event of Default which is continuing unremedied and unwaived
each Borrower authorises each Funder to apply any credit balance to which such
Borrower is then entitled on any account of such Borrower with such Funder at
any of its branches in or towards satisfaction of any sum then due and payable
from such Borrower to such Funder under this Agreement. For this purpose each
Funder is authorised to purchase with the moneys standing to the credit of such
account such other currencies as may be necessary to effect such application.
None of the Funders shall be obliged to exercise any right given to it by this
clause 17.1. Each Funder shall notify the Agent and the Parent (giving full
details) forthwith upon the exercise or purported exercise of any right of
set-off and the Agent shall inform the other Funders. Failure by any Funder to
notify the Agent and the Parent shall not affect the validity of the set-off.
17.2 Pro rata payments
(a) If at any time any Bank (the "Recovering Bank") receives or recovers
any amount owing to it by any Borrower under this Agreement by direct
payment, set-off or in any manner other than by payment through the
Agent pursuant to clause 10.1 or 10.11(not being a payment received
from a Substitute in such Bank's Contribution or any other payment of
an amount due to the Recovering Bank for its sole account pursuant to
clauses 8.5, 9, 10.5, 15.1, 15.2, 16.1 or 16.2), the Recovering Bank
shall, within two Banking Days of such receipt or recovery (a
"Relevant Receipt") notify the Agent of the amount of the Relevant
Receipt. If the Relevant Receipt exceeds the amount which the
Recovering Bank would have received if the Relevant Receipt had been
received by the Agent and distributed pursuant to clause 10.1 or 10.11
(as the case may be) then:
(i) within two Banking Days of demand by the Agent, the Recovering
Bank shall pay to the Agent an amount equal (or equivalent) to
the excess;
(ii) the Agent shall treat the excess amount so paid by the Recovering
Bank as if it were a payment made by the Borrowers and shall
distribute the same to the Banks (other than the Recovering Bank)
in accordance with clause 10.1 or clause 10.11, as the case may
be; and
(iii) as between the Borrowers and the Recovering Bank the excess
amount so re-distributed shall be treated as not having been paid
but the obligations of the Borrowers to the other Banks shall, to
the extent of the amount so re-distributed to them, be treated as
discharged.
(b) If any part of the Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank's pro rata share of the amount which has to
be refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Agent such information as the
Agent may from time to time request for the purpose of this clause
17.2.
(d) Notwithstanding the foregoing provisions of this clause 17.2 no
Recovering Bank shall be obliged to share any Relevant Receipt which
it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other party
which has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Bank are instituted by it
without prior notice having been given to such party through the
Agent).
17.3 No release
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 17.2 shall not release
any other Recovering Bank from any of its obligations or liabilities under
clause 17.2.
17.4 No charge
The provisions of this clause 17 shall not, and shall not be construed so
as to, constitute a charge by a Bank over all or any part of a sum received or
recovered by it in the circumstances mentioned in clause 17.2.
18 Assignment, substitution, lending offices, Additional Borrowers,
Additional Guarantors and Affiliates of Banks
18.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the
Finance Parties and their respective successors and permitted assigns.
18.2 No assignment by Borrower
None of the Borrowers may assign or otherwise transfer any of their rights
or obligations under this Agreement.
18.3 Substitution
Each Bank (an "Existing Bank") may transfer, by way of novation (but not by
way of assignment or otherwise), all or any part of its rights, benefits and/or
obligations under this Agreement to another Qualifying Bank (a "Substitute") in
minimum amounts of $7,500,000, with the consent in writing (a) of the Parent,
such consent not to be unreasonably withheld or delayed and (b) of the Swingline
Bank and the Overdraft Bank, such consent not to be unreasonably withheld or
delayed. Any such novation shall be effected upon not less than 5 Banking Days'
prior notice by delivery to the Agent of a duly completed Substitution
Certificate duly executed by the Existing Bank and the Substitute. On the
Transfer Date (as specified and defined in a Substitution Certificate so
executed and delivered), to the extent that the Commitment and Contribution of
the Existing Bank are expressed in a Substitution Certificate to be the subject
of the novation in favour of the Substitute effected pursuant to this clause
18.3, by virtue of the counter-signature of the Substitution Certificate by the
Agent (for itself, the Borrowers, the Guarantors, the Arrangers, the Banks, the
Swingline Bank, the Agent and the Security Trustee and the other parties to this
Agreement):
(a) the existing parties to this Agreement and the Existing Bank shall be
released from their respective obligations towards one another under
this Agreement ("discharged obligations") and their respective rights
against one another under this Agreement ("discharged rights") shall
be cancelled;
(b) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than such Existing Bank) shall assume obligations towards each other
which differ from the discharged obligations only insofar as they are
owed to or assumed by such Substitute instead of to or by such
Existing Bank; and
(c) the Substitute party to the relevant Substitution Certificate and the
existing parties to this Agreement and the Security Trust Deed (other
than such Existing Bank) shall acquire rights against each other which
differ from the discharged rights only insofar as they are exercisable
by or against such Substitute instead of by or against such Existing
Bank;
and, on such Transfer Date, the Substitute shall pay to the Agent a fee of
(pound)1,500, as to (pound)1,000 for the account of the Agent and as to
(pound)500 for the account of the Parent. The Agent shall promptly notify the
other Banks and the Parent of the receipt by it of any Substitution Certificate
and shall promptly deliver a copy of such Substitution Certificate to the
Parent. The portions of any such transfer fees which are for the account of the
Parent shall be paid by the Agent to the Parent in arrears at three monthly
intervals commencing three months after the date of this Agreement.
18.4 Limitation on certain obligations
(a) If, at the time of any novation or change in lending office by any
Funder circumstances exist which would oblige the Borrowers to pay to
the Substitute (or, in the case of change in lending office, the
relevant Funder) under clauses 10.1, 10.5 or 16 any sum in excess of
the sum (if any) which they could have been obliged to pay to that
Funder under the relevant clause in the absence of that novation or
change of lending office, the Borrowers shall not be obliged to pay
that excess;
(b) a Bank may not novate any of its rights to payment of interest in
respect of an Advance to a UK Borrower, other than to a Bank which is
a Qualifying Bank by virtue of paragraph (a) or (c) of the definition
of Qualifying Bank, as long as that Borrower remains a UK Borrower.
18.5 Reliance on Substitution Certificate
The Finance Parties, the Borrowers and the Guarantors shall be fully
entitled to rely on any Substitution Certificate delivered to the Agent in
accordance with the foregoing provisions of this clause 18 which is complete and
regular on its face as regards its contents and purportedly signed on behalf of
the relevant Existing Bank and the Substitute and none of the Finance Parties,
the Borrowers and the Guarantors shall have any liability or responsibility to
any party as a consequence of placing reliance on and acting in accordance with
any such Substitution Certificate if it proves to be the case that the same was
not authentic or duly authorised.
18.6 Authorisation of Agent
Each party to this Agreement irrevocably authorises the Agent to
counter-sign each Substitution Certificate on its behalf for the purposes of
clause 18.3 without any further consent of, or consultation with, such party
except, in the case of the Parent, the consent required pursuant to clause 18.3.
18.7 Construction of certain references
If any Funder novates all or any part of its rights, benefits and
obligations as provided in clause 18.3 all relevant references in this Agreement
to such Funder shall thereafter be construed as a reference to such Funder
and/or its Substitute to the extent of their respective interests.
18.8 Lending offices
Each Funder shall lend through its office at the address specified in
schedule 2 or, as the case may be, in any relevant Substitution Certificate or
through any other office of such Funder selected from time to time by such
Funder through which such Funder wishes to lend for the purposes of this
Agreement. If the office through which a Funder is lending is changed pursuant
to this clause 18.8, such Funder shall notify the Agent and the Borrowers
promptly of such change.
18.9 Disclosure of information
(a) Subject to clause 18.9(b), a Funder may disclose to a prospective
transferee or to any other person who may propose entering into
contractual relations with such Funder in relation to this Agreement
such information about the Borrowers as such Funder shall consider
appropriate;
(b) no Funder may disclose any information about any Borrower to an actual
or potential transferee or other person without the prior consent of
such Borrower (such consent not to be unreasonably withheld or
delayed) until such Funder has obtained from the actual or potential
transferee or other person an undertaking to the Funders and to the
Parent to keep such information confidential save as required by
statute or by a court of law or as may be required to be disclosed to
the Bank of England or similar monetary or regulatory authority in
accordance with whose instructions such bank, transferee or other
person is accustomed to acting or to its professional advisers on a
confidential basis or where such information is in the public domain;
(c) any information furnished pursuant to this Agreement to any Finance
Party shall be kept confidential by the recipient and the Finance
Parties hereby agree to keep the information confidential, save that
the provisions of this clause 18.9(c) shall not apply:
(i) to any information already known to the recipient;
(ii) to any information subsequently received by the recipient which
it would otherwise be free to disclose;
(iii) to any information which is or becomes public knowledge
otherwise than by reason of a breach of confidentiality by the
Finance Party concerned;
(iv) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court or order of any
governmental agency with whose instructions the recipient
habitually complies; and
(v) to any information disclosed to auditors or other professional
advisers who are subject to a duty of confidentiality or any
other person who undertakes with the Parent to keep the
information confidential.
18.10 Restrictions on novations
Where a Funder novates part of its rights, benefits and obligations
pursuant to clause 18.3, that Funder must novate equal fractions of its
Commitment and Contribution (if any) in respect of the Facilities and, if at the
time when such novation takes effect more than one Revolving Credit Advance is
outstanding, the novation of its Contribution shall take effect in respect of
the same fraction of each Revolving Credit Advance. The Substitution Certificate
relating to any such novation shall be completed accordingly.
18.11 Additional Borrowers and Additional Overdraft Borrowers
(a) If the Parent wishes one of its wholly-owned Subsidiaries to become an
Additional Borrower or an Additional Overdraft Borrower, then, with
the prior written approval of the Banks, it may deliver to the Agent
the documents listed in part D of schedule 4.
(b) On delivery of a Borrower Accession Agreement or an Overdraft Borrower
Accession Agreement duly executed by the relevant Subsidiary and the
Parent, the Subsidiary concerned will become an Additional Borrower or
an Additional Overdraft Borrower, as the case may be. However, it may
not utilise the Facilities (or, in the case of an Additional Overdraft
Borrower, the Overdraft Facility) until the Agent confirms to the
Banks and the Parent that it has received all the documents referred
to in paragraph (a) above in form and substance satisfactory to it,
which it shall do promptly.
(c) Delivery of a Borrower Accession Agreement, or an Overdraft Borrower
Accession Agreement, executed by the Subsidiary and the Parent,
constitutes confirmation by that Subsidiary and the Parent that the
representations and warranties set out in clause 11 (other than the
excluded representations and warranties) to be made by them on the
date of the Borrower Accession Agreement or the Overdraft Borrower
Accession Agreement are correct, as if made with reference to the
facts and circumstances then existing.
(d) The Finance Parties irrevocably authorise the Agent to execute any
duly executed Borrower Accession Agreement or Overdraft Accession
Agreement on their behalf, upon receipt of the prior written approval
of the Banks under paragraph (a) above.
18.12 Additional Guarantors
The Parent shall procure that, as soon as reasonably practicable after, but
in any event within 60 days of completion of the Waterloo Acquisition, each of
the companies listed in part C of schedule 1 will (but subject to clause 12.1(o)
except in respect of Healthworld Corporation Inc.) approve, implement, execute
and deliver to the Agent the items referred to in part C of schedule 4 to the
satisfaction of the Agent (unless and to the extent that such execution and
delivery would be unavoidably unlawful).
18.13 The Parent as Borrowers' agent
Each Borrower by its execution of this Agreement or an Accession
Certificate, as the case may be, irrevocably appoints and authorises the Parent:
(a) as agent for such Borrower to receive all notices, requests, demands
or other communications under this Agreement which shall, without
prejudice to any other effective mode of serving the same, be properly
served on the Borrower concerned if served on the Parent in accordance
with clause 20.1; and
(b) to give all notices (including Drawdown Notices) and instructions and
make such agreements (including, without limitation, any Borrower
Accession Certificate) expressed to be capable of being given or made
by such Borrower or the Borrowers in this Agreement notwithstanding
that they may affect such Borrower without further reference to, or
the consent of, such Borrower and such Borrower shall, as regards the
Finance Parties, be bound thereby as though such Borrower itself had
given such notice or instructions or made such agreement.
18.14 Amendments binding
Without prejudice to the other provisions of this Agreement each Borrower
hereby confirms that if the Parent and the Finance Parties or any of them enter
into any amendment or supplement to or restatement of this Agreement, the
Parent's execution of any such amendment or supplement or restatement, whether
or not expressly made or purportedly made on behalf of such Borrower, shall (to
the extent legally possible) bind such Borrower without the need to obtain any
confirmation or acknowledgement from such Borrower. For this purpose, each
Borrower, for the benefit of the Finance Parties, irrevocably designates,
appoints and empowers the Parent as its agent and attorney.
18.15 Affiliates of Banks
(a) A Bank may provide for an Affiliate (or branch) to participate either
(i) in all Revolving Credit Advances to any US Borrower or (ii) in all
Advances and Utilisations other than Revolving Credit Advances to any
US Borrower by:
(A) joining the relevant Affiliate (or branch) in as a Bank by means
of a Substitution Certificate in accordance with clause 18.3; and
(B) giving notice to the Agent and the Parent, detailing the
Revolving Credit Advances in which that Affiliate (or branch)
will participate.
In this event such Bank and its Affiliate (or branch):
(A) will be treated as having a single Commitment, but, for all
other purposes other than that mentioned in paragraph (b)
below, will be treated as separate Banks; and
(B) participate in Revolving Credit Advances in the manner
notified to the Agent and the Parent in accordance with
sub-paragraph (B) above.
(b) For the purposes of:
(i) compliance with clause 18.3; and
(ii) voting in connection with this Agreement or any Security
Document,
each Bank and its Affiliate (or branch) will be regarded as a single Bank.
19 Arranger, Agent, Security Trustee and Reference Banks
19.1 Appointment of Agent
Each Bank irrevocably appoints the Agent as its agent for the purposes of
this Agreement and any relevant Security Document and irrevocably authorises the
Agent (whether or not by or through employees or agents) to take such action on
such Bank's behalf and to exercise such rights, remedies, powers and discretions
as are specifically delegated to the Agent by this Agreement and/or the relevant
Security Document together with such powers and discretions as are reasonably
incidental thereto (but subject to any restrictions or limitations specified in
this Agreement). None of the Agent, the Swingline Bank, the Overdraft Bank, the
Arrangers or the Security Trustee shall, however, have any duties, obligations
or liabilities (whether fiduciary or otherwise) to the Banks beyond those
expressly stated in this Agreement or the Security Trust Deed.
19.2 Agent's actions
Any action taken by the Agent under or in relation to this Agreement and
any relevant Security Document with requisite authority, or on the basis of
appropriate instructions, received from the Majority Banks or all the Banks, as
the case may be (or as otherwise duly authorised), shall be binding on all the
Banks.
19.3 Agent's duties
The Agent shall:
(a) promptly notify each Bank of the contents of each notice, certificate
or other document received by the Agent from the Borrower under or
pursuant to clauses 12.1(a) and 12.1(h);
(b) (subject to the other provisions of this clause 19) take such action
or, as the case may be, refrain from taking such action with respect
to the exercise of any of its rights, remedies, powers and discretions
as agent, as the Majority Banks may reasonably direct; and
(c) serve as the Borrowers' agent solely for the purpose of this clause to
maintain a register (the "Register of Commitments") on which the Agent
will record the Commitments from time to time of each of the Banks,
the Advances made from time to time by each of the Banks and each
repayment in respect of the principal amount of such Advance of each
such Bank. The Agent will open the Register of Commitments on the date
of this Agreement and will enter into and record on the Register of
Commitments on such date the Commitments of all of the Banks as set
forth in schedule 2. Thereafter the Agent will enter into and record
on the Register of Commitments any and all changes to the Commitments
of any one or more Banks made pursuant to the provisions of this
Agreement, the addition of new Banks and the removal of Banks as a
result of substitutions pursuant to clause 18.3. With respect to any
Bank, the transfer of the Commitments of such Bank and the rights to
the principal of, interest on and fees with respect to any Advance
made pursuant to such Commitment shall not be effective until such
transfer is recorded on the Register of Commitments maintained by the
Agent with respect to ownership of such Commitments and Advances and
prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Advances shall remain owing to the
transferor. The registration of substitution or transfer of all or
part of any Commitments and Advances shall be recorded by the Agent on
the Register of Commitments only upon the acceptance by the Agent of a
properly executed and delivered Substitution Certificate.
19.4 Agent's rights
The Agent may:
(a) in the exercise of any right, remedy, power or discretion in relation
to any matter, or in any context, not expressly provided for by this
Agreement or any relevant Security Document, act or, as the case may
be, refrain from acting in accordance with the instructions of the
Majority Banks, and shall be fully protected in so doing;
(b) unless and until it shall have received directions from the Majority
Banks or all the Banks as applicable under this Agreement, take such
action, or refrain from taking such action in respect of a Default of
which the Agent has actual knowledge as it shall deem advisable in the
best interests of the Banks (but shall not be obliged to do so);
(c) refrain from acting in accordance with any instructions of the
Majority Banks to institute any legal proceedings arising out of or in
connection with this Agreement or any relevant Security Document until
it has been indemnified and/or secured to its satisfaction against any
and all costs, expenses or liabilities (including legal fees) which it
would or might incur as a result unless such costs, expenses or
liabilities result from the Agent's gross negligence or wilful
misconduct;
(d) deem and treat (i) each Bank as the person entitled to the benefit of
the Contribution of such Bank for all purposes of this Agreement
unless and until a Substitution Certificate shall have been filed with
the Agent, and (ii) the office set opposite the name of each Bank in
schedule 2 or, as the case may be, in any relevant Substitution
Certificate as such Bank's lending office unless and until a written
notice of change of lending office shall have been received by the
Agent; and the Agent may act upon any such notice unless and until the
same is superseded by a further such notice;
(e) rely as to matters of fact which might reasonably be expected to be
within the knowledge of a Borrower upon a certificate signed by any
director of that Borrower on behalf of that Borrower; and
(f) do anything which is in its opinion necessary or desirable to comply
with any law or regulation in any jurisdiction.
19.5 No liability of Arrangers, Security Trustee, Agent, Swingline Bank and
Overdraft Bank
None of the Arrangers, the Security Trustee, the Agent, the Swingline Bank,
Overdraft Bank or any of their respective employees and agents shall:
(a) be obliged to request any certificate or opinion under clause 12 or to
make any enquiry as to the use of the proceeds of the Facilities
unless (in the case of the Agent) so required in writing by any Bank,
in which case the Agent shall promptly make the appropriate request of
the Borrowers; or
(b) be obliged to make any enquiry as to any breach or default by any
Borrower in the performance or observance of any of the provisions of
this Agreement or any Security Document or as to the existence of a
Default unless (in the case of the Agent) the Agent has actual
knowledge thereof or has been notified in writing thereof by a Bank,
in which case the Agent shall promptly notify the Banks of the
relevant event or circumstance; or
(c) be obliged to enquire whether or not any representation or warranty
made by any member of the Group pursuant to this Agreement or any
Security Document is true; or
(d) be obliged to do anything (including, without limitation, disclosing
any document or information) which would, or might in its opinion, be
contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to any
person. For the purposes of this clause 19.5(d) the parties to this
Agreement acknowledge that no document delivered to the Agent pursuant
to the terms of this Agreement by any Borrower or any Guarantor is
subject to any duty of confidentiality which would restrict the
Agent's ability to deliver copies of the same to the Banks provided
that this clause 19.5(d) shall not otherwise affect the duty of the
Agent or the Banks to keep any confidential information supplied to it
or them by any member of the Group confidential; or
(e) be obliged to account to any Bank for any sum or the profit element of
any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of or in
connection with this Agreement or any Security Document other than on
the instructions of the Majority Banks; or
(g) be liable to any Bank for any action taken or omitted under or in
connection with this Agreement, the Facilities or any Security
Document unless caused by its gross negligence or wilful misconduct.
For the purposes of this clause 19.5 none of the Agent, the Swingline Bank, the
Overdraft Bank, the Arrangers or the Security Trustee shall be treated as having
actual knowledge of any matter of which the corporate finance or any other
division outside the agency or loan administration department of the person for
the time being acting as the Agent, the Arrangers or the Security Trustee may
become aware in the context of corporate finance, advisory or lending activities
from time to time undertaken by the Agent, the Swingline Bank, the Overdraft
Bank, the Arrangers or the Security Trustee for any member of the Group or any
other person which may be a trade competitor of any member of the Group or may
otherwise have commercial interests similar to those of any member of the Group.
19.6 Non-reliance on Arrangers, Security Trustee, Agent, Swingline Bank or
Overdraft Bank
Each Bank acknowledges that it has not relied on any statement, opinion,
forecast or other representation made by the Arrangers, the Security Trustee,
the Agent or the Swingline Bank or Overdraft Bank to induce it to enter into
this Agreement and that it has made and will continue to make, without reliance
on the Agent, the Swingline Bank, Overdraft Bank, the Security Trustee or any
Arranger and based on such documents as it considers appropriate, its own
appraisal of the creditworthiness of the members of the Group and its own
independent investigation of the financial condition, prospects and affairs of
the members of the Group in connection with the making and continuation of the
Facilities. None of the Security Trustee, the Arrangers, the Agent, the
Swingline Bank, the Overdraft Bank shall (except for documents and/or notices
which the Security Trustee, the Arrangers and/or the Agent (i) have agreed to
provide to the Banks or (ii) have received with sufficient copies for
distribution to the Banks) have any duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other information
with respect to any Borrower whether coming into its possession before the
making of any Advance or at any time or times thereafter, other than (in the
case of the Agent) as provided in clause 19.3(a).
19.7 No Responsibility on Arrangers, the Security Trustee, the Agent, the
Swingline Bank or the Overdraft Bank for any Borrower's performance
None of the Arrangers, the Security Trustee, the Agent, the Swingline Bank
or the Overdraft Bank shall have any responsibility or liability to any Bank:
(a) on account of the failure of any member of the Group to perform its
obligations under this Agreement or any Security Document; or
(b) for the financial condition of any member of the Group; or
(c) for the completeness or accuracy of any statements, representations or
warranties in this Agreement, any Security Document or the Information
Memorandum or any document delivered under this Agreement or any
Security Document; or
(d) for the execution, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of this Agreement, any
Security Document or any certificate, report or other document
executed or delivered under this Agreement or any Security Document;
or
(e) otherwise in connection with the Facilities or its negotiation or for
acting (or, as the case may be, refraining from acting) in accordance
with the instructions of the Majority Banks or all the Banks as
applicable under this Agreement.
19.8 Reliance on documents and professional advice
The Arrangers, the Security Trustee, the Agent, the Swingline Bank and the
Overdraft Bank shall be entitled to rely on any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person and shall be entitled to rely as to legal or other
professional matters on opinions and statements of any legal or other
professional advisers selected or approved by it (including those in the
Agent's, the Swingline Bank's, Overdraft Banks, the Security Trustee's or either
Arranger's employment).
19.9 Other dealings
Each of the Arrangers, the Security Trustee, the Agent, the Swingline Bank
and the Overdraft Bank may, without any liability to account to the Banks,
accept deposits from, lend money to, and generally engage in any kind of banking
or other business with, and provide advisory or other services to, any member of
the Group or any of their respective Subsidiaries or any of the Banks as if it
were not an Arranger, the Security Trustee, the Agent, the Swingline Bank or the
Overdraft Bank as the case may be.
19.10 Rights of Agent, Swingline Bank, Overdraft Bank, Security Trustee and
Arrangers as Bank; no partnership
With respect to its own Commitment and Contribution (if any) the Agent, the
Swingline Bank, Overdraft Bank, the Security Trustee and each Arranger shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not performing the duties and functions
delegated to it under this Agreement and the Security Documents and the term
"Banks" shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity as a Bank. This Agreement shall not and shall not be
construed so as to constitute a partnership between the parties or any of them.
19.11 Amendments; waivers
(a) Subject to clause 19.11(b), the Agent may, with the consent of the
Majority Banks (or if and to the extent expressly authorised by the
other provisions of this Agreement) and, if so instructed by the
Majority Banks, shall (i) agree amendments or modifications to this
Agreement with the Borrowers and/or (ii) vary or waive breaches of, or
defaults under, or otherwise excuse performance of, any provision of
this Agreement by any Borrower. Any such action so authorised and
effected by the Agent shall be documented in such manner as the Agent
shall (with the approval of the Majority Banks) determine, shall be
promptly notified to the Banks by the Agent and (without prejudice to
the generality of clause 19.2) shall be binding on all the Banks.
(b) Except with the prior written consent of all the Banks, the Agent
shall not have authority on behalf of the Banks to agree with the
Borrowers and the Guarantors any amendment or modification to this
Agreement or to grant waivers in respect of breaches or defaults or to
vary or excuse performance of or under this Agreement by any Borrower,
if the effect of such amendment, modification, waiver, variation or
excuse would be to (i) reduce the Margin, (ii) postpone the due date
or, save as expressly provided for in this Agreement, reduce the
amount of any payment of principal, interest, commitment commission or
other amount payable by any Borrower under this Agreement or reduction
of the Total Commitments, (iii) change the currency in which any
amount is payable by any Borrower under this Agreement, (iv) increase
any Bank's Commitment, (v) extend the Availability Period, (vi) change
the definition of "Majority Banks" in clause 1.2, (vii) change any
provision of this Agreement referred to in any other provision in
relation to which an amendment would require the consent of all the
Banks or which expressly or by implication requires the approval or
consent of all the Banks such that the relevant approval or consent
may be given otherwise than with the sanction of all the Banks, (viii)
change the order of distribution under clause 10.11, (ix) change
clause 17.2 or this clause 19.11 or (x) release any Guarantor from its
obligations under the Guarantee to which it is a party.
19.12 Reimbursement and indemnity by Banks
Each Bank shall reimburse the Security Trustee, the Agent and the Swingline
Bank and the Overdraft Bank (rateably in accordance with such Bank's Commitment
or Contribution), to the extent that the Security Trustee, the Agent, the
Swingline Bank or the Overdraft Bank (as the case may be) is not reimbursed by
the Borrowers, for the costs, charges and expenses incurred by the Security
Trustee, the Agent, the Swingline Bank or the Overdraft Bank in connection with
or in contemplation of, the enforcement or attempted enforcement of, or the
preservation or attempted preservation of any rights under, or in carrying out
its duties under, this Agreement and/or any Security Document including (in each
case) the fees and expenses of legal or other professional advisers except to
the extent that the costs, charges or expenses arise from the gross negligence
or wilful misconduct of the Agent, the Security Trustee, the Swingline Bank or
the Overdraft Bank. Each Bank shall on demand indemnify the Agent, the Security
Trustee, the Swingline Bank and the Overdraft Bank (rateably in accordance with
its Commitment or Contribution) against all liabilities, damages, costs and
claims whatsoever incurred by the Agent, the Security Trustee, the Swingline
Bank or the Overdraft Bank (as the case may be) in connection with this
Agreement or the performance of its duties under this Agreement and/or any
Security Document or any action taken or omitted by the Agent, the Security
Trustee or the Swingline Bank or the Overdraft Bank (as the case may be) under
this Agreement, unless such liabilities, damages, costs or claims arise from the
Agent's, the Security Trustee's, the Swingline Bank's or the Overdraft Bank's
(as the case may be) own gross negligence or wilful misconduct.
19.13 Retirement of Agent
(a) The Agent may retire from its appointment as Agent under this
Agreement and the relevant Security Documents having given to the
Parent and each of the Banks not less than 30 days' notice of its
intention to do so, provided that no such retirement shall take effect
unless there has been appointed by the Banks after consultation with
the Parent as a successor agent:
(i) a Bank nominated by the Majority Banks or, failing such a
nomination,
(ii) any reputable and experienced bank or financial institution with
offices in London nominated by the Agent.
Any corporation into which the Agent may be merged or converted or any
corporation with which the Agent may be consolidated or any
corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the Agent shall be a
party shall, to the extent permitted by applicable law, be the
successor Agent under this Agreement and the relevant Security
Documents without the execution or filing of any document or any
further act on the part of any of the parties to this Agreement or any
relevant Security Document, save that notice of any such merger,
conversion, amalgamation, consolidation or other reorganisation shall
forthwith be given to the Parent and the Banks.
(b) Upon any such successor as aforesaid being appointed, the retiring
Agent shall be discharged from any further obligation under this
Agreement and any relevant Security Documents (but shall continue to
have the benefit of this clause 19 in respect of any action it has
taken or refrained from taking prior to such discharge) and its
successor and each of the other parties to this Agreement and any
relevant Security Documents shall have the same rights and obligations
among themselves as they would have had if such successor had been a
party to this Agreement or any relevant Security Documents in place of
the retiring Agent. The retiring Agent shall (at the expense of the
Parent) provide its successor with copies of such of its records as
its successor reasonably requires to carry out its functions under
this Agreement and any relevant Security Documents.
19.14 Retirement of Overdraft Bank and Swingline Bank
With the prior consent of the Parent, not to be unreasonably withheld or
delayed, the Overdraft Bank or the Swingline Bank may resign from its
appointment as Overdraft Bank or Swingline Bank, as the case may be, under this
Agreement, provided that no such retirement shall take effect unless a successor
Overdraft Bank or Swingline Bank, as the case may be, has been appointed by the
Parent and has entered into such arrangements as may be required to become a
party to this Agreement as Overdraft Bank or Swingline Bank (as the case may be)
and to assume the rights and obligations of the original Overdraft Bank or
Swingline Bank (as the case may be).
19.15 Change of Reference Banks
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid and the whole of its Commitment cancelled (b) the Commitment (if any) of
any Reference Bank is reduced to zero in accordance with clause 8.5 or 16.1, (c)
a Reference Bank novates the whole of its rights and obligations (if any) as a
Bank under this Agreement or (d) any Reference Bank ceases to provide quotations
to the Agent for the purposes of determining LIBOR, the Agent may, acting on the
instructions of the Majority Banks, terminate the appointment of such Reference
Bank and with the agreement of the Parent (not to be unreasonably withheld or
delayed) appoint another Bank to replace such Reference Bank.
20 Notices and other matters
20.1 Notices
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in this
Agreement, in the case of a letter when delivered and, in the case of
a telefax, when a complete and legible copy is received by the
addressee (unless the date of despatch is not a business day in the
country of the addressee or the time of despatch of any telefax is
after the close of business in the country of the addressee in which
case it shall be deemed to have been received at the opening of
business on the next such business day);
(c) if sent by telefax to the Agent, be confirmed in writing by
first-class prepaid letter (airmail if available) provided that non
receipt of such letter by the Agent shall not invalidate the notice;
and
(d) be sent:
(i) to each Borrower c/o the Parent at:
121-141 Westbourne Terrace
London W2 6JR
Telefax: 020 7262 4300
Attention: The Treasurer
(ii) to the Agent at:
HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Telefax: 020 7336 9302
Attention: Syndicated Finance - Execution and Agency
(iii) to the Swingline Bank at:
The Bank of New York, as Swingline Bank
c/o BNY Capital Markets, Inc.
One Wall Street - 18 North
New York
NY 10286
USA
Telefax: 001 212 635 6365
Attention: Agency Department
(iv) to the Overdraft Bank at:
HSBC Bank plc
27-32 Poultry
London EC2P 2BX
Telefax: 020 7260 4800
Attention: Gary Lee
(v) to each Bank
at its address or telefax number
specified in schedule 2 or
in any relevant Substitution Certificate
or to such other address or telefax number as is notified by the
relevant party to the other parties to this Agreement.
20.2 Notices through the Agent
Every notice, request, demand or other communication under this Agreement
to be given by any Borrower to any other party shall be given to the Agent for
onward transmission as appropriate and to be given to any Borrower shall (except
as otherwise provided in this Agreement) be given by the Agent.
20.3 No implied waivers, remedies cumulative
No failure or delay on the part of the Finance Parties or any of them to
exercise any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise by the Finance Parties
or any of them of any power, right or remedy preclude any other or further
exercise thereof or the exercise of any other power, right or remedy. The
remedies provided in this Agreement are cumulative and are not exclusive of any
remedies provided by law.
20.4 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed and
delivered shall be an original, but all counterparts shall together constitute
one and the same instrument.
21 Governing law and jurisdiction
21.1 Law
This Agreement shall be governed by English law.
21.2 Submission to jurisdiction
The parties to this Agreement agree for the benefit of the Finance Parties
that:
(a) if any party has any claim against any other arising out of or in
connection with this Agreement such claim shall (subject to clause
21.2(c)) be referred to the High Court of Justice in England, to the
jurisdiction of which each of the parties irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any such
claim against any Finance Party shall be an exclusive jurisdiction and
no courts outside England shall have jurisdiction to hear or determine
any such claim; and
(c) nothing in this clause 21.2 shall limit the right of any Finance Party
to refer any such claim against any Borrower or any Guarantor to any
other court of competent jurisdiction outside England, to the
jurisdiction of which each Borrower and each Guarantor hereby
irrevocably agrees to submit, nor shall the taking of proceedings by
any Finance Party before the courts in one or more jurisdictions
preclude the taking of proceedings in any other jurisdiction whether
concurrently or not.
21.3 Agent for service of process
Each Borrower which is not incorporated in England and Wales irrevocably
and unconditionally designates, appoints and empowers the Parent to receive for
it and on its behalf service of process issued out of the High Court of Justice
in England in relation to any claim arising out of or in connection with this
Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement
to be duly executed on the date first above written.
Schedule 1
Part A - Original Borrowers
Name of Borrower Registered Number Registered office/address
(if any)
1 Cordiant Communications 1320869 121-141 Westbourne Terrace
Group plc London W2 6JR
2 Bates UK Limited 913184 121-141 Westbourne Terrace
London W2 6JR
3 Bates US Holdings Inc. 13-3965951 Corporation Trust Centre
1209 Orange Street
Wilmington
Newcastle
Delaware USA
5 Bates Deutschland Holdings GmbH HRB 8608 60314 Frankfurt am Main
Hanauer Landstrasse
287-289
Part B - Original Guarantors
Percentage of
Registered voting share
Number held by members
Name of Guarantor (if any) Registered office/address of the Group
----------------- -------- ------------------------- ---------------
1 Cordiant Communications 1320869 121-141 Westbourne Terrace
Group plc London W2 6JR
2 Bates UK Limited 913184 121-141 Westbourne Terrace 100%
London W2 6JR
3 Bates US Holdings Inc. 13-3965951 Corporation Trust Centre 100%
1209 Orange Street
Wilmington
Newcastle
Delaware
USA
4 Bates Deutschland Holdings HRB 8608 60314 Frankfurt am Main 100%
GmbH Hanauer Landstrasse
287-289
USA
5 Bates Advertising USA Inc. 100%
6 Bates Europe Limited 689584 121-141 Westbourne Terrace 100%
London W2 6JR
7 ICM International Limited 1802173 53 Frith Street 100%
London W1V 5TE
8 The Communications Group Australia 100%
Pty. Limited
9 Atlas Advertising Limited 964286 121-141 Westbourne Terrace 100%
London W2 6JR
10 Bates Communications Limited 1154513 121-141 Westbourne Terrace 100%
London W2 6JR
11 The Decision Shop Limited 615225 121-141 Westbourne Terrace 100%
London W2 6JR
12 Bates Churchill Public USA 100%
Relations, Inc
13 Bates Churchill USA 100%
Advertising Group Inc
14 Bates Travel & Tourism Inc USA 100%
15 Bates Worldwide USA 100%
(Delaware), Inc
16 XM.COM, Inc USA 100%
Part C - Additional Guarantors following the Waterloo Acquisition
Name of Guarantor Registered Registered office/address
Number
(if any)
1 Healthworld Corporation Inc. Delaware
2 GHNM Inc New York
3 Falk Communications Inc Delaware
4 Girgenti Hughes Butler & New York
McDowell Inc
5 Effective Sales Personnel 2998311 1 Thames Street
Limited Windsor
Berkshire
SL4 1PL
6 Headcount Field Marketing United Kingdom
Limited
Schedule 2
The Banks and their Commitments
===================================== ===================== =================
Name Address Facility A Facility B
and Commitment Commitment
telefax number $ $
- ------------------------------------- --------------------- -----------------
The Bank of New York 62,500,000 62,500,000
One Canada Square
London E14 5AL
Telefax: 020 7893 6032
Attn: Loans Department
- ------------------------------------- --------------------- -----------------
HSBC Bank plc 62,500,000 62,500,000
Poultry,
London EC2P 2BX
Telefax: 020 7260 4800
Attn: Gary Lee
- ------------------------------------- --------------------- -----------------
TOTAL $125,000,000 $125,000,000
===================================== ===================== =================
Schedule 3
Part A - Form of Drawdown Notice
To: HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Attention: Syndicated Finance - Execution and Agency
OR
The Bank of New York, as Swingline Bank plc Copy: HSBC Investment Bank
c/o BNY Capital Markets, Inc. Vintners Place
One Wall Street - 18 North 68 Upper Thames Street
New York London EC4V 3BJ
o 19o
Attention: Agency Department
Facilities of up to US$250,000,000, Agreement dated o 1999
We refer to the above Agreement and hereby give you notice that we [wish to
draw down a [Facility [A] [B] Advance]/[Swingline Advance/[Conversion Advance]
of [$]o [in [currency]] on o19o for a Term/Initial Interest Period of [o
days]/[o months]. The funds should be credited to [name and number of account]
with [details of bank in [New York City] [London] [principal financial centre
for relevant Optional Currency].
We confirm that:
(i) no event or circumstance has occurred and is continuing unremedied and
unwaived which constitutes a Default; and
(ii) the representations and warranties contained in clause 11.1 of the
Agreement (and so that the representation and warranty in clause
11.1(i) refers for this purpose to the consolidated financial
statements of the Group in respect of the financial year ended on 31
December 19o) other than the excluded representations and warranties
are true and correct at the date of this notice as if made with
respect to the facts and circumstances existing at the date of this
notice.
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
For and on behalf of
-------------------------
[Name of Borrower]
Part B - Form of L/C Application
To The Bank of New York, as Swingline Bank,
c/o BNY Capital Markets, Inc.,
One Wall Street - 18 North
New York
Attention: Agency Department
Copy: HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Attention: Syndicated Finance - Execution and Agency
o 199o
Facilities of up to US$250,000,000, Agreement dated o 1999
We refer to the above Agreement and hereby request that you issue a Swingline
Letter of Credit with an L/C Issue Date of [ ] for a maximum amount of [ ] in
respect of [ ].
We confirm that:
(iii) no event or circumstance has occurred and is continuing unremedied
and unwaived which constitutes a Default; and
(iv) the representations and warranties contained in clause 11.1 of the
Agreement (and so that the representation and warranty in clause
11.1(i) refers for this purpose to the consolidated financial
statements of the Group in respect of the financial year ended on
31 December 19o) other than the excluded representations and
warranties are true and correct at the date of this notice as if
made with respect to the facts and circumstances existing at the
date of this notice.
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
For and on behalf of
- --------------------------
Bates US Holdings Inc.
Schedule 4
Part A - Documents and evidence required as conditions precedent
22 General Conditions
(a) A copy, certified as a true, complete and up-to-date copy by an authorised
officer of the relevant company of the constitutional documents of each
Original Borrower and each Original Guarantor and all documents relating to
the existence and good standing of the Original Borrower and Original
Guarantors incorporated in the United States of America.
(b) A copy, certified as a true copy by an authorised officer of the relevant
company, of resolutions of the Board of Directors (or, in the case of any
company incorporated in Germany, a certificate that there is no supervisory
board) of each Original Borrower and each Original Guarantor, evidencing
approval of this Agreement and the Security Documents to which it is a
party and authorising its appropriate officers to execute and deliver this
Agreement and the Security Documents to which it is a party (or to execute
a power of attorney for this purpose) and to give all notices (including
Drawdown Notices) and take all other action required by each Borrower and
Guarantor under this Agreement and/or the Security Documents to which it is
a party.
(c) Specimen signatures, authenticated by an authorised officer of the relevant
company (other than any Company incorporated in Germany) (or the Parent in
the case of the attorney), of the persons authorised in the resolutions of
the Board of Directors referred to in paragraph (b) above.
(d) The Hedging Strategy Letter, duly executed.
(e) Opinions of (i) Norton Rose as to English law, (ii) Norton Rose, counsel to
the Banks as to New York law, (and relevant Counsel in Texas and Georgia)
(iii) Oppenhoff & Radler, counsel to the Banks in Germany, and (iv) Blake
Dawson Waldron, counsel to the Banks in Australia, each dated not more than
five Banking Days prior to the First Drawdown Date.
(f) Guarantees duly executed by each of the Original Guarantors.
(g) The Security Trust Deed duly executed by all the parties thereto (other
than the Security Trustee).
(h) The fee letters referred to in clause 9.1, duly executed by all parties.
(i) A copy of a notice from the Parent to the Agent under the Existing
Facilities of its intention to repay the Existing Facilities on the First
Drawdown Date together with notice of cancellation of the Existing
Facilities upon the repayment of the Existing Facilities.
(j) Deeds of release in relation to all security given for the Existing
Facilities, duly executed.
(k) HSBC Bank plc's standard forms of cross guarantee, duly executed by each
Overdraft Borrower together with HSBC Bank plc's standard overdraft terms
initialled by each Overdraft Borrower.
(l) A copy, certified as a true copy by an Authorised Officer of the Parent, of
the letter evidencing the acceptance by the Parent of its appointment by
each Obligor which is not incorporated in England and Wales as agent for
receipt of service of process under this Agreement and the relevant
Security Documents.
(m) A copy, certified as a true, complete and up-to-date copy by an Authorised
Officer of the Parent, of the Group Structure Book.
(n) Excerpt from the commercial register of any Original Borrower or Original
Guarantor incorporated in Germany dated not later than five Banking Days
prior to the First Drawdown Date confirming the signatories are authorised
to act on behalf of any such company.
Part B - Documents and evidence required as
conditions precedent to first drawdown
for the purposes of funding the D Acquisition
(a) A copy, certified as a true, complete and up-to-date copy by an Authorised
Officer of the Parent, of the M.O.U. approved by the Parent's board.
(b) Copies, certified as true, complete and up-to-date copies by an Authorised
Officer of the Parent, of the D Due Diligence.
Part C - Documents and evidence to be delivered by each additional Guarantor
(a) (If not attached to the certificate referred to in paragraph (h) below) a
copy, certified as true, complete and up to date by the company secretary
or equivalent officer of the relevant Subsidiary of the Certificate of
Incorporation and the Memorandum and Articles of Association (or equivalent
constitutional documents) of the relevant Subsidiary and, in the case of
any such Subsidiary incorporated in the United States of America, all
documents relating to the existence and good standing of such Subsidiary.
(b) (If not attached to the certificate referred to in paragraph (h) below) a
copy, certified as a true copy by the company secretary (or equivalent) of
the relevant Subsidiary, of resolutions of the board of directors (or, in
the case of any company incorporated in Germany, any other competent
authority) of the relevant Subsidiary, evidencing approval of the relevant
Guarantee and the Obligor's Deed of Accession (as defined in the Security
Trust Deed) and authorising its appropriate officers to execute and deliver
such Guarantee and Obligor's Deed of Accession, to give all notices and
take all other action required by the relevant Subsidiary as a Guarantor
(and, if requested by the Security Trustee), resolutions of the
shareholders of that Subsidiary evidencing approval of the Guarantee and
Obligor's Deed of Accession).
(c) A copy, certified as a true copy by the company secretary or equivalent
officer of the relevant Subsidiary of all consents, authorisations,
licences and approvals required by the relevant Subsidiary to authorise, or
required by the relevant Subsidiary in connection with, the execution,
delivery, validity, enforceability and admissibility in evidence of the
Guarantee and the performance by the relevant Subsidiary of its obligations
under the Guarantee and the Obligor's Deed of Accession.
(d) (If not attached to the certificate referred to paragraph (h) below)
specimen signatures, authenticated by the company secretary or equivalent
officer of the relevant Subsidiary of the persons authorised in the
resolutions of the Board of Directors or equivalent, referred to in
paragraph (b), above.
(e) An opinion of (i) legal advisers to the Banks in the country of
incorporation of the relevant Subsidiary and (ii), in the case of a
Guarantee where the relevant Subsidiary is not incorporated in England and
Wales, of Norton Rose, dated not more than fifteen Banking Days prior to
the date of the Guarantee.
(f) In the case of a Subsidiary not incorporated in England and Wales, a copy,
certified as a true copy by the company secretary or equivalent officer of
the relevant Subsidiary of a letter from the agent of the relevant
Subsidiary for receipt of service of process referred to in the Guarantee
accepting its appointment.
(g) A Guarantee and Obligor's Deed of Accession, in each case duly executed by
the relevant Subsidiary.
(h) In the case of any Guarantee whereby financial assistance is to be given by
the relevant Subsidiary) a certificate in the form of part E of schedule 4
(with appropriate amendments to take into account jurisdictions of
incorporation), together with all documents required to be attached thereto
in respect of the relevant subsidiary and a non-statutory auditor's report;
(i) Excerpt from the commercial register of any relevant Subsidiary
incorporated in Germany dated not later than fifteen Banking Days prior to
the date of the Guarantee confirming the signatories are authorised to act
on behalf of the respective company.
Part D - Documents and evidence to be delivered by an Additional Borrower
or Additional Overdraft Borrower
(a) A copy, certified as true, complete and up to date by the company secretary
or equivalent officer of the relevant Subsidiary of the Certificate of
Incorporation and the Memorandum and Articles of Association (or equivalent
constitutional documents) of the relevant Subsidiary and, in the case of
any such Subsidiary incorporated in the United States of America, all
documents relating to the existence and good standing of such Subsidiary.
(b) A copy, certified as a true copy by the company secretary (or equivalent)
of the relevant Subsidiary, of resolutions of the Board of Directors (or,
in the case of any company incorporated in Germany, any other competent
authority) of that Subsidiary evidencing approval of the Borrower Accession
Agreement or Overdraft Borrower Accession Agreement and Obligor's Deed of
Accession (as defined in the Security Trust Deed) and authorising its
appropriate officers to execute and deliver such Borrower Accession
Agreement or Overdraft Borrower Accession Agreement and Obligor's Deed of
Accession and to give all notices (including Drawdown Notices) in the case
of an Additional Borrower and take all other action required by the
relevant Subsidiary as an Additional Borrower or Additional Overdraft
Borrower, as the case may be, under this Agreement and the Security Trust
Deed.
(c) A copy, certified as a true copy by the company secretary or equivalent
officer of the relevant Subsidiary of all consents, authorisations,
licences and approvals required by the relevant Subsidiary to authorise, or
required by the relevant Subsidiary in connection with, the execution,
delivery, validity, enforceability and admissibility in evidence of the
Borrower Accession Agreement or Overdraft Borrower Accession Agreement and
Obligor's Deed of Accession and the performance by the relevant Subsidiary
of its obligations under the Agreement and the Security Trust Deed.
(d) Specimen signatures, authenticated by the company secretary or equivalent
officer of the relevant Subsidiary of the persons authorised in the
resolutions of the Board of Directors or equivalent, referred to in
paragraph (b), above.
(e) An opinion of legal advisers to the Banks in the country of incorporation
of the relevant Subsidiary, dated not more than fifteen Banking Days prior
to the date of the Borrower Accession Agreement or Overdraft Borrower
Accession Agreement.
(f) An opinion of Norton Rose, dated not more than fifteen Banking Days prior
to the date of the Borrower Accession Agreement or Overdraft Borrower
Accession Agreement.
(g) In the case of a Subsidiary not incorporated in England and Wales, a copy,
certified as a true copy by the company secretary or equivalent officer of
the relevant Subsidiary of a letter from the agent of the relevant
Subsidiary for receipt of service of process referred to in the Borrower
Accession Agreement or Overdraft Borrower Accession Agreement and the
Obligor's Deed of Accession accepting its appointment.
(h) A Borrower Accession Agreement or Overdraft Borrower Accession Agreement
and a Obligor's Deed of Accession duly executed by the Additional Borrower
and (in the case of the Borrower Accession Agreement or Overdraft Borrower
Accession Agreement) the Parent.
(i) A certificate of a director of the Additional Borrower confirming that
utilisation of the Facilities in full or, in the case of an Additional
Overdraft Borrower, utilisation of the Overdraft Facility in full would not
cause any borrowing limit binding on it to be exceeded.
(j) A copy, certified as a true copy by the company secretary of the Parent of
resolutions of the Board of Directors of the Parent, evidencing approval of
the Parent (for itself and on behalf of the other Borrowers) to the
Subsidiary becoming an Additional Borrower or an Additional Overdraft
Borrower, as the case may be, by entering into a Borrower Accession
Agreement or Overdraft
(i) Excerpt from the commercial register of any relevant Subsidiary
incorporated in Germany dated not later than fifteen Banking Days prior to
the date of the Borrower Accession Agreement confirming the signatories are
authorised to act on behalf of the respective company.
Part E - Form of Director's Certificate regarding financial assistance
I, o being [a Director] [the Secretary] of [company] Limited (the "Company"),
HEREBY CERTIFY as follows:
23 Private Company
The Company is a private company and is not a subsidiary of a public
company.
[* Wholly-owned Subsidiary
The Company is a wholly-owned Subsidiary of [o].
25 Constitutional Documents
The documents annexed to this certificate as annexure "[A]" constitute a
true, complete and up to date copy of the certificate of incorporation, each
certificate of incorporation on change of name of the Company, any certificate
of re-registration as a public or private company and the memorandum and
articles of association of the Company containing all modifications thereto and
there are no other constitutional documents of the Company.
26 Board Resolutions
The documents annexed to this certificate as annexure "[B]" are true and
complete copies of the minutes of a meeting of the board of directors of the
Company duly convened and held on [o]. The resolutions set out therein were duly
passed and have not been amended or revoked. No borrowing limits or other
restrictions (or lack of power) in relation to the giving of guarantees or
security or otherwise of the Company will be exceeded as a result of the Company
entering into the [Documents] (as defined in the minutes referred to above),
borrowing moneys thereunder or giving the guarantees and security thereunder or
incurring or performing the obligations expressed to be assumed by it
thereunder.
27 155(6)a Declaration and relevant statutory report
The document annexed to this certificate as annexure "[C]" is a true copy
of the statutory declaration made under section 155(6) of the Companies Act 1985
(the "Act") on [o]. The persons named as directors in the statutory declaration
were, at the date of the statutory declaration, the only directors of the
Company. The document annexed to such statutory declaration is a true copy of
the report made pursuant to section 156(4) of the Act and the auditors named in
it are the Company's auditors.
28 155(6)b Declarations and relevant statutory reports
[The Company is the holding company of [o Limited and o Limited] (the
"Relevant Subsidiaries"). The documents annexed to this certificate as annexure
"[D]" are true copies of the statutory declarations made under section 155(6) of
the Act in respect of the Relevant Subsidiaries on [o]. The persons respectively
named as directors in such statutory declarations were, as at the date of the
statutory declarations, the only directors of the Company. The documents annexed
to each of such statutory declarations are true copies of the reports made
pursuant to section 156(4) of the Act and the auditors named in each such
document are the Company's auditors.]
29 Parent declarations relating to the Company's financial assistance
[There is no holding company] [o Limited and o Limited are holding
companies] of the Company the directors of which are required to make a
statutory declaration in relation to the Company's financial assistance pursuant
to section 155(6) of the Act.]
30 Company's Resolution
The document annexed to this certificate as annexure "[E]" is a true copy
of the special resolutions of the Company approving the financial assistance to
be given by the Company described in the statutory declaration referred to in
paragraph [5] above (the "Company's financial assistance") [and the financial
assistance to be given by the Relevant Subsidiaries described in the statutory
declarations referred to in paragraph [6] above] at the extraordinary general
meeting of the Company duly convened and held on [o]. At that meeting the
statutory declarations referred to in paragraphs [5] and [6] above were
available for inspection by members of the Company. Every member of the Company
who is entitled to vote at a general meeting of the Company consented to or
voted in favour of the special resolution.]
31 Company's holding companies' shareholders' resolutions
There is no holding company of the Company which is required to pass (and
has not passed) a special resolution in relation to the Company's financial
assistance pursuant to section 155(5) of the Act.
32 Authorised Signatories
Set out below are true signatures of those persons authorised (whether
signing alone or jointly) by the resolutions of the board of directors of the
Company referred to in paragraph [4] above to sign any of the [Documents] (as
defined in the minutes referred to in such paragraph [4]) and to execute all
such undertakings, statements, certificates, notices (including, without
limitation, any Drawdown Notice), acknowledgements and other documents as may be
required to be done, signed and executed by or on behalf of the Company in
connection with the [Documents] (as so defined) and otherwise in relation to or
ancillary to the same.
[name] ..............................
[name] ..............................
SIGNED [DATE]
- ------------------------
[Director][Secretary]
Schedule 5
Calculation of Additional Cost
1 The Additional Cost shall be calculated by the Agent in respect of each
period for which it falls to be calculated in accordance with the following
formulae:
In relation to each amount in Sterling:
CL + S(L - Z) + 0.01F
--------------------- = per cent. per annum
100 - (C+S)
In relation to each other amount:
Y 0.01F
----- = per cent. per annum
100
Where:
C = The amount required to be held as a non-interest bearing cash
ratio deposit with the Bank of England expressed as a percentage
of an eligible institution's eligible liabilities (above any
stated minimum).
F = The amount of Sterling per (pound)1,000,000 of the fee base of an
authorised institution payable to the Financial Services
Authority per annum (disregarding any minimum fee payable under
the Fees Regulations).
L = The rate of interest per annum at which Sterling deposits are
offered by the Agent to leading banks in the London Interbank
Market at or about 11.00 a.m. on the date of calculation for a
period comparable to the period for which the Additional Cost is
to be calculated.
S = The amount required to be placed as special deposits with the
Bank of England, expressed as a percentage of an eligible
institution's eligible liabilities (above any stated minimum).
Y = The fraction of foreign currency liabilities taken into account
under the Fees Regulations in calculating the fee base
(disregarding any offset for claims on non-resident offices).
Z = The lower of L and the rate of interest per annum paid by the
Bank of England on special deposits at or about 11.00 a.m. on the
date of calculation.
2 For the purposes of calculating the Additional Cost:
(a) C, L, S and Z are included in the formula as numbers and not as
percentages, e.g. if C = 0.15 per cent. and L = 7 per cent. CL is
calculated as 0.15 x 7;
(b) the relevant formula is applied on the first day of each period for
which it falls to be calculated (and the result shall apply for the
duration of such period);
(c) each amount is rounded up to the nearest four decimal places; and
(d) if the formula produces a negative percentage, the percentage shall be
taken as zero.
3 If alternative or additional financial requirements are imposed by the Bank
of England, the Financial Services Authority or any other United Kingdom
governmental authority or agency which in the Agent's opinion (after
consultation with the Banks) make the formulae (or either of them) no
longer appropriate, the Agent shall be entitled by notice to the Parent to
stipulate such other formulae as shall be suitable to apply in substitution
for the formulae. Any such other formulae so stipulated shall take effect
in accordance with the terms of such notice.
4 In this schedule 5:
"authorised" and "institution" have the meanings given to those terms in
the Banking Act 1987;
"Bank of England Act" means the Bank of England Act 1998;
"eligible institution" has the meaning given to that term in schedule 2 to
the Bank of England Act;
"eligible liabilities" has the meaning given to that term in the Cash Ratio
Deposits (Eligible Liabilities) Order 1998 or the applicable substitute
order made under the Bank of England Act as is in force on the date of
application of the formulae;
"fee base" has the meaning given to that term in the Fees Regulations;
"Fees Regulations" means the Banking Supervision (Fees) Regulations 1999 or
the applicable substitute regulations made under the Bank of England Act as
are in force on the date of application of the formulae; and
"special deposits" has the meaning given to that term by the Bank of
England on the date of application of the formulae.
Schedule 6
Form of Substitution Certificate
Part A (single transfers)
NB: 1 Banks are advised not to employ Substitution Certificates or otherwise
to assign, novate or transfer interests in the Agreement without first
ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services Act 1986 and regulations
made thereunder.
2 It is expected that Banks will enter into separate arrangements
dealing with the monies to be paid to the Existing Bank by the
Substitute in consideration of the novation (e.g. principal, accrued
interest, fees and any mismatched funding adjustment). Unless the
Transfer Date is a rollover date, mismatches of parties' funding may
arise. This Certificate does not deal with these issues, nor does it
deal with any interim risk participation the Existing Bank may grant
to the Substitute pending the Transfer Date.
To: HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Attention: Syndicated Finance - Execution and Agency
o 19o
Substitution Certificate
This Substitution Certificate relates to an Agreement (the "Agreement") dated o
1999 between Cordiant Communications Group plc as the Parent (1), the companies
whose names, registered numbers and registered offices are set out in part A of
schedule 1 thereto as Original Borrowers (2), The Bank of New York and HSBC
Investment Bank plc as Arrangers (3), the banks and financial institutions whose
respective names and addresses are set out in schedule 2 thereto as Banks (4)
HSBC Investment Bank plc as Agent and Security Trustee (5), The Bank of New York
as Swingline Bank (6) and HSBC Bank plc as Overdraft Bank (7). Terms defined in
the Agreement shall have the same meaning in this Substitution Certificate.
1 [Name of Existing Bank] (the "Existing Bank") (a) confirms the accuracy of
the summary of its Commitment and Contribution set out in the schedule to
this Substitution Certificate; and (b) requests [Substitute Bank] (the
"Substitute") to accept by way of novation the portion of its Commitment
and Contribution specified in the schedule to this Substitution Certificate
by counter-signing and delivering this Substitution Certificate to the
Agent at its address for the service of notices specified in the Agreement.
2 The Substitute requests the Agent (on behalf of itself, the Swingline Bank,
the Overdraft Bank, the Borrowers, the Guarantors, the Arrangers, the
Security Trustee and the Banks) to accept this Substitution Certificate as
being delivered to the Agent pursuant to and for the purposes of clause
18.3 of the Agreement, so as to take effect in accordance with its terms on
[date of transfer], [being not earlier than [5] Banking Days after date of
delivery of the Certificate to the Agent] (the "Transfer Date").
3 The Agent, on behalf of itself, the Swingline Bank, the Overdraft Bank, the
Borrowers, the Guarantors, the Arrangers, the Security Trustee and the
Banks confirms the novation effected by this Substitution Certificate
pursuant to and for the purposes of clause 18.3 of the Agreement.
4 The Substitute confirms:
(a) that it has received copies of the Agreement and all other
documentation and information required by it in connection with the
transactions contemplated by this Substitution Certificate;
(b) that it has not relied upon any statement, opinion, forecast or other
representation (including, without limitation, anything contained in
the Information memorandum) or warranty made by the Existing Bank, the
Arrangers, the Security Agent or the Agent to induce it to enter into
this Substitution Certificate;
(c) that it has made and will continue to make, without reliance on the
Existing Bank or any other Finance Party, and based on such documents
as it considers appropriate, its own appraisal of the creditworthiness
of each Borrower and the Group and its own independent investigation
of the financial condition, prospects and affairs of each Borrower and
the Group in connection with the making and continuation of the
Facilities under the Agreement;
(d) that neither the Existing Bank nor any other Finance Party shall at
any time be deemed to have had or have a duty or responsibility,
either historically, initially or on a continuing basis, to provide
the Substitute with any credit or other information with respect to
any Borrower or any other member of the Group whether coming into its
possession before the making of any Drawing or at any time or times
thereafter, other than (in the case of the Agent) as provided in
clauses 19.3(a) and 19.5(a) of the Agreement;
(e) that it has made and will continue to make its own assessment of the
legality, validity, enforceability and sufficiency of the Agreement,
the Security Documents and this Substitution Certificate and has not
relied and will not rely on the Existing Bank, the Arrangers, the
Security Agent or the Agent or any statements made by any of them in
that respect;
(f) that, accordingly, none of the Existing Bank, the Arrangers, the
Security Agent and the Agent shall make any representations or
warranties in respect of, or shall have any liability or
responsibility to the Substitute in respect of any of the foregoing
matters or any other matter referred to in clause 19.7 of the
Agreement; and
(g) that it is (or will, at any time any payment to it by any Borrower is
to be made, be) a Qualifying Bank.
5 Execution of this Substitution Certificate by the Substitute constitutes
its representation to the Existing Bank and all other parties to the
Agreement and the Security Trust Deed that it has power to become party to
the Agreement and the Security Trust Deed as a Bank on the terms herein and
therein set out and has taken all necessary steps to authorise execution
and delivery of this Substitution Certificate.
6 The Substitute hereby undertakes to the Existing Bank, the other Banks, the
Borrowers, the Guarantors, the Arrangers, the Security Trustee, the
Swingline Bank, the Overdraft Bank and the Agent that it will perform in
accordance with their terms all those obligations which by the respective
terms of the Agreement and the Security Trust Deed will be assumed by it
after acceptance of this Substitution Certificate by the Agent.
7 Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges the Existing Bank to:
(a) accept any re-transfer from the Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by the Substitute by reason of any
non-performance by any Borrower or any other party to the Agreement or
any of the Security Documents or any document relating thereto of any
of its obligations under the same.
8 This Substitution Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law. Clauses 21.2 and 21.3 of the Agreement inclusive are incorporated
herein by reference.
9 This Substitution Certificate may be executed in any number of counterparts
and by different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
10 This Substitution Certificate is governed by English law. Clauses 21.2 and
21.3 are incorporated herein by reference.
Note: This Substitution Certificate is not a security, bond, note, debenture,
investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
The Schedule
Amount of Contribution Portion Novated
---------------------- ---------------
Swingline Overdraft Swingline Overdraft
Facility A Facility B Facility Facility Facility B Facility B Facility Facility
$ $ $ (pound) $ $ $ (pound)
Amount of Contribution Portion Novated
---------------------- ---------------
Swingline Overdraft Swingline Overdraft
Facility A Facility B Facility Facility Facility A Facility B Facility Facility
$ $ $ (pound) $ $ $ (pound)
Administrative Details of Substitute
Lending office:
Account for payments:
Telephone:
Telefax:
Attention:
[Existing Bank] [Substitute]
By: By:
Date Date:
The Agent
By:
on its own behalf and on behalf of the other Finance Parties, Borrowers and all
other parties to the Agreement and the Security Trust Deed.
Date:
Part B (global form)
NB 1. Banks are advised not to employ Substitution Certificates or otherwise
to assign, novate or transfer interests in the Agreement without first
ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services Act 1986 and regulations
made thereunder.
2. It is expected that Banks will enter into separate arrangements
dealing with the monies to be paid to the Existing Banks by the
Substitutes in consideration of the novation (e.g. principal, accrued
interest, fees and any mismatched funding adjustment). Unless the
Transfer Date is a rollover date, mismatches of parties' funding may
arise. This Certificate does not deal with these issues, nor does it
deal with any interim risk participation the Existing Banks may grant
to the Substitutes pending the Transfer Date.
To: HSBC Investment Bank plc
Vintner's Place
68 Upper Thames Street
London EC4V 3BJ
Attention: Syndicated Finance - Execution and Agency
[DATE]
Substitution Certificate
This Substitution Certificate relates to an Agreement (the "Agreement") dated o
1999 between Cordiant Communications Group plc as the Parent (1), the companies
whose names, registered numbers and registered offices are set out in part A of
schedule 1 thereto, as Original Borrowers (2), The Bank of New York and HSBC
Investment Bank plc as Arrangers(3), the banks and financial institutions whose
respective names and addresses are set out in schedule 1 thereto as Banks (4),
HSBC Investment Bank plc as Agent and Security Trustee (5), The Bank of New York
as Swingline Bank (6) and HSBC Bank plc as Overdraft Bank (7). Terms defined in
the Agreement shall have the same meaning in this Substitution Certificate.
33 Each of the banks set out as Existing Banks in part A of the
schedule below (the "Existing Banks") (a) confirms the accuracy of the
summary of its participation in the Agreement set out in the schedule and
(b) requests each of the banks set out as Substitute Banks in Part C of the
schedule (the "Substitutes") to accept by way of novation the portion of
such participation specified (or calculated as specified) in the schedule
by counter-signing and delivering this Substitution Certificate to the
Agent at its address for the service of notices specified in the Agreement.
34 Each of the Substitutes hereby requests the Agent (on behalf of itself,
the other Finance Parties, all Borrowers and all other parties to the
Agreement) to accept this Substitution Certificate as being delivered to
the Agent pursuant to and for the purposes of clause 18.3 of the Agreement,
so as to take effect in accordance with the terms thereof on [date of
transfer] (the "Transfer Date") or on such later date as may be determined
in accordance with the terms thereof.
35 The Agent (on behalf of itself, the other Finance Parties, the Borrowers
and all other parties to the Agreement) confirms each of the novations
effected by this Substitution Certificate pursuant to and for the purposes
of clause 18.3 of the Agreement, so as to take effect in accordance with
the respective terms thereof.
36 Each of the Substitutes confirms:
(a) that it has received copies of the Agreement and all other
documentation and information required by it in connection with the
transactions contemplated by this Substitution Certificate;
(b) that it has not relied upon any statement, opinion, forecast or other
representation (including, without limitation, anything contained in
the Information Memorandum) or warranty made by the Existing Banks,
the Arrangers, the Security Agent or the Agent to induce it to enter
into this Substitution Certificate;
(c) that it has made and will continue to make, without reliance on the
Existing Banks or any other Finance Party, and based on such documents
as it considers appropriate, its own appraisal of the creditworthiness
of each Borrower and the Group and its own independent investigation
of the financial condition, prospects and affairs of each Borrower and
the Group in connection with the making and continuation of the
Facilities under the Agreement;
(d) that neither the Existing Banks nor any other Finance Party shall at
any time be deemed to have had or have a duty or responsibility,
either historically, initially or on a continuing basis, to provide
the Substitutes with any credit or other information with respect to
any Borrower or any other member of the Group whether coming into its
possession before the making of any Drawing or at any time or times
thereafter, other than (in the case of the Agent) as provided in
clauses 19.3(a) and 19.5(a) of the Agreement;
(e) that it has made and will continue to make its own assessment of the
legality, validity, enforceability and sufficiency of the Agreement,
the Security Documents and this Substitution Certificate and has not
relied and will not rely on the Existing Banks, the Arrangers, the
Security Agent or the Agent or any statements made by any of them in
that respect;
(f) that, accordingly, none of the Existing Banks, the Arrangers, the
Security Agent and the Agent shall make any representations or
warranties in respect of, or shall have any liability or
responsibility to the Substitutes in respect of, any of the foregoing
matters or any other matter referred to in clause 19.7 of the
Agreement;
(g) that it is (or will, at any time any payment to it by any Borrower is
to be made, be) a Qualifying Bank.
37 Execution of this Substitution Certificate by each of the Substitutes
constitutes its representation to each of the Existing Banks and all other
parties to the Agreement and the Security Trust Deed that it has power to
become party to the Agreement and the Security Trust Deed as a Bank on the
terms herein and therein set out and has taken all necessary steps to
authorise execution and delivery of this Substitution Certificate.
38 Each of the Substitutes hereby undertakes to the Existing Banks, the
Finance Parties, the Borrowers and each of the other parties to the
Agreement that it will perform in accordance with its terms all those
obligations which by the terms of the Agreement will be assumed by it after
acceptance of this Substitution Certificate by the Agent.
39 Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges any of the Existing Banks to:
(a) accept any re-transfer from any Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by any Substitute by reason of any
non-performance by any Obligor or any other party to the Agreement or
any of the Security Documents or any document relating thereto of any
of its obligations under the same.
40 Each Substitute (and the Existing Banks in respect of the transfers to
such Substitute) agrees to be bound by this Substitution Certificate
notwithstanding that any other Substitute intended to execute this
Substitution Certificate may not do so or may not be effectually bound.
41 This Substitution Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with
English law. Clauses 21.2 and 21.3 of the Agreement inclusive are
incorporated herein by reference.
Note: This Substitution Certificate is not a security, bond, note, debenture,
investment or similar instrument.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
The Schedule
Part A
Existing Banks' Commitments, Contributions (and Relevant
Proportions) being each of their participations in the
Agreement as at the date of this Substitution Certificate
[Set out each Existing Bank's participation including
Commitments and Contributions]
Part B
Portion Transferred
[Set out the portion of each Existing Bank's Commitments
and Contributions transferred]
The portion of an Existing Bank's [Commitments and Contributions in respect of
each Facility etc.] to be transferred to a particular Substitute is [as set out
below/calculated as follows:]]
[set out details or method of calculation]
Part C
[Set out names of Substitute Banks and the aggregate amounts of the Commitments
and Contributions in respect of each Facility being transferred to them] [Insert
execution particulars and each Substitute's administration details]
[Each of the Existing Banks] [Each of the Substitutes]
By:.......................... By:............................
Date: Date:
The Agent
By:
.....................................
on its own behalf
and on behalf of the other Finance Parties,
the Borrowers and all other parties to the
Agreement and the Security Trust Deed.
Schedule 7
Permitted Encumbrances
================== ================== ============== ================= ==============================================
Country Company Currency Amount Description
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Australia George Patterson AUD 78,487 Rental bonds/deposits
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
China Bates HKD 835,000 Cash collateral to secure rental agreement
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
France Bates FRF 1,097,000 Cash collateral to secure rental guarantee
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Greece Bates GRD 50,000,000 Charge on accounts receivable re Xhios bank
facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Greece Bates GRD 75,000,000 Post dated bills re guarantee facility
provided by Xhios
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Greece Bates GRD 75,000,000 Post dated bills (or cash) re guarantee
facility provided by Bank of Attica
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
India Bates INR 75,000,000 Charge of receivables and equitable mortgage
of properties for bank facilities granted by
HSBC and Nedungadi Banks
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
India Bates INR 600,000 Term deposit to secure bank guarantee
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Indonesia Bates IDR 1,000,000,000 Charge on receivables re Lippo Bank facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Netherlands Bates NLG 2,000,000 Charge on accounts receivable re ABN Amro
bank facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Netherlands Cordiant Finance NLG 18,463 Cash collateral to secure rental guarantee
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
New Zealand Bates NZD 500,000 Debenture over company assets re countrywide
Bank facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Sweden Bates SEK 4,150,000 Charge on assets re Provinsbanken/Osgota
Enskilda Banken bank and guarantee facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
Taiwan Bates NTD 15,000,000 Cash collateral for media guarantee facility
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
USA Ted Bates WW USD Variable Cash surrender value of life assurance policy
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
UK UK Operating GBP variable Fixed charge over TV receivables
companies
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
- ------------------ ------------------ -------------- ----------------- ----------------------------------------------
UK Plc ESP 30,975,000 Escrow account for deferred consideration re
minority purchase of Grupo Bates Spain
================== ================== ============== ================= ==============================================
Schedule 8 - Part A
Borrower Accession Agreement
THIS BORROWER ACCESSION AGREEMENT is dated [ ] and made BETWEEN: m
(1) o (No. o) whose registered office is at o (the "Additional Borrower");
(2) CORDIANT COMMUNICATIONS GROUP PLC (No. 1320869) whose registered office is
at 121-141 Westbourne Terrace, London W2 6JR (the "Parent"); and
(3) HSBC INVESTMENT BANK PLC of Vintners Place 68 Upper Thames Street London
EC4V 3BJ in its capacity as Agent under the Agreement referred to below on
behalf of itself the and the other Finance Parties (the "Agent").
WHEREAS:
(A) The Additional Borrower is a Subsidiary of the Parent.
(B) By an agreement dated o 1999 and made between the Parent (1), the companies
whose names and, where applicable, registered offices and registered
numbers are set out in part A of schedule 1 thereto (2), the Arrangers (3),
the banks and financial institutions whose names and addresses are set out
in schedule 2 thereto (4), the Agent and the Security Trustee (5), the
Swingline Bank (6) and the Overdraft Bank (7) (as from time to time
amended, varied, extended, restated or replaced, the "Agreement"), the
Banks agreed to make available to the Borrowers credit facilities.
(C) The Parent has undertaken to procure that an agreement supplemental to the
Agreement shall be executed and delivered by any Subsidiary of the Parent
which the Parent intends should become an Additional Borrower under the
Agreement.
NOW THIS BORROWER ACCESSION AGREEMENT WITNESSES as follows:
1 Agreement definitions
Unless the context otherwise requires or unless otherwise defined in this
Borrower Accession Agreement, words and expressions defined in the
Agreement shall have the same meaning when used in this Borrower Accession
Agreement or the Recitals hereto. Clauses 1.3 and 1.4 of the Agreement
shall apply to this Borrower Accession Agreement, mutatis mutandis, as if
expressly set out herein.
2 Accession to the Agreement
With effect from the date of this Borrower Accession Agreement, the
Additional Borrower shall become a party to the Agreement and a Borrower
thereunder as if named therein in part A of schedule 1 thereto and with
effect from such date shall assume obligations towards and rights against
the other Borrowers, the Agent, the Arranger, the Funders and the Security
Trustee as if so named therein.
3 Continuance of the Agreement
Notwithstanding this Borrower Accession Agreement, the provisions of the
Agreement shall continue in full force and effect and, with effect from the
date of this Borrower Accession Agreement, the Agreement shall be read and
construed as one instrument as if references in the Agreement to "this
Agreement" were to the Agreement and this Borrower Accession Agreement
taken together.
4 Consent
The Parent (on behalf of itself and, the other Borrowers) and the Agent (on
behalf of itself and the other Finance Parties) consent to the Additional
Borrower becoming a Borrower as set out in clauses 2 and 3.
5 Representations and warranties
The Additional Borrower represents and warrants to each of the Funders, the
Arrangers, the Security Trustee and the Agent in the terms of clause 11.1
of the Agreement other than the excluded representations and warranties as
if references therein (i) to this "Agreement" or to the "Security
Documents" were also to this Borrower Accession Agreement and (ii) to the
"Borrowers" or any "member of the Group" were to the Additional Borrower.
6 Law [and jurisdiction]
This Borrower Accession Agreement shall be governed by and construed in
accordance with English law.
[Jurisdiction clause and appointment of agent for service of process]
IN WITNESS whereof this Borrower Accession Agreement has been entered into the
day and year first above written
Part B - Overdraft Borrower Accession Agreement
THIS OVERDRAFT BORROWER ACCESSION AGREEMENT is dated [ ] and made BETWEEN:
(1) (No. o) whose registered office is at o (the "Additional Overdraft
Borrower");
(2) CORDIANT COMMUNICATIONS GROUP PLC (No. 1320869) whose registered office is
at 121/141 Westbourne Terrace, London W2 6JR (the "Parent"); and
(3) HSBC INVESTMENT BANK PLC of Vintners Place 68 Upper Thames Street London
EC4V 3BJ in its capacity as Agent under the Agreement referred to below on
behalf of itself and the other Finance Parties (the "Agent").
WHEREAS:
(A) The Additional Overdraft Borrower is a Subsidiary of the Parent.
(B) By an agreement dated o 1999 and made between the Parent (1), the companies
whose names and, where applicable, registered offices and registered
numbers are set out in part A of schedule 1 thereto (2), the Arrangers (3),
the banks and financial institutions whose names and addresses are set out
in schedule 2 thereto (4), the Agent and the Security Trustee (5), the
Swingline Bank (6) and the Overdraft Bank (7) (as from time to time
amended, varied, extended, restated or replaced, the "Agreement"), the
Banks agreed to make available to the Borrowers credit facilities.
(C) The Parent has undertaken to procure that an agreement supplemental to the
Agreement shall be executed and delivered by any Subsidiary of the Parent
which the Parent intends should become an Additional Overdraft Borrower
under the Agreement.
NOW THIS OVERDRAFT BORROWER ACCESSION AGREEMENT WITNESSES as follows:
1 Agreement definitions
Unless the context otherwise requires or unless otherwise defined in this
Overdraft Borrower Accession Agreement, words and expressions defined in
the Agreement shall have the same meaning when used in this Overdraft
Borrower Accession Agreement or the Recitals hereto. Clauses 1.3 and 1.4 of
the Agreement shall apply to this Overdraft Borrower Accession Agreement,
mutatis mutandis, as if expressly set out herein.
2 Accession to the Agreement
With effect from the date of this Overdraft Borrower Accession Agreement,
the Additional Overdraft Borrower shall become a party to the Agreement and
an Overdraft Borrower thereunder as if named therein as an Overdraft
Borrower and with effect from such date shall assume obligations towards
and rights against the other Borrowers, the Agent, the Arranger, the
Funders and the Security Trustee as if so named therein.
3 Continuance of the Agreement
Notwithstanding this Overdraft Borrower Accession Agreement, the provisions
of the Agreement shall continue in full force and effect and, with effect
from the date of this Overdraft Borrower Accession Agreement, the Agreement
shall be read and construed as one instrument as if references in the
Agreement to "this Agreement" were to the Agreement and this Overdraft
Borrower Accession Agreement taken together.
4 Consent
The Parent (on behalf of itself and, the other Borrowers) and the Agent (on
behalf of itself and the other Finance Parties) consent to the Additional
Overdraft Borrower becoming an Overdraft Borrower as set out in clauses 2
and 3.
5 Representations and warranties
The Additional Overdraft Borrower represents and warrants to each of the
Funders, the Arrangers, the Security Trustee and the Agent in the terms of
clause 11.1 of the Agreement other than the excluded representations and
warranties as if references therein (i) to this "Agreement" or to the
"Security Documents" were also to this Overdraft Borrower Accession
Agreement and (ii) to the "Borrowers" or any "member of the Group" were to
the Additional Overdraft Borrower.
6 Law [and jurisdiction]
This Overdraft Borrower Accession Agreement shall be governed by and
construed in accordance with English law.
[Jurisdiction clause and appointment of agent for service of process].
IN WITNESS whereof this Overdraft Borrower Accession Agreement has been entered
into the day and year first above written.
Schedule 9
Permitted Guarantees
========================== ================== =============== =============== =======================================
Country Company Currency Amount Description
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Australia K&D Bond AUD 58,000 Indemnities provided in respect of a
guarantee provided by ANZ for rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Australia George Patterson AUD 13,584,120 Guarantee given by the company for
rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Austria Bates ATS 420,000 Guarantee given by the company for
rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Belgium Bates BEF 1,500,000 Indemnities provided in respect of a
guarantee provided by Deutsche Bank
for rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Canada plc CAD 1,000,000 Guarantee given by plc for the Nova
Scotia facility provided to Bates
Canada
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Germany Scholz & Friends DEM 500,000 Indemnities provided in respect of a
guarantee provided by SMH Bank for
property lease
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Germany Scholz & Friends DEM 4,600,000 Indemnities provided in respect of a
guarantee provided by BHF Bank for
property lease
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Greece Bates GRD 200,000,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Euromerchant Bank
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Greece Bates GRD 150,000,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Xhios Bank
(secured 50% on post-dated bills)
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Greece Bates GRD 150,000,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Bank of Attica
(secured 30% on cash or 50% on
post-dated bills)
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Hong Kong Bates HKD 100,000 Guarantee provided to SCMP in respect
of Zenith Media
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Italy 141 ITL 6,250,000 Indemnities provided in respect of a
guarantee provided by BCI to Zurigo
Assurance
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Italy Bates ITL 70,000,000 Indemnities provided in respect of a
guarantee provided by BCI to Zurigo
Assurance
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Italy Bates ITL 30,000,000 Indemnities provided in respect of a
guarantee provided by BCI on behalf
of client Istat
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Italy Bates ITL 5,000,000 Indemnities provided in respect of a
guarantee provided by BCI on behalf
of Italian Police Department
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Italy Bates ITL 14,000,000 Indemnities provided in respect of a
guarantee provided by BCI on behalf
of client Presidenza del Consiglio
del Ministri
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Malaysia Bates MYR 5,000,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by HSBC (50%
guaranteed by plc)
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Netherlands Bates NLG 236,300 Guarantee given by the company for
rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Norway Bates Gruppen NOK 7,800,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Sparbanken for
rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Norway Bates Gruppen NOK 315,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Sparbanken for
rent
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Norway Bates Gruppen NOK 500,000 Guarantee given by the company to
Kreditkassen for a loan to an employee
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Spain Delvico Bates ESP 100,000,000 Indemnities provided in respect of
guarantees issued under guarantee
facility provided by Banco Santander
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Sweden Bates SEK 1,144,000 Indemnities provided in respect of a
guarantee provided by
Provinsbanken/Osgota Enskilda Banken
for rent (secured by a charge on
assets)
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
Taiwan Bates NTD 10,000,000 Indemnities provided in respect of a
factory loan provided by Chailease
Finance Co
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Bates Overseas PTE 30,000,000 Guarantee provided by BOH for the
Holdings Banco Totta & Acores bank facility
for Bates Portugal JV
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc USD Lease Guarantee given to landlord of Hudson
obligations Street (with Saatchi)
and over costs
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc GBP Lease Guarantee given to landlord of
obligations Berkeley Square (with Saatchi)
and over costs
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc GBP Lease Guarantee given to landlord of Dukes
obligations Road (with Saatchi)
and over costs
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK/US Plc USD Lease Guarantee given to landlord of Bates
obligations premises at 498 Seventh Avenue
and over costs
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc ZAR Run-off Guarantee given by plc to PN Barrett
liabilities Company (Prop) Ltd
if any
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc GBP Variable forward FX contracts
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc JPY 700,000,000 Guarantee given by plc in respect of
Bates Japan
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
UK Plc USD 2,000,000 Guarantee given to Chase Manhattan
Bank
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
USA Holdings USD Guarantee given by Cordiant Compton
WW to Nlederhoffer, Cross & Zeckhauser
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
USA Holdings USD Guarantee given by Cordiant Compton
WW to Orenstein, Musoff & Orenstein
- -------------------------- ------------------ --------------- --------------- ---------------------------------------
USA Holdings USD 10,000,000 Guarantee given by Cordiant Crompton
WW to KCIN re lease
========================== ================== =============== =============== =======================================
Schedule 10
Borrower's Compliance Certificate
Form of Compliance Certificate
to be issued by the Authorised Officer
HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Attention: Syndicated Finance - Execution and Agency
[Date]
Dear Sirs
Cordiant Communications Group plc Loan Agreement dated o 1999 for Credit
Facilities of up to US$250,000,000 (the "Agreement")
We refer to the Agreement and deliver this Compliance Certificate in respect of
the Fiscal Quarter ended o pursuant to clause 12.1(g) thereof. Terms defined in
the Agreement shall have the same meaning when used in this Compliance
Certificate. We attach a calculation of all the relevant items referred to in
paragraphs 1 to 4 below.
We confirm:
1 PBIT in respect of the 12 months ended on o was o.
2 Consolidated Net Interest Expenditure in respect of the 12 months ended on
o was o.
3 Consolidated Gross Borrowings (calculated on the basis of the daily average
for the Fiscal Half-Year ended on o was o.
4 Adjusted PBIT in respect of the 12 months ended on o was o.
Based on the above, we certify that, calculated on the basis set out in clause
13 of the Agreement:
(a) On o the ratio of PBIT to Consolidated Net Interest Expenditure was o.
(b) On o the ratio of Consolidated Gross Borrowings to Adjusted PBIT was o.
Accordingly, we confirm that the Parent was in compliance with the undertakings
set out in clause 13.1 on o and in respect of the Fiscal Half-Year ended on such
date.
We confirm that no Default has occurred and is continuing which is unremedied
and unwaived [other than where full details have previously been provided to
you].
For and on behalf of
Cordiant Communications Group plc
.......................
Authorised Officer
Schedule 11
Form of Guarantee to be given by new Guarantors
DATED
GUARANTEE
given by
o
Norton Rose
London
THIS GUARANTEE is dated o and made BETWEEN:
(1) o as Guarantor; and
(2) HSBC INVESTMENT BANK PLC as Security Trustee, for the benefit of itself and
each of the Beneficiaries as defined below.
WHEREAS:
(A) By an agreement (as from time to time amended, varied, extended, restated
or replaced, the "Agreement") dated o 1999 and made between Cordiant
Communications Group plc as Parent (the "Parent") (1), the companies whose
names and registered offices are set out in schedule 1 thereto (together
with the Parent, the "Borrowers") (2), The Bank of New York and HSBC Bank
plc as Arrangers (3), the banks and financial institutions whose names and
addresses are set out in schedule 2 thereto (the "Banks") (4), HSBC
Investment Bank plc as Agent and Security Trustee (5), The Bank of New York
as Swingline Bank (6) and HSBC Bank plc as Overdraft Bank (7) the Banks
have agreed to make available to the Borrowers a revolving credit facility
of up to $125,000,000, the Swingline Bank has agreed to make available to
the Swingline Borrower a swingline facility of up to $18,000,000, the
Overdraft Bank has agreed to make available to the Overdraft Borrowers an
overdraft facility of up to(pound)4,000,000 and the Banks have agreed to
make available to the Borrowers a revolving credit facility of up to
$125,000,000.
(B) The Parent has undertaken to procure that certain Subsidiaries enter into
guarantees as security for the obligations contained in the Agreement.
IT IS AGREED as follows:
1 Interpretation
1.1 Defined expressions
In this Guarantee, unless the context otherwise requires or unless
otherwise defined in this Guarantee, words and expressions defined in the
Agreement shall have the same meaning where used in this Guarantee. In
addition clause 1.4 of the Agreement shall be deemed to be incorporated in
full in this Guarantee on the basis that references in such clause 1.4 to
"this Agreement" were references to this Guarantee.
1.2 Successors and assigns
The expressions "Agent", "Arrangers", "Banks", "Beneficiaries",
"Borrowers", "Company", "Finance Party", "Overdraft Bank", "Security
Provider", "Security Trustee" and "Swingline Bank" include, where the
context admits, their respective successors, in the case of the Banks their
respective permitted transferees and assignees, whether immediate or
derivative, in the case of the Security Trustee, such other person as may
from time to time be appointed as security trustee for the Beneficiaries
pursuant to the provisions of the Security Trust Deed and, in the case of
the Agent, such other persons as may be appointed as Agent pursuant to the
provisions of the Agreement.
1.3 Definitions
In this Guarantee, unless the context otherwise requires:
"Beneficiaries" has the meaning given to the term in the Security Trust
Deed;
"Collateral Instruments" means negotiable and non-negotiable instruments,
guarantees and any other documents or instruments which contain or evidence
an obligation (with or without security) to pay, discharge or be
responsible directly or indirectly for, any liabilities of any person and
includes any document or instrument creating or evidencing an Encumbrance;
"Guarantee" includes each separate or independent stipulation or agreement
by the Guarantor contained in this Guarantee;
"Guaranteed Liabilities" means all moneys, obligations and liabilities
expressed to be guaranteed by the Guarantor in clause 2.1; and
"Incapacity" means in relation to a person the insolvency, liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or other incapacity of that person whatsoever (and, in the
case of a partnership, includes the termination or change in the
composition of the partnership).
1.4 Headings
Clause headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this Guarantee.
2 Guarantee
2.1 Guarantee
The Guarantor hereby irrevocably and unconditionally guarantees that it
will on demand made on it by the Security Trustee pay to the Security
Trustee for the account of the relevant Beneficiaries all moneys and
discharge all obligations and liabilities whether actual or contingent now
or hereafter due, owing or incurred to the Agent, the Arrangers, the
Security Trustee, the Banks, the Swingline Bank, or the Overdraft Bank (or
any of them) by the Borrowers (or any of them) under or pursuant to the
Agreement and/or this Guarantee and/or the Security Trust Deed and/or any
of the other Security Documents, in each case when the same become due for
payment or discharge whether by acceleration or otherwise, and whether such
moneys, obligations and liabilities are express or implied; present, future
or contingent; joint or several; incurred as principal or surety;
denominated in Dollars, Sterling or in any other currency together with
commission, fees and other charges and all legal and other costs charges
and expenses on a full indemnity basis which may be properly incurred by
the Beneficiaries or any of them in relation to any such moneys,
obligations or liabilities or generally in respect of such Guarantor.
2.2 Guarantor as principal debtor; indemnity
As a separate and independent stipulation, the Guarantor irrevocably and
unconditionally agrees that if any purported obligation or liability of any
Borrower which would have been the subject of this Guarantee had it been
valid and enforceable is not or ceases to be valid or enforceable against
such Borrower on any ground whatsoever whether or not known to the
Beneficiaries or any of them (including, without limitation, any irregular
exercise or absence of any corporate power or lack of authority of, or
breach of duty by, any person purporting to act on behalf of such Borrower
or any legal or other limitation, whether under the Limitation Acts or
otherwise or any disability or Incapacity or any change in the constitution
of such Borrower) the Guarantor shall nevertheless be liable in respect of
that purported obligation or liability as if the same were fully valid and
enforceable and the Guarantor were the principal debtor in respect thereof.
The Guarantor hereby irrevocably and unconditionally agrees to indemnify
and keep indemnified the Beneficiaries against any loss or liability
arising from any failure of any Borrower to perform or discharge any such
purported obligation or liability or from any invalidity or
unenforceability of any of the same against such Borrower.
2.3 Statements of account conclusive
Any statement of account of the Borrowers in reasonable detail, signed as
correct by an officer of the Security Trustee, showing the amount of the
Guaranteed Liabilities shall, in the absence of manifest error, be prima
facie evidence thereof.
2.4 Interest
The Guarantor agrees to pay interest on each amount demanded of it under
this Guarantee from the date of such demand until payment (as well after as
before judgment) at the rate specified in clause 5.5 of the Agreement which
shall apply to this Guarantee mutatis mutandis.
2.5 Continuing guarantee
This Guarantee shall extend to the ultimate balance from time to time owing
to the Beneficiaries by the Borrowers and shall be a continuing guarantee,
notwithstanding any intermediate payment, partial settlement or other
matter whatsoever.
2.6 Liability unconditional
The liability of the Guarantor shall not be affected nor shall this
Guarantee be discharged or reduced by reason of:
(a) the Incapacity or any change in the name, style or constitution of any
Borrower or any other person liable;
(b) any of the Beneficiaries granting any time, indulgence or concession
to, or compounding with, discharging, releasing or varying the
liability of, any Borrower or any other person liable; or
(c) any amendment, variation or waiver (however material or fundamental)
of the Agreement or any Security Document; or
(d) any act or omission which would not have discharged or affected the
liability of the Guarantor had it been a principal debtor instead of a
guarantor or by anything done or omitted which but for this provision
might operate to exonerate the Guarantor.
2.7 Collateral Instruments
Neither the Security Trustee nor any other Beneficiary shall be obliged to
make any claim or demand on the Borrowers or to resort to any Collateral
Instrument or other means of payment before enforcing this Guarantee and no
action taken or omitted in connection with any such Collateral Instrument
or other means of payment shall discharge, reduce, prejudice or affect the
liability of the Guarantor under this Guarantee.
2.8 Waiver of Guarantor's rights
Until all the Guaranteed Liabilities have been paid, discharged or
satisfied in full (and notwithstanding payment of a dividend in any
liquidation or under any compromise or arrangement) the Guarantor agrees
that it will not in connection with the Guaranteed Liabilities (without the
prior written consent of the Security Trustee or other than as permitted
under the terms of the Agreement):
(a) exercise any rights of subrogation, contribution or indemnity against
the Borrowers or any other person liable;
(b) demand or accept any Encumbrance to be granted in respect of any of
its obligations under this Guarantee or any other Indebtedness now or
hereafter due to the Guarantor from the Borrowers or from any other
person liable;
(c) take any step to enforce any right against the Borrowers or any other
person liable in respect of any Guaranteed Liabilities; or
(d) exercise any right of set-off or counterclaim against the Borrowers or
any other person liable or claim or prove or vote as a creditor in
competition with the Beneficiaries in the liquidation, administration
or other insolvency proceeding of any Borrower or any other person
liable or have the benefit of, or share in, any payment from or
composition with, any Borrower or any other person liable or any
Collateral Instrument now or hereafter held by the Beneficiaries for
any Guaranteed Liabilities or for the obligations or liabilities of
any other person liable.
2.9 Suspense accounts
All monies received by the Security Trustee shall be applied in or towards
satisfaction of such of the Guaranteed Liabilities in accordance with the
terms of the Security Trust Deed except that the Security Trustee may
credit the same to a suspense account for so long and in such manner as the
Security Trustee may from time to time determine.
2.10 Guarantor to deliver up certain property
If, contrary to clause 2.8, the Guarantor takes or receives the benefit of
any Encumbrance, other than a Permitted Encumbrance or other than as
permitted under the terms of the Agreement, or receives or recovers any
money or other property, such Encumbrance, money or other property shall be
held on trust for the Beneficiaries and shall be delivered to the Security
Trustee on written demand for application in accordance with the terms of
the Security Trust Deed.
2.11 Other guarantors
The Guarantor agrees:
(a) to be bound by this Guarantee notwithstanding that any other person
intended to execute or to be bound by any other guarantee or assurance
under or pursuant to the Agreement may not do so or may not be
effectively bound and notwithstanding that such other guarantee or
assurance may be determined to be or be or become invalid or
unenforceable against any other person, whether or not the deficiency
is known to the Beneficiaries or any of them; and
(b) that its obligations under this Guarantee will not be affected in any
way by any Subsidiary of the Parent becoming a Guarantor after the
date of this Guarantee.
3 Payments and Taxes
3.1 No set-off or counterclaim; distribution to the Banks
All payments to be made by the Guarantor under this Guarantee shall be made
in full, without any set-off or counterclaim whatsoever and, subject as
provided in clause 3.2, free and clear of any deductions or withholdings,
in Dollars, Sterling or the relevant Optional Currency (except for costs,
charges and expenses which shall be payable in the currency in which they
are incurred) on demand by the Security Trustee to the account of the
Security Trustee at such bank as the Security Trustee may from time to time
specify for this purpose. Save where the Agreement or the relevant Security
Document specifically provides for a payment to be made for the account of
a particular Beneficiary in which case the Security Trustee shall
distribute the relevant payment to the Beneficiary concerned, payments to
be made by the Guarantor under this Guarantee shall be for the account of
all the Beneficiaries and the Security Trustee shall forthwith distribute
such payments in like funds as are received by the Security Trustee to the
Beneficiaries in accordance with the provisions of the Security Trust Deed.
3.2 Grossing-up for Taxes and other matters
Clauses 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, 10.13 and 10.14
of the Agreement shall apply as if the same were set out in full in this
Guarantee, mutatis mutandis.
3.3 Currency of account; Currency indemnity
Clause 15.2 of the Agreement shall apply as if it were set out in full in
this Guarantee, mutatis mutandis.
4 Representations and warranties
4.1 Representations and warranties
The Guarantor represents and warrants to the Security Trustee (for the
benefit of each of the Beneficiaries) that:
(a) Due incorporation: it is duly established or incorporated [(and [in
the case of a corporation incorporated in the United States], validly
existing and in good standing)] under the laws of o as a limited
liability company and has power to carry on its business as it is now
being conducted and to own its property and other assets;
(b) Corporate power to guarantee: it has power to execute, deliver and
perform its obligations under this Guarantee; all necessary corporate,
shareholder and other action has been taken to authorise the
execution, delivery and performance of the same and no limitation on
its power to guarantee will be exceeded as a result of entering into
this Guarantee;
(c) Binding obligations: this Guarantee constitutes valid and legally
binding obligations of the Guarantor save as disclosed in the
qualifications to the legal opinions delivered under part C of
schedule 4 of the Agreement;
(d) No filings required: any notarisation, filing, recording, registration
or enrolment in any court, public office or elsewhere and any stamp,
registration or similar tax or charge payable on or in relation to
this Guarantee necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Guarantee has been
made or paid and this Guarantee is in proper form for its enforcement
in the courts of England and o [relevant exceptions to be noted]; and
(e) Choice of law: the choice by the Guarantor of English law to govern
this Guarantee [and the submission by the Guarantor to the
non-exclusive jurisdiction of the High Court of Justice in England] is
[are] valid and binding save as disclosed in the legal opinions
provided under part C of schedule 4 of the Agreement.
4.2 Repetition
The representations and warranties in clause 4.1 shall be deemed to be
repeated by the Guarantor on and as of each Drawdown Date and each
Repayment Date as if made with reference to the facts and circumstances
existing on each such day.
5 Set-off and Pro rata Payments
5.1 Set-off
The Guarantor authorises each Beneficiary to apply any credit balance to
which the Guarantor is then entitled on any account of the Guarantor with
such Beneficiary at any of its branches in or towards satisfaction of any
sum then due and payable from the Guarantor to such Beneficiary under this
Guarantee. For this purpose each Beneficiary is authorised to purchase with
the moneys standing to the credit of such account such other currencies as
may be necessary to effect such application. No Beneficiary shall be
obliged to exercise any right given to it by this clause 5.1. Each
Beneficiary shall notify the Security Trustee and the Guarantor forthwith
upon the exercise or purported exercise of any right of set-off giving full
details in relation thereto and the Security Trustee shall inform the other
Beneficiaries.
5.2 Pro rata payments
The Guarantor acknowledges and accepts the provisions of clause 17.2 of the
Agreement.
6 Benefit of this Guarantee
6.1 Benefit and burden
This Guarantee shall be binding upon the Guarantor and its successors in
title and shall enure for the benefit of the Security Trustee, for the
benefit of itself and each of the other Beneficiaries and their respective
successors in title and (in the case of the Banks) their Substitutes. The
Guarantor expressly acknowledges and accepts the provisions of clause 18 of
the Agreement and agrees that any Substitute which becomes party to the
Agreement in accordance with clause 18 of the Agreement shall be entitled
to the benefit of this Guarantee.
6.2 Changes in constitution or reorganisations of Banks
For the avoidance of doubt and without prejudice to the provisions of
clause 6.1, this Guarantee shall remain binding on the Guarantor
notwithstanding any change in the constitution of the Beneficiaries or any
of them or their or its absorption in, or amalgamation with, or the
acquisition of all or part of their or its undertaking or assets by, any
other person, or any reconstruction or reorganisation of any kind, to the
intent that this Guarantee shall remain valid and effective in all respects
in favour of any assignee, transferee or other successor in title of the
Beneficiaries in the same manner as if such assignee, transferee or other
successor in title had been named in this Guarantee as a party instead of,
or in addition to, the relevant Beneficiary.
6.3 No assignment by Guarantor
The Guarantor may not assign or transfer any of its rights or obligations
under this Guarantee.
6.4 Disclosure of information
Any Beneficiary may disclose to a prospective assignee or transferee or to
any other person who may propose entering into contractual relations with
such Beneficiary in relation to the Agreement such information about the
Guarantor as such Beneficiary shall consider appropriate provided that such
Beneficiary will obtain an undertaking from such assignee or transferee to
keep such information confidential and only disclose it as required by law.
7 The Security Trust Deed
7.1 Trust: The Guarantor and the Security Trustee hereby acknowledge that the
covenants of the Guarantor contained in this Guarantee and the security and
other rights, title and interests constituted by this Guarantee and all
other moneys, property and assets paid to the Security Trustee pursuant to
or in connection with this Guarantee are held by the Security Trustee
subject to and on the terms of the trusts declared in the Security Trust
Deed.
8 Release of security
8.1 Release of guarantee
If the Security Trustee is satisfied:
(i) that:
(A) no Default has occurred; and
(B) the proposed release is to permit a disposal of the Guarantor,
and such disposal is not prohibited by the terms of the
Agreement; or
(ii) that all the Guaranteed Liabilities have been paid or discharged in
full and the Facilities provided by the Agreement are no longer
available,
then, subject to clause 8.2, the Security Trustee shall at the request and
cost of the Guarantor execute such deeds and do all such acts and things as
may be necessary to release the Guarantor from its guarantee.
8.2 Retention of Deed
If the Guarantor requests the Security Trustee to release its guarantee
following any payment or discharge made or security or guarantee given in
relation to the Guaranteed Liabilities by the Guarantor or any other person
liable (a "Relevant Transaction"), the Security Trustee shall be entitled,
if it is satisfied (acting reasonably) that the Guarantor or such other
person (as relevant) is (or is as a consequence of that Relevant
Transaction) Insolvent, to retain this Deed and shall not be obliged to
release the Guarantor from its guarantee until the expiry of the Retention
Period (as hereinafter defined) in relation to that Relevant Transaction
(as hereinafter defined). If at any time before the expiry of that
Retention Period any event takes place in relation to the Guarantor or such
other person which corresponds to any of the events set out in clauses
14.1(j) to 14.1(n) of the Agreement, the Security Trustee may continue to
retain this Deed and shall not be obliged to release the guarantee for such
further period as the Security Trustee may determine.
(For the purpose of clause 8.2:
"Retention Period" means, in relation to any Relevant Transaction, the
period which commences on the date when that Relevant Transaction was made
or given, and which ends on the date falling one week after the expiration
of the maximum period within which that Relevant Transaction can be
avoided, reduced or invalidated by virtue of any applicable law or for any
other reason whatsoever) and;
"Insolvent" means that the company (i) is deemed unable to pay its debts in
accordance with section 123(1)(e) or (2) of the Insolvency Act 1986 (as
that section may be amended by order under section 416 of the Insolvency
Act 1986 or otherwise and so that in sub-section (1)(e) and sub-section (2)
of section 123 the words "it is proved to the satisfaction of the court
that" shall be deemed to be deleted) or (ii) becomes, or admits to being,
unable generally to pay its debts as they fall due or (iii) otherwise
becomes insolvent or stops or suspends making payments (whether of
principal or interest) with respect to all or any class of its debts or
announces an intention to do so or (iv) there occurs, in relation to that
company in any country or territory in which it carries on business or to
the jurisdiction of whose courts any part of its assets is subject, any
event which, in the opinion of the Security Trustee, (acting reasonably)
has an effect equivalent to any of (i), (ii) or (iii) above.
9 Notices and other matters
9.1 Notice
Every notice, request, demand or other communication under this Guarantee
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in this
Guarantee, in the case of a letter when delivered and, in the case of
a telefax, when a complete and legible copy is received by the
addressee (unless the date of despatch is not a business day in the
country of the addressee or if the time of despatch of any telefax is
after the close of business in the country of the addressee in which
case it shall be deemed to have been received at the opening of
business on the next such business day); and
(c) be sent:
(i) to the Guarantor at:
o
o
Telefax: o
Attention: o
(ii) to the Security Trustee at:
HSBC Investment Bank plc
Vintners Place
68 Upper Thames Street
London EC4V 3BJ
Telefax: 020 7336 9176
Attention: Syndicated Finance - Execution and Agency
or to such other address or telefax number as is notified by
the Guarantor or the Security Trustee to the other party to
this Guarantee.
9.2 No implied waivers, remedies cumulative
No failure or delay on the part of the Beneficiaries or any of them to
exercise any power, right or remedy under this Guarantee shall operate as a
waiver thereof, nor shall any single or partial exercise by the
Beneficiaries or any of them of any power, right or remedy preclude any
other or further exercise thereof or the exercise of any other power, right
or remedy. The remedies provided in this Guarantee are cumulative and are
not exclusive of any remedies provided by law.
9.3 Expenses
The Guarantor agrees to reimburse the Security Trustee on demand for all
legal and other costs, charges and expenses on a full and unqualified
indemnity basis which may be properly incurred by the Beneficiaries in
relation to the enforcement of this Guarantee against the Guarantor.
9.4 Authority given to Parent
The Guarantor hereby irrevocably authorises the Parent to execute any duly
executed Borrower Accession Agreement on its behalf.
10 Governing Law and Jurisdiction
10.1 Law
This Guarantee shall be governed by English law.
10.2 [Submission to jurisdiction
The parties to this Guarantee agree for the benefit of the Beneficiaries
that:
(a) if any party has any claim against any other arising out of or in
connection with this Guarantee such claim shall (subject to clause c)
be referred to the High Court of Justice in England, to the
jurisdiction of which each of the parties irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over any such
claim against any Beneficiary shall be an exclusive jurisdiction and
no courts outside England shall have jurisdiction to hear or determine
any such claim; and
(c) nothing in this clause 10.2 shall limit the right of any Beneficiary
to refer any such claim against the Guarantor to any other court of
competent jurisdiction outside England, to the jurisdiction of which
the Guarantor hereby irrevocably agrees to submit, nor shall the
taking of proceedings by any Beneficiary before the courts in one or
more jurisdictions preclude the taking of proceedings in any other
jurisdiction whether concurrently or not.]
10.3 Agent for service of process
The Guarantor irrevocably and unconditionally, designates, appoints and
empowers the Parent to receive for it and on its behalf service of process
issued out of the High Court of Justice in England in relation to any claim
arising out of or in connection with this Guarantee.]
IN WITNESS whereof the parties to this Guarantee have caused this Guarantee to
be duly executed on the date first above written.
THE GUARANTORS
EXECUTED and DELIVERED ) Director
as a DEED by o ) Director/Secretary
THE SECURITY TRUSTEE
Signed for and on behalf of )
HSBC INVESTMENT BANK PLC )
By: )
Schedule 12
Permitted Acquisitions
1 The D Acquisition provided that prior to entering into the D Acquisition
Agreement the Parent delivers to the Agent a certificate from an Authorised
Officer of the Parent, dated no earlier than 2 Banking Days prior to the
entry into of the D Acquisition Agreement by any member of the Group,
confirming that the terms of the D Acquisition Agreement will be in all
material respects consistent with those set out in the M.O.U. and that to
the best of the knowledge of the directors of the Parent, there has been no
material adverse change in the financial position or prospects of the D
Group from that set forth in the D Due Diligence.
2 The acquisition of Waterloo Corporation by the Parent, or a wholly owned
subsidiary of the Parent, by means of a merger involving a share-for-share
exchange upon substantially the terms described in the press release
announcing the acquisition (the "Press Announcement") provided that the
Agent shall have received:
(a) a duly certified copy of the Press Announcement;
(b) evidence that the Parent, or its wholly owned subsidiary, has received
stockholder agreements from shareholders together holding at least
50.1% of the outstanding share capital of Waterloo to vote their
shares in favour of the adoption and approval of the Agreement and
Plan of Merger effecting such acquisition and;
(c) a certificate from an Authorised Officer of the Parent confirming
that, as of the date of the Press Announcement and to the best of the
knowledge of the directors of the Parent, there has been no material
adverse change in the financial position or prospects of the Waterloo
Group from that set forth in the Waterloo Information Package.
3 The acquisitions listed below provided that the total acquisition
consideration payable by the Group in respect of such acquisition
(including for these purposes any deferred consideration) does not exceed
the maximum consideration for such acquisition contained in the acquisition
agreement as at the date of this Agreement relating to the acquisition
concerned.
- --------------------------------- ------------ -------------------------------
Company Country Basis of acquisition payment
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Harrow/Expanded Media Australia Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Scholz & Friends Berlin Germany Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Not Just Film Holland Holland Put/call option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Bates Poland - start-up Poland Put/call option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Gestro Home New Zealand Put option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Kontoret Norway Put/call option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Idea Azione Germany Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Criterion USA Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Argentina Argentina Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Grapple Group South Africa Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Churchill USA Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
New Comm. Comm Brazil Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Rodergas Spain Contractual purchase of
shares
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
PanGulf Dubai Contractual purchase of
shares
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Cronet Sweden Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
LdV Belgium Put/call option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Blue Skies UK Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Clarion India Contractual purchase of
shares
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Romania Romania Put/call option
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Falk Communications, Inc. US Earnout
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
HFT Group (80%) Earnout
(20%) Buyout of Minority
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
CPA Espana, S.L. Spain Contractual Purchase of
Shares
- --------------------------------- ------------- ------------------------------
- --------------------------------- ------------- ------------------------------
Colwood House Medical UK Contractual Purchase of
Publications (UK) Limited Shares
- --------------------------------- ------------- ------------------------------
THE PARENT
SIGNED for and on behalf of)
CORDIANT COMMUNICATIONS ) ARTHUR D'ANGELO
GROUP PLC )
by: )
THE ORIGINAL BORROWERS
SIGNED for and on behalf of)
CORDIANT COMMUNICATIONS ) ARTHUR D'ANGELO
GROUP PLC )
by: )
SIGNED for and on behalf of)
BATES UK LIMITED ) ARTHUR D'ANGELO
by: )
SIGNED for and on behalf of)
BATES US HOLDINGS INC. ) ARTHUR D'ANGELO
by: )
SIGNED for and on behalf of)
BATES DEUTSCHLAND ) ARTHUR D'ANGELO
HOLDINGS GMBH )
by: )
THE ARRANGERS
SIGNED for and on behalf of)
THE BANK OF NEW YORK ) PAUL D. RIVERS
by: )
SIGNED for and on behalf of)
HSBC INVESTMENT BANK PLC ) MARK NICKELL
by: )
THE BANKS
SIGNED for and on behalf of)
THE BANK OF NEW YORK ) PAUL D. RIVERS
by: )
SIGNED for and on behalf of)
HSBC BANK PLC ) GARY LEE
by: )
THE AGENT AND SECURITY TRUSTEE
SIGNED for and on behalf of)
HSBC INVESTMENT BANK PLC ) DAVID STENT
by: )
THE SWINGLINE BANK
SIGNED for and on behalf of)
THE BANK OF NEW YORK ) PAUL D. RIVERS
by: )
THE OVERDRAFT BANK
SIGNED for and on behalf of)
HSBC BANK PLC ) GARY LEE
by: )