Exhibit 4.3
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CORDIANT FINANCE, INC., as Issuer
CORDIANT COMMUNICATIONS GROUP PLC, as Parent Guarantor
$175,000,000
Amended and Restated
Guaranteed Senior Notes due 2011
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AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
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Dated as of April 19, 2002
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Table of Contents
Page
1. PRELIMINARY STATEMENT.....................................................1
2. AMENDMENT AND RESTATEMENT; WAIVER; OTHER ARRANGEMENTS.....................2
2.1. Amendment and Restatement of Existing Note Purchase
Agreement and Existing Notes.....................................2
2.2. Amendment and Restatement of Existing Parent Guarantee...........3
2.3. Guarantees.......................................................3
2.4. Security for the Notes; Common Security Trust Deed...............3
2.5. Waiver of Defaults and Events of Default.........................4
3. EFFECTIVENESS OF RESTRUCTURING TRANSACTION................................4
4. CONDITIONS TO THE EFFECTIVE DATE..........................................4
4.1. Representations and Warranties...................................5
4.2. Performance; No Default..........................................5
4.3. Certificates of Compliance.......................................5
4.4. Opinions of Counsel..............................................5
4.5. Subsidiary Guarantees; Security Documents........................6
4.6. Purchase Permitted by Applicable Law, etc........................6
4.7. Payment of Fees and Expenses.....................................7
4.8. Capital Structure................................................7
4.9. Syndicated Loan Agreement; Bridge Loan Agreement.................8
4.10. Intercreditor Agreement and Common Security Trust Deed...........8
4.11. Hedging Strategy Letter..........................................8
4.12. Security Memorandum..............................................9
4.13. Accountants Reports..............................................9
4.14. Financial Model; Consents; Group Structure Charts................9
4.15. Consolidated Financial Statements of the Group...................9
4.16. Consents, Authorizations, Licenses and Approval..................9
4.17. Utilization of Facilities under Syndicated Loan Agreement.......10
4.18. Permitted Encumbrances..........................................10
4.19. Permitted Borrowed Money........................................10
4.20. Letter from the Company's Auditors..............................10
4.21. Zenith Optimedia Group Limited..................................10
4.22. Repayment of the Korean Debenture Stock.........................11
4.23. Proceedings and Documents.......................................11
5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE COMPANY.............11
5.1. Organization; Power and Authority...............................11
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5.2. Authorization, etc..............................................12
5.3. Disclosure......................................................12
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates......................................................12
5.5. Financial Statements............................................13
5.6. Compliance with Laws, Other Instruments, etc....................14
5.7. Governmental Authorizations, etc................................14
5.8. Litigation; Observance of Agreements, Statutes and Orders.......14
5.9. Taxes...........................................................15
5.10. Title to Property; Leases.......................................15
5.11. Licenses, Permits, etc..........................................15
5.12. ERISA; Foreign Plans............................................16
5.13. Private Offering................................................17
5.14. Use of Proceeds; Margin Regulations.............................17
5.15. Existing Borrowed Money; Future Encumbrances....................18
5.16. Foreign Assets Control Regulations, etc.........................18
5.17. Status Under Certain Statutes...................................18
5.18. Environmental Matters...........................................19
5.19. Solvency of Subsidiary Guarantors; Priority of Obligations......19
5.20. No Defaults or Events of Default................................20
5.21. Group Structure Charts..........................................20
5.22. Investment Company..............................................20
5.23. Choice of Law...................................................20
5.24. Intellectual Property Rights....................................20
5.25. Zenith Joint Venture Agreement; Other Agreements................21
5.26. Clean Company...................................................21
5.27. Charged Assets..................................................22
5.28. No Borrowed Money or Encumbrances...............................22
6. REPRESENTATIONS OF THE NOTEHOLDERS.......................................22
6.1. Purchase of Existing Notes......................................22
6.2. Source of Funds.................................................22
7. INFORMATION AS TO COMPANY................................................23
7.1. Prior to the Put Elimination Date...............................23
7.2. On the Put Elimination Date and Thereafter......................29
7.2.1. Financial and Business Information..............................29
7.2.2. Officer's Certificate...........................................33
7.2.3. Inspection......................................................34
7.3. Limitation on Disclosure Obligation.............................35
8. PAYMENTS.................................................................36
8.1. Interest; PIK Management Fees...................................36
8.2. Required Prepayments............................................39
8.3. Optional Prepayments with Make-Whole Amount.....................39
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8.4. Prepayment Event................................................40
8.5. Disposal Proceeds...............................................40
8.6. Rights Issues, Equity Raising, Etc..............................42
8.7. Zenith Proceeds.................................................42
8.8. Refinancing of Syndicated Loan Agreement........................43
8.9. Change of Control...............................................46
8.10. Allocation of Partial Prepayments...............................48
8.11. Maturity; Surrender, etc........................................48
8.12. Purchase of Notes...............................................48
8.13. Make-Whole Amount...............................................49
8.14. Deferred Make-Whole Amount......................................51
8.15. Payments Subject to Intercreditor Agreement.....................51
9. AFFIRMATIVE COVENANTS....................................................51
9.1. Prior to the Put Elimination Date...............................51
9.1.1. Compliance with Law.............................................52
9.1.2. Corporate Existence, etc........................................52
9.1.3. Consents and Licenses...........................................52
9.1.4. Proceeds from Syndicated Loan Agreement.........................52
9.1.5. Pari Passu......................................................52
9.1.6. Tax.............................................................53
9.1.7. Pension Schemes.................................................53
9.1.8. Interest Rate Hedging and Foreign Exchange Hedging..............53
9.1.9. ERISA...........................................................53
9.1.10. Margin Stock.................................................54
9.1.11. Guarantees and Security from Material Subsidiaries...........54
9.1.12. Preference Shares............................................56
9.1.13. Environmental................................................56
9.1.14. Cash Management Arrangements.................................56
9.2. Following the Put Elimination Date..............................57
9.2.1. Compliance with Law.............................................57
9.2.2. Corporate Existence, etc........................................57
9.2.3. Mainenance of Committed Medium-Term Bank Facilities.............57
9.3. Generally.......................................................58
9.3.1. Insurance.......................................................58
9.3.2. Maintenance of Properties.......................................58
9.3.3. Payment of Taxes and Claims.....................................58
9.3.4. Lines of Business...............................................59
9.3.5. Additional Subsidiary Guarantors; Release of Subsidiary
Guarantors......................................................59
9.3.6. Zenith and Facilities Group.....................................60
9.3.7. Executive Order 13224 of September 23, 2001.....................62
9.3.8. Audited Financial Statements for Fiscal Year 2001...............62
9.3.9. Cordiant Communications Group Australia Pty Limited.............62
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10. NEGATIVE COVENANTS.......................................................62
10.1. Prior to the Put Elimination Date...............................62
10.1.1. Negative Pledge..............................................62
10.1.2. Other Borrowed Money and Finance Transactions................63
10.1.3. No Amalgamation and Merger...................................63
10.1.4. Disposals....................................................63
10.1.5. Loans and Guarantees......................................63
10.1.6. Acquisitions..............................................64
10.1.7. Change of Business..............................................64
10.1.8. Preference Shares...............................................64
10.1.9. Transactions Similar to Security................................64
10.1.10. Rights Issue/Equity Raising.....................................65
10.1.11. Dividends and Other Distributions...............................65
10.1.12. Accounting Policy...............................................67
10.1.13. Accounting Reference Date.......................................68
10.1.14. Cash Management Arrangements....................................68
10.2. Following the Put Elimination Date..............................68
10.2.1. Encumbrances....................................................68
10.2.2. Subsidiary Borrowings...........................................69
10.2.3. Asset Dispositions..............................................69
10.2.4. Transactions with Affiliates....................................71
10.2.5. "Off-Balance Sheet" Transactions................................71
10.3. Generally.......................................................72
10.3.1. Maintenance of Financial Conditions.............................72
10.3.2. Maintenance of Most Favored Lender Status.......................74
10.3.3. Merger, Consolidation, Amalgamation, etc........................75
11. EVENTS OF DEFAULT........................................................76
12. REMEDIES ON DEFAULT, ETC.................................................82
12.1. Acceleration....................................................82
12.2. Other Remedies..................................................83
12.3. Rescission......................................................83
12.4. No Waivers or Election of Remedies, Expenses, etc...............84
13. PARENT GUARANTEE.........................................................84
13.1. Guarantee.......................................................84
13.2. Subrogation and Contribution....................................86
14. TAX INDEMNIFICATION......................................................87
15. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................89
15.1. Registration of Notes...........................................89
15.2. Transfer and Exchange of Notes..................................89
15.3. Replacement of Notes............................................90
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16. PAYMENTS ON NOTES........................................................91
16.1. Place of Payment................................................91
16.2. Home Office Payment.............................................91
17. EXPENSES, ETC............................................................91
17.1. Transaction Expenses............................................91
17.2. Survival........................................................92
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.............92
19. AMENDMENT AND WAIVER.....................................................93
19.1. Requirements....................................................93
19.2. Solicitation of Holders of Notes................................93
19.3. Binding Effect, etc.............................................94
19.4. Notes held by the Issuer, etc...................................94
20. NOTICES..................................................................94
21. REPRODUCTION OF DOCUMENTS................................................95
22. CONFIDENTIAL INFORMATION.................................................95
23. SUBSTITUTION OF NOTEHOLDERS..............................................96
24. MISCELLANEOUS............................................................97
24.1. Successors and Assigns..........................................97
24.2. Construction....................................................97
24.3. Jurisdiction and Process; Waiver of Jury Trial; Judgment
Currency........................................................97
24.4. Payments Due on Non-Business Days...............................99
24.5. Severability....................................................99
24.6. Accounting Terms...............................................100
24.7. Counterparts...................................................100
24.8. Governing Law..................................................100
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Schedule A -- Names and Addresses of Noteholders
Schedule B -- Defined Terms
Exhibit 2.1 -- Form of Amended and Restated Guaranteed Senior
Exhibit 1.2 -- Form of Subsidiary Guarantee
Note due 2011
Exhibit 4.12 -- Form of Security Memorandum
Schedule 1.3 -- Existing Subsidiary Guarantors
Exhibit 9.3.5 -- Documents to Be Delivered by each additional Subsidiary
Guarantor pursuant to Section 9.3.5
Schedule 5.4 -- Subsidiaries, etc.
Schedule 5.5 -- Financial Statements
Schedule 5.15 -- Existing Indebtedness
Schedule 9.1.12 -- Preference Shares
Schedule 9.1.14 -- Cash Pooling Arrangements
Schedule 10.1.1 -- Permitted Encumbrances
Schedule 10.1.2 -- Permitted Guarantees
Schedule 10.1.6 -- Permitted Acquisitions
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CORDIANT FINANCE, INC.
CORDIANT COMMUNICATIONS GROUP PLC
Amended and Restated
Guaranteed Senior Notes due 2011
As of April 19, 2002
TO EACH OF THE NOTEHOLDERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
CORDIANT FINANCE, INC., a Delaware corporation (the "Issuer"), and CORDIANT
COMMUNICATIONS GROUP PLC (Registered No. 1320869), a public limited liability
company organized under the laws of England and Wales (the "Company" or the
"Parent"), jointly and severally agree with each of you (collectively, the
"Noteholders", which expression shall include your respective successors and
assigns and each holder from time to time of a "Note" (as hereinafter defined))
as follows:
1. PRELIMINARY STATEMENT.
1.1 Pursuant to those certain Note Purchase Agreements, dated April 5, 2001
(collectively, the "Existing Note Purchase Agreements"), among the Issuer, the
Company and the purchasers named in Schedule A thereto, the Issuer heretofore
issued $175,000,000 aggregate principal amount of its 7.61% Guaranteed Senior
Notes due 2011 (collectively, the "Existing Notes"), substantially in the form
attached to the Existing Note Purchase Agreements as Exhibit 1.1.
1.2 The Parent unconditionally guaranteed all of the obligations of the
Issuer under the Existing Notes and the Existing Note Purchase Agreements
(including, in each case, any amendments, restatements or modifications thereof
from time to time), pursuant to the guarantee contained in Section 13 of the
Existing Note Purchase Agreements (the "Existing Parent Guarantee").
1.3 The obligations of the Issuer and the Company under the Existing Notes
and the Existing Note Purchase Agreements (including, in each case, any
amendments, restatements or modifications thereof from time to time), were also
guaranteed by the Subsidiaries whose names are set out in Schedule 1.3 of the
Existing Note Purchase Agreements (collectively, the "Existing Subsidiary
Guarantors") pursuant to separate guarantee agreements, dated April 5, 2001
(collectively, the "Existing Subsidiary Guarantees"), substantially in the form
attached to the Note Purchase Agreements as Exhibit 1.2.
1.4 The Issuer and the Company have requested the amendment and
restatement, in their entirety, of the Existing Note Purchase Agreements, the
Existing Notes and the Existing Parent Guarantee, as provided for herein.
2. AMENDMENT AND RESTATEMENT; WAIVER; OTHER ARRANGEMENTS.
2.1. Amendment and Restatement of Existing Note Purchase Agreement and
Existing Notes.
(a) Amendment and Restatement of Existing Note Purchase Agreement and
Existing Notes. The parties hereto agree that on the Effective Date (i) the
Existing Note Purchase Agreements (including the schedules and exhibits
thereto) will be hereby amended and restated in its entirety by this
Agreement and (ii) the form of each Existing Note will be hereby amended
and restated in its entirety as set forth in Exhibit 2.1 (each such
amendment and restatement, together with the other transactions
contemplated by this Agreement, being referred to herein, collectively, as
the "Restructuring Transaction"). The Existing Notes, as amended and
restated pursuant to this Agreement or as further amended, restated or
otherwise modified from time to time, are hereinafter referred to as the
"Notes").
(b) Delivery of Amended and Restated Notes. The Existing Notes
outstanding on the Effective Date are hereby, without any further action
being required on the part of the Noteholders thereof or on the part of any
other Person, deemed to be automatically amended to conform to, and have
the terms provided in, the form of Notes set forth in Exhibit 2.1
(including, without limitation, all terms requiring the payment of interest
at increased rates (as provided therein)). The Existing Notes shall be and
are entitled to all of the rights and benefits provided therefor in this
Agreement. Upon the request of any holder of a Note made in accordance with
Section 15.2 of this Agreement, the Issuer shall deliver, pursuant to
Section 15.2 of this Agreement, a new Note, against surrender (subject to
Section 15.3 of this Agreement) of such Noteholder's Existing Note.
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2.2. Amendment and Restatement of Existing Parent Guarantee.
The Parent and the Noteholders agree that on the Effective Date the
Existing Parent Guarantee will be hereby incorporated in this Agreement and
amended and restated in its entirety as set forth in Section 13 of this
Agreement (the "Parent Guarantee").
2.3. Guarantees.
Payment by the Issuer and the Company of all amounts due with respect to
the Notes and performance by the Issuer and the Company of their respective
obligations under this Agreement will be absolutely, unequivocally and
unconditionally guaranteed by certain of the Company's Subsidiaries as described
in the Security Memorandum (collectively, the "New Subsidiary Guarantors")
pursuant to the Composite Guarantee or the Composite Guarantee and Debenture,
each dated the Effective Date (collectively, the "New Subsidiary Guarantees").
The Existing Subsidiary Guarantors, the New Subsidiary Guarantors and any other
Person that becomes an additional Subsidiary Guarantor in accordance with
Section 9.1.11 and Section 9.3.5 are hereinafter referred to, collectively, as
the "Subsidiary Guarantors" and, together with the Parent Guarantor, the
"Guarantors". The Existing Subsidiary Guarantees, the New Subsidiary Guarantees
and any additional Subsidiary Guarantees entered into pursuant to Section 9.1.11
and Section 9.3.5 are hereinafter referred to, collectively, as the "Subsidiary
Guarantees" and, together with the Parent Guarantee, the "Guarantees". The
Existing Subsidiary Guarantees will be held by the Noteholders while the New
Subsidiary Guarantees will be held by the Common Security Trustee pursuant to
the Intercreditor Agreement.
2.4. Security for the Notes; Common Security Trust Deed.
(a) Security for the Notes. In connection with the amendment and
restatement of the Existing Note Purchase Agreements and the Existing
Notes, the Issuer, the Company and certain of its Subsidiaries
(collectively, the "Security Providers") shall grant security over all or
part of their respective assets to secure their respective obligations
under this Agreement, the Notes and the Guarantees pursuant to the terms of
the Security Documents, as more particularly described in Section 9.1.11.
(b) Common Security Trust Deed. As a condition precedent to the
amendment and restatement of the Existing Note Purchase Agreements and the
Existing Notes pursuant to the terms of this Agreement, on or before the
Effective Date the Noteholders will enter into the common security trust
deed (the "Common Security Trust Deed") with the Banks, the Bank Agent, the
Arrangers, the Common Security Trustee and the Obligors, which will provide
for (i) the appointment of the Common Security Trustee and (ii)
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certain arrangements (in addition to those arrangements set forth in the
Intercreditor Agreement) with respect to the priorities of the obligations
owing to the Noteholders, the Banks and the Common Security Trustee under
the Finance Documents and the Bank Documents.
2.5. Waiver of Defaults and Events of Default.
With effect from the Effective Date (but not before), each Noteholder
hereby waives each "Default" (as defined in the Existing Note Purchase
Agreements) and each "Event of Default" (as defined in Existing Note Purchase
Agreements) under the Existing Note Purchase Agreements constituted by the
failure of the Parent to comply with paragraphs (a) and (b) of Section 10.3 of
the Existing Note Purchase Agreements in respect of the period of two Fiscal
Half-Years ended 31 December 2001 and for any periods after 31 December 2001 and
until the Effective Date; provided, however, that nothing in this Section 2.5
shall constitute a waiver of, or affect the rights of the Noteholders in respect
of the occurrence of, any Default or Event of Default which arises after the
Effective Date.
3. EFFECTIVENESS OF RESTRUCTURING TRANSACTION.
The Restructuring Transaction and this Agreement shall take effect (if at
all) from the date on which all of the conditions precedent set forth in Section
4 are satisfied or otherwise waived in writing (the "Effective Date"). The
failure of the Issuer and the Company to satisfy any of the conditions precedent
set forth in Section 4 shall not operate to waive any of the Noteholders' rights
against the Issuer, the Company and the Subsidiary Guarantors under the Existing
Note Purchase Agreements, the Existing Notes, the Existing Parent Guarantee or
any Existing Subsidiary Guarantee. On the Effective Date, the Issuer agrees to
execute and deliver to each Noteholder pursuant to Section 15.2 of this
Agreement, at such Noteholder's request in accordance with Section 15.2 of this
Agreement, the aggregate principal amount of Notes specified below such
Noteholder's name in Schedule A, in the denominations specified in Schedule A,
against such Noteholder's delivery to the Issuer of the Existing Notes held by
such Noteholder (subject to Section 15.3 of this Agreement) in an equal
aggregate principal amount for cancellation by the Issuer. Without prejudice to
Section 2.1(b), all amounts due and owing under, and evidenced by, the Existing
Notes as of the Effective Date shall continue to be outstanding under, and after
the Effective Date shall be evidenced by, the Notes, and shall be governed by
the terms hereof.
4. CONDITIONS TO THE EFFECTIVE DATE.
The Effective Date shall occur when each of the following conditions
precedent set forth in this Section 4 shall have been satisfied in full or
otherwise waived in writing.
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4.1. Representations and Warranties.
The representations and warranties of the Issuer and the Company in this
Agreement, and of each Subsidiary Guarantor in Section 5 of the Subsidiary
Guarantee to which it is a party, shall be true and correct when made and on the
Effective Date.
4.2. Performance; No Default.
Except to the extent of any default or event of default specifically waived
pursuant to Section 2.5, the Issuer and the Company shall have performed and
complied with all agreements and conditions contained in the Existing Note
Purchase Agreements required to be performed or complied with by them prior to
or at the Effective Date. Immediately after giving effect to the Restructuring
Transaction, no Default or Event of Default shall exist.
4.3. Certificates of Compliance.
(a) Officer's Certificates. Each of the Issuer and the Company shall
have delivered to each Noteholder an Officer's Certificate, dated the
Effective Date, certifying that the conditions specified in Sections 4.1
and 4.2 have been fulfilled.
(b) Secretary's Certificates. Each of the Obligors shall have
delivered to each Noteholder copies, certified as at the Effective Date by
a Secretary or an Assistant Secretary of such Person as being true,
complete and up-to-date and in full force and effect on the date of this
Agreement and confirming the same have not been superseded, amended, or
revoked and remain in full force and effect on the Effective Date, (i) of
the constitutional documents of such Person; (ii) of the resolutions of the
board of directors, the shareholders and/or the supervisory board (as
applicable) of such Person in each case authorizing the execution, delivery
and performance of the Finance Documents and the terms and conditions
thereof and authorizing a person or persons to sign each Finance Document
and any documents to be delivered by such Person pursuant thereto; and
(iii) of a certificate setting out the names and signatures of the persons
authorized to sign, on behalf of such Person, each Finance Document to
which such Person is or is to be a party.
4.4. Opinions of Counsel.
Each Noteholder shall have received opinions, each in form, scope and
substance satisfactory to it, dated the Effective Date:
(a) from Macfarlanes, special English counsel for the Company and its
Subsidiaries;
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(b) from White & Case LLP, special U.S. counsel for the Company and
its Subsidiaries;
(c) from Michael J. Kopcsak, Executive Vice President and General
Counsel of Cordiant Communications Group Worldwide, Inc.;
(d) from Covington and Burling, special U.S. security counsel for the
Banks, the Noteholders and the Common Security Trustee;
(e) from Norton Rose Vieregge, special German security counsel for the
Banks, the Noteholders and the Common Security Trustee;
(f) from Trenite Van Doorne, special Dutch security counsel for the
Banks, the Noteholders and the Common Security Trustee; and
(g) from Blake Dawson Waldron, special Australian security counsel for
the Banks, the Noteholders and the Common Security Trustee,
in each case, covering such matters incident to the Restructuring Transaction as
such Noteholder may reasonably request. Each of the Company and its Subsidiaries
hereby instructs each of the counsel named in clauses (a) and (b) above to
deliver an opinion in form, scope and substance satisfactory to each Noteholder
on the Effective Date.
4.5. Subsidiary Guarantees; Security Documents.
Each Existing Subsidiary Guarantor shall have indicated its acknowledgement
and consent in respect of this Agreement and the Restructuring Transaction, and
shall have reaffirmed that its obligations under the Subsidiary Guarantee to
which it is a party are continuing obligations and extend to the obligations of
the Issuer and the Company under this Agreement and the Notes, by executing and
delivering an Acknowledgement and Consent in form and substance satisfactory to
the Majority Holders (each such Acknowledgement and Consent, a "Subsidiary
Guarantor Consent"); and each New Subsidiary Guarantor shall have executed and
delivered a Subsidiary Guarantee substantially in the form, scope and substance
of the Existing Subsidiary Guarantees with such modifications as may be
necessary to reflect the Restructuring Transaction and the legal requirements of
the jurisdiction of incorporation of such New Subsidiary Guarantor. Each
Security Provider shall have executed and delivered the respective Security
Documents to which it is a party and which shall be in full force and effect.
4.6. Purchase Permitted by Applicable Law, etc.
On the Effective Date, the Restructuring Transaction, on the terms and
conditions hereby provided, shall (a) be permitted by the laws and regulations
of each jurisdiction to which each Noteholder is subject, without recourse to
provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including without limitation Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Noteholder to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by such Noteholder, it shall have received an Officer's Certificate of
the Company or any Subsidiary certifying as to such matters of fact as any
Noteholder may reasonably specify to enable it to establish compliance with this
condition.
4.7. Payment of Fees and Expenses.
Without limiting the provisions of Section 16.1, on or before the Effective
Date the Issuer and the Company shall have:
(a) paid in full a participation fee in cash by wire transfer of
immediately available funds in Dollars to each Noteholder of 0.50% on the
outstanding aggregate principal amount of the Existing Notes held by such
Noteholder;
(b) paid in full a management fee in cash by wire transfer of
immediately available funds in Dollars to each Noteholder of 0.50% on the
outstanding aggregate principal amount of the Existing Notes held by such
Noteholder;
(c) paid all invoiced fees, charges and disbursements of Wilkie Farr &
Gallagher and Bingham Dana LLP, the Noteholders' special counsel;
(d) paid all invoiced fees, charges and disbursements of
PricewaterhouseCoopers, the Noteholders' and the Banks' reporting
accountants; and
(e) reimbursed each of the Noteholders for the out-of-pocket expenses
of their respective employees incurred in connection with the negotiation
of the Restructuring Transaction as specified in receipts and other
documentation delivered to the Company prior to the Effective Date.
4.8. Capital Structure.
The Company shall have delivered to each Noteholder copies, certified as at
the Effective Date by a Responsible Officer of the Company as being true,
complete and up-to-date, (i) of a list of material intercompany loans as at
September 30, 2001 and (ii) of the Group Structure Charts and a list of the
Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, the percentage of shares of each
class of its capital stock or similar
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equity interests outstanding owned by the Company and each other Subsidiary and
whether such Subsidiary is a Material Subsidiary on and as of the Effective
Date.
4.9. Syndicated Loan Agreement; Bridge Loan Agreement.
(a) The Syndicated Loan Agreement shall have been executed and
delivered by all parties thereto, all the conditions precedent to the
effectiveness of which shall have been either satisfied or permanently
waived by the parties thereto (except for the condition precedent
thereunder requiring the execution and delivery of this Agreement) and such
agreement shall become in full force and effect simultaneously with the
Effective Date. The Syndicated Loan Agreement and all documents and
instruments executed and delivered in connection therewith shall be in
accordance with the terms set out in the Agreement in Principle (including,
without limitation, the Banks' term sheet attached as Exhibit A thereto)
and otherwise in form and substance satisfactory to the Majority Holders.
Each Noteholder shall have received a conformed copy of a fully executed
counterpart of the Syndicated Loan Agreement and each other agreement and
instrument delivered in connection therewith (including, without
limitation, all fee letters), certified as true and correct by a
Responsible Officer of the Company.
(b) All obligations under the Bridge Loan Agreement shall have been
repaid in full, the facilities thereunder shall have been fully cancelled,
and the Group shall have been fully released from their obligations
thereunder.
(c) The Bridge Debenture shall have been terminated, the Group shall
have been fully released from their obligations thereunder, and the
Encumbrances constituted by the Debenture shall have been fully released.
4.10. Intercreditor Agreement and Common Security Trust Deed.
Each of the Intercreditor Agreement and the Common Security Trust Deed
shall have been executed and delivered by each of the parties thereto. Each of
the Intercreditor Agreement and the Common Security Trust Deed shall in all
respects be in form, scope and substance satisfactory to the Majority Holders.
4.11. Hedging Strategy Letter.
The Company shall have delivered to each Noteholder a revised hedging
strategy letter dated on or about the Effective Date (the "Hedging Strategy
Letter") in form and substance satisfactory to the Majority Holders.
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4.12. Security Memorandum.
The Company shall have delivered to each Noteholder a security memorandum
dated on or about the Effective Date (the "Security Memorandum") in the form of
Exhibit 4.12.
4.13. Accountants Reports.
Each Noteholder shall have received a report:
(a) from PricewaterhouseCoopers addressed (among others) to the
Noteholders and the Company in form and substance satisfactory to the
Majority Holders including confirmation that the Noteholders may rely
thereon; and
(b) from KPMG, together with a letter from KPMG, addressed to, and
capable of being relied upon by, the Noteholders in respect of such report.
4.14. Financial Model; Consents; Group Structure Charts.
The Company shall have delivered to each Noteholder a copy, certified as
being true, complete and up-to-date by a Senior Financial Officer of the
Company, of a financial model (the "Financial Model") and annual operating
budget for the 2002 Fiscal Year in form and substance satisfactory to the
Majority Holders.
4.15. Consolidated Financial Statements of the Group.
The Company shall have delivered to each Noteholder a copy, certified as
being true, complete and up-to-date by a Senior Financial Officer of the
Company, of the quarterly management accounts of the Group for the Fiscal
Quarter ended December 31, 2001, and the monthly management accounts for the
month ended February 28, 2002 (and which shall be deemed to have been delivered
pursuant to Section 7.1).
4.16. Consents, Authorizations, Licenses and Approval.
The Company shall have delivered to each Noteholder either:
(a) a copy, certified as a true copy by a Senior Financial Officer of
the Company of all consents, authorisations, licences and approvals
required by each Obligor to authorise, or required by each Obligor in
connection with, the execution, delivery, validity, enforceability and
admissibility in evidence of the Finance Documents and the performance by
each Obligor of its respective obligations under the Finance Documents, or
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(b) a certificate signed by a Senior Financial Officer of the Company
that no such consent, authorisation, licence or approval referred to in
clause (a) above is required by any Obligor.
4.17. Utilization of Facilities under Syndicated Loan Agreement.
The Company shall have delivered to each Noteholder a certificate from a
Senior Financial Officer of the Company confirming that utilization in full of
the facilities under the Syndicated Loan Agreement would not render the Group in
breach of any restriction on borrowings applicable to the Group in its
respective constitutional documents or elsewhere.
4.18. Permitted Encumbrances.
The Company shall have delivered to each Noteholder a certificate from a
Senior Financial Officer of the Company confirming that, immediately following
the Effective Date, the Group will have no Encumbrances other than Permitted
Encumbrances (including, without limitation, duly certified copies of any
release documentation in respect of any such Encumbrances that are not Permitted
Encumbrances).
4.19. Permitted Borrowed Money.
The Company shall have delivered to each Noteholder a certificate from
a Senior Financial Officer of the Company confirming that, immediately following
the Effective Date, the Group will have no Borrowed Money other than as
permitted under this Agreement.
4.20. Letter from the Company's Auditors.
The Company shall have delivered to each Noteholder a letter from the
Company's auditors confirming that they continue to be appointed as the auditors
of the Company, and confirming that, to the extent they remain the Company's
auditors in the future they will provide to the Noteholders (in the event that
the Noteholders enter into an engagement letter with such auditors on terms
reasonably satisfactory to such auditors and the Noteholders) the auditors
report referred to in Section 7.1(d)(v) and Section 7.2(c)(B).
4.21. Zenith Optimedia Group Limited.
The Company shall have delivered to each Noteholder:
(a) evidence that Sonic Sun Limited, an English company with
registered number 4350720 (the "Zenith SPV"), has acceded to the Joint
Venture Agreement dated 27 September 2001 with Publicis Group S.A. (the
"Zenith Joint Venture Agreement") and that all of the Group's right,
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interest and title to shares in Zenith have been transferred to the Zenith
SPV and copies of the documents evidencing such accession and transfer
certified by a Senior Financial Officer of the Company as true, complete
and up-to-date; and
(b) information in respect of Zenith, including the put option, and
copies of the relevant documentation, all in scope, form and substance
satisfactory to the Majority Holders.
4.22. Repayment of the Korean Debenture Stock.
The Company shall have delivered to each Noteholder evidence of the
repayment of the Korean debenture stock in form and substance satisfactory to
the Majority Holders.
4.23. Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to the Noteholders and their special
counsel, and the Noteholders and their special counsel shall have received all
such counterpart originals or certified or other copies of such documents as the
Noteholders or their special counsel may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE COMPANY.
The Issuer and the Company jointly and severally represent and warrant to
the each of the Noteholders that:
5.1. Organization; Power and Authority.
(a) The Issuer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and is duly
qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company is a public limited
liability company duly organized and validly existing under the laws of
England and Wales. Each of the other Obligors 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 companies with limited liability.
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(b) Each of the Obligors has the corporate power and authority to own
or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute
and deliver the Finance Documents to which it is a party, and to perform
the provisions hereof and thereof.
5.2. Authorization, etc.
Each Finance Document has been duly authorized by all necessary corporate
action on the part of the Obligors, and each such Finance Document constitutes a
legal, valid and binding obligation of the Obligors enforceable against the
Obligors in accordance with its terms, except as such enforceability may be
limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5.3. Disclosure.
All factual statements contained in the Information Package (excluding any
financial projections contained therein) were, as at their respective dates,
true and accurate in all material respects and did not contain any untrue
statement of a material fact or (to the best of the knowledge of the directors
of the Company) omit to state a fact necessary in order to make not misleading
in any material respect the statements contained therein. The Company has
provided each Noteholder with true and accurate copies of all items constituting
the Information Package. All financial projections which have been prepared by
the Company (or on its behalf) and contained in the Information Package have
been prepared in good faith and based upon assumptions which were reasonable at
the time prepared and at the time made available to any Noteholder.
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of the Company's (i) Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other
Subsidiary, (ii) Affiliates (other than Subsidiaries) which are Material to
the Group and (iii) directors and senior officers. Schedule 5.4 also
identifies each Material Subsidiary, each Subsidiary that is a borrower or
a guarantor under the Syndicated Loan Agreement and each such borrower or
guarantor Subsidiary that is a direct or indirect non-U.S. Subsidiary of
the Issuer or any of its U.S. Affiliates (each a "Designated non-U.S.
Subsidiary").
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(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
(except for possible assessments in respect of non-Material Subsidiaries
that in the aggregate could not exceed (pound)500,000) nonassessable and
are owned by the Company or another Subsidiary free and clear of any
Encumbrance (except as otherwise disclosed in Schedule 5.4 and other
immaterial Permitted Encumbrances).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and, where applicable,
in good standing under the laws of its jurisdiction of organization, is
duly qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is required
by law and has the corporate or other power and authority to own or hold
under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact, other than
failures to be so qualified or in good standing or limitations on power and
authority that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Subsidiary Guarantor has
the corporate and other power and authority, to execute and deliver and
perform its obligations under its respective Subsidiary Guarantee.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements
listed or described in Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits
to the Company or any of its Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Subsidiary. The
agreements listed or described in Schedule 5.4 do not in the aggregate
materially restrict the ability of the Company and the Subsidiary
Guarantors to receive dividends or other similar distributions of profits
from other Subsidiaries of the Company.
5.5. Financial Statements.
The Company has delivered to each Noteholder copies of the consolidated
financial statements of the Company and its Subsidiaries listed in Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto
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(subject, in the case of any interim financial statements, to normal year-end
adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by each Obligor of the Finance
Documents to which it is a party will not (a) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Encumbrance
in respect of any property of the Issuer, the Company or any other Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter, memorandum and articles of association,
regulations or by-laws, or any other agreement or instrument to which the
Issuer, the Company or any other Subsidiary is bound or by which the Issuer, the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Issuer, the Company or
any other Subsidiary or (c) violate any provision of any statute or other rule
or regulation of any Governmental Authority applicable to the Issuer, the
Company or any other Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by any Obligor of any Finance Document to
which it is a party.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Issuer or the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any Subsidiary
in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, including
without limitation if adversely determined, could reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it
is bound or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental
Laws) of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
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5.9. Taxes.
The Issuer, the Company and the Company's other Subsidiaries have filed all
material tax returns that are required to have been filed by them in any
jurisdiction, and have paid all taxes and assessments shown to be due and
payable on such returns and all other material taxes levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes (a) currently payable without penalty or interest or (b)
the amount, applicability or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of U.S. or United Kingdom federal, state or other taxes for all
financial periods are adequate in accordance with GAAP.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to their
respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
listed in Schedule 5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Encumbrances
prohibited by this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all
material respects.
5.11. Licenses, Permits, etc.
(a) The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, proprietary
software, service marks, trademarks and trade names, or rights thereto,
that individually or in the aggregate are Material, without known conflict
with the rights of others.
(b) To the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person.
(c) To the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, proprietary software,
service mark,
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trademark, trade name or other right owned or used by the Company or any of its
Subsidiaries.
5.12. ERISA; Foreign Plans.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3(3) of ERISA),
and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by
the Company or any ERISA Affiliate, or in the imposition of any Encumbrance
on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such
penalty or excise tax provisions or to section 401(a)(29) or 412 of the
Code, other than such liabilities or Encumbrances as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate current value of
the assets of such Plan allocable to such benefit liabilities by an amount
that in the aggregate for all Plans is Material. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and the
terms "current value" and "present value" have the meaning specified in
section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities)
under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The execution and delivery of this Agreement and the issuance and
sale of the Notes on April 5, 2001 did not involve any prohibited
transaction (as such term is defined in section 406(a) of ERISA and section
4975(c)(1)(A)-(D) of the Code) that would subject the Company or any holder
of a Note to any tax or penalty on prohibited transactions imposed under
said section 4975 of the Code or by section 502(i) of ERISA. The
representation by the Company in the preceding sentence of this Section
5.12(d) is made in reliance upon and subject to the accuracy of each
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Noteholder's representation in Section 6.2 as to the source of the funds
used to pay the purchase price of the Notes to be purchased by such
Noteholder.
(e) All Foreign Plans have been established, operated, administered
and maintained in compliance with all laws, regulations and orders
applicable thereto except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material
Adverse Effect. All premiums, contributions and any other amounts required
by applicable Foreign Plan documents or applicable laws to be paid or
accrued by the Company and its Subsidiaries, to the extent Material, have
been paid or accrued as required.
5.13. Private Offering.
Neither the Issuer nor the Company nor anyone acting on their behalf has
offered the Notes, the Parent Guarantee, the Subsidiary Guarantees or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any Person
other than the Noteholders and not more than 53 other Institutional Investors,
each of which has been offered the Notes at a private sale for investment.
Neither the Issuer nor the Company nor anyone acting on their behalf has taken,
or will take, any action that would subject the issuance or sale of the Notes or
the issuance of the Parent Guarantee or the Subsidiary Guarantees to the
registration requirements of section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Issuer applied the net proceeds of the sale of the Notes to repay
existing Borrowed Money of the Company and its other Subsidiaries. No part of
the proceeds from the sale of the Notes hereunder was used, and no part of the
proceeds of any such Borrowed Money being repaid was used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Issuer or the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock
does not constitute more than 10% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 25% of the value of such assets. As
used in this Section, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said Regulation U.
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5.15. Existing Borrowed Money; Future Encumbrances.
(a) Schedule 5.15 sets forth a complete and correct list of all
outstanding Borrowed Money of the Company and its Subsidiaries as of March
31, 2002, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities
of such Borrowed Money. Schedule 5.15 also identifies each Bank Credit
Facility as of the date of this Agreement and each item of Borrowed Money
to be repaid with the proceeds from the sale of the Notes. Except as
disclosed in Schedule 5.15, neither the Company nor any Subsidiary is in
default, and no waiver of default is currently in effect, in the payment of
any principal or interest on any Borrowed Money of the Company or any
Subsidiary, and no event or condition exists with respect to any Borrowed
Money that would permit (or that with the giving of notice or the lapse of
time, or both, would permit) one or more Persons to cause such Borrowed
Money to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to any Encumbrance not
permitted by Section 10.1.
5.16. Foreign Assets Control Regulations, etc.
(a) Neither the sale of the Notes by the Issuer hereunder nor its use
of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
(b) Neither the Company nor any Subsidiary is a person or entity
described by Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism, Exec. Order No. 13,224 66 Fed.
Reg. 49,079 (2001), and neither the Company nor any Subsidiary is knowingly
engaged in any dealings or transactions, or be otherwise associated, with
any such persons or entities in violation of such Executive Order.
5.17. Status Under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility Holding Company
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Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.
5.18. Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Without limiting the foregoing,
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of, or
any liability under, Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real properties now
or formerly owned, leased or operated by any of them or to other assets or
their use or to their business operations, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials in
a manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
5.19. Solvency of Subsidiary Guarantors; Priority of Obligations.
Each Subsidiary Guarantor is, and after giving effect to the execution and
delivery of its respective Subsidiary Guarantee will be, solvent and, to the
knowledge of the Company, no such Subsidiary Guarantor is or will be unable to
pay its debts as and when they become payable after giving effect to the
execution and delivery of its respective Subsidiary Guarantee and the issuance
of the Notes under this Agreement.
Except as preferences and priorities are created in favor of, and allocated
among the Banks and the Noteholders pursuant to the Intercreditor Agreement, the
Common Security Trust Deed and the Security Documents, the Obligors' respective
obligations under the Notes, this Agreement and the Guarantees rank at least
pari passu with all of the Obligors' other outstanding unsecured and
unsubordinated
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Indebtedness (including, without limitation, borrowings under the Syndicated
Loan Agreement), except for those obligations that are mandatorily preferred by
law and not by contract. The Security has or will have at all times first
ranking priority, and will not be subject at any time to any prior ranking or
pari passu ranking Encumbrances other than Permitted Encumbrances (except as
specifically stated in the Security Memorandum).
5.20. No Defaults or Events of Default.
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 or Event of Default has
occurred and is continuing.
5.21. Group Structure Charts.
Set forth in the Group Structure Charts is a substantially complete and
accurate representation of the structure and members of the Group as at the date
of this Agreement and the Effective Date.
5.22. Investment Company.
The Issuer is neither an "investment company" as defined in the United
States Investment Company Act of 1940 nor is subject to any United States
federal or state statute or regulation limiting its ability to incur Borrowed
Money.
5.23. Choice of Law.
The choice by the relevant Obligors of New York law to govern the Finance
Documents to which they are a party (to the extent that the same are expressed
to be governed by New York law) and the submission by the relevant Obligors to
the non-exclusive jurisdiction of the federal and state courts of New York (to
the extent that the relevant Obligors so submit) are valid and binding.
5.24. Intellectual Property Rights.
(a) 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
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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.
(b) 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 Majority
Holders, acting reasonably) to have, a Material Adverse Effect.
(c) No Intellectual Property Rights owned by any member of the Group
which are material in the context of the Group as a whole 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
Majority Holders, acting reasonably) to have, a Material Adverse Effect.
(d) 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 Majority Holders, acting
reasonably) to have, a Material Adverse Effect.
5.25. Zenith Joint Venture Agreement; Other Agreements.
The copies of the Zenith Joint Venture Agreement and the other relevant
incorporation and constitutional documents or by-laws of the Obligors delivered
to the Noteholders and/or their counsel in connection with this Agreement are
true, complete and accurate in all material respects and, save as otherwise
referred to therein and so far as it is aware, no other agreements, arrangements
or understandings exist between all or any of the parties to those agreements
and instruments which would materially affect the transactions or arrangements
contemplated by the Finance Documents.
5.26. Clean Company.
Other than as may result from the transfer to it of the Zenith Joint
Venture Agreement and the entry into of the Security Documents to which it is a
party and the documents ancillary thereto and the transactions and matters
contemplated thereby, prior to the Effective Date the Zenith SPV has not
undertaken any trading
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or incurred any material liabilities of any nature whatsoever whether actual or
contingent.
5.27. Charged Assets.
The assets listed in relevant schedules to the Security Documents are
beneficially owned by the relevant Guarantors as indicated in the relevant
schedule, are not subject to any Encumbrance (other than a Permitted
Encumbrance) and such lists are true and accurate in all material respects and
will represent a complete list in all material respects of such categories of
assets owned by the Obligors as at the date of the relevant Security Document
(except as agreed with the Common Security Trustee prior to the Effective Date).
5.28. No Borrowed Money or Encumbrances.
On the Effective Date, (a) no member of the Group has any liabilities in
respect of Borrowed Money other than as permitted under Section 10.1.2 and (b)
no Encumbrances (other than Permitted Encumbrances) exist over the assets and
undertaking of any member of the Group.
6. REPRESENTATIONS OF THE NOTEHOLDERS.
6.1. Purchase of Existing Notes.
Each Noteholder represents that it acquired the Existing Notes for its own
account or for one or more separate accounts maintained by it or for the account
of one or more pension or trust funds and not with a view to the distribution
thereof, provided that the disposition of its or their property shall at all
times be within its or their control. Each Noteholder understands that the Notes
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Issuer is
not required to register the Notes.
6.2. Source of Funds.
Each Noteholder represents that at least one of the following statements is
an accurate representation as to each source of funds (a "Source") used by it to
acquire the Existing Notes:
(a) the Source was an "insurance company general account", as such
term is defined in the Department of Labor Prohibited Transaction Class
Exemption ("PTE") 95-60 (issued July 12, 1995), and such purchase and
holding of Notes was exempt under PTE 95-60 as of April 5, 2001; or
-22-
(b) the Source was either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and such purchase and holding of Notes was exempt
under either PTE 90-1 or PTE 91-38 as of April 5, 2001, except with respect
to any employee benefit plan or group of plans maintained by the same
employer or employee organization that beneficially owned at such time more
than 10% of the assets allocated to such pooled separate account or
collective investment fund, each of which was identified by such Noteholder
to the Issuer in writing, and the Issuer has advised each Noteholder in
writing that it is not a party in interest with respect to such plan or
plans; or
(c) the Source constituted assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that were included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceeded 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption were satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in section V(e) of the QPAM
Exemption) owned a 5% or more interest in the Company and such purchase and
holding of Notes was exempt under PTE 84-14 as of April 5, 2001; or
(d) the Source was a governmental plan that is not covered by ERISA or
Section 4975 of the Code, and neither the purchase nor holding of Notes
resulted in, arose from, constituted or involved a transaction that was
prohibited under applicable state or local law; or
(e) the Source did not include assets of any employee benefit plan
subject to Title I of ERISA or any plan subject to Section 4975 of the
Code.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan" and "party in interest" shall have the respective meanings
assigned to such terms in section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Prior to the Put Elimination Date.
Prior to the Put Elimination Date, the Company shall:
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(a) Audited Financial Statements - prepare consolidated financial
statements in respect of the Group in accordance with GAAP consistently
applied in respect of each Fiscal Year and cause each of the same to be
reported on by the Auditors;
(b) Quarterly Management Accounts - prepare consolidated quarterly
management accounts for the Group in accordance with GAAP (consistently
applied) in respect of each Fiscal Quarter in form and substance
satisfactory to the Noteholders and including:
(i) a cashflow statement and a consolidated profit and loss
account in respect of the relevant Fiscal Quarter, the Fiscal Year to
that date, and whatever periods or rolling 12 month periods are
relevant to the calculations of the financial covenants set forth in
Section 10.3.1;
(ii) a comparison of all relevant results with the relevant
Annual Budget;
(iii) a comparison of actual performance for that Fiscal Quarter
with the performance during the equivalent Fiscal Quarter during the
immediately preceding Fiscal Year;
(iv) a consolidated balance sheet as at the end of that Fiscal
Quarter;
(v) a management discussion and analysis in a form satisfactory
to the Majority Holders;
(vi) (for the purposes relevant for Section 8.5) a statement of
the aggregate Net Proceeds of relevant disposals made during such
period other than disposals to which Section 8.5(a) does not apply;
(vii) (for the purposes relevant for Section 10.3.1(e) a
statement of the Capital Expenditure during such period;
(viii) an analysis of the profit and loss account by profit
centres; and
(ix) a statement of the consideration paid by the Group (and
broken down by Group members) in respect of Permitted Acquisitions
during such period;
(c) Monthly Management Accounts - prepare consolidated monthly
management accounts in respect of the Group in accordance with GAAP
-24
(consistently applied) in respect of each month in the agreed form and
including:
(i) a consolidated cashflow statement (including a 4 week rolling
forecast of central liquidity in the form agreed with the
Noteholders);
(ii) a consolidated profit and loss account for the relevant
month and the Fiscal Year to that date;
(iii) a comparison of all relevant results with the relevant
Annual Budget;
(iv) a comparison of actual performance for that month with the
performance during the equivalent month during the immediately
preceding Fiscal Year;
(v) a management discussion and analysis in a form satisfactory
to the Majority Holders;
(vi) (for the purposes relevant for Section 8.5) a statement of
the aggregate Net Proceeds of relevant disposals made during such
period other than disposals to which Section 8.5(a) does not apply;
(vii) (for the purposes relevant for Section 10.3.1(e) a
statement of the Capital Expenditure during such period; and
(viii) a statement of the investments and other transactions
entered into constituting Permitted Investments; and
(d) Delivery of financial statements - deliver to each Noteholder each
of the following documents:
(i) Audited Financial Statements - at the time of issue of the
audited financial statements (whether preliminary or otherwise) to the
shareholders of the Parent but in any event not later than 90 days
after the end of the Fiscal Year to which they relate, the audited
financial statements referred to in Section 7.1(a) for each Fiscal
Year together, in each case, with the report of the Auditors thereon,
the notes thereto, the directors' report thereon, the preliminary
audited financial statements, and the report referred to in Section
7.1(d)(v), provided that (A) such audited financial statements should
be set forth in comparative form the figures for the previous Fiscal
Year, all in reasonable detail, prepared in accordance with GAAP, and
such Auditor's report should include of an audit opinion on such
financial statements of independent chartered accountants of
recognized
-25-
national standing in the United Kingdom, which opinion may be
contained in the annual statement so provided and shall state that
such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their
results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance
with generally accepted auditing standards in the United Kingdom, and
that such audit provides a reasonable basis for such opinion in the
circumstances;
(ii) Interim Statements -- within 90 days after the end of the
first Fiscal Half-Year of the Company, duplicate copies of
(A) an unaudited consolidated balance sheet of the Company
and its Subsidiaries as at the end of such period, and
(B) an unaudited profit and loss account for such period,
setting forth in each case in comparative form the figures for the
corresponding period in the previous Fiscal Year, all in reasonable
detail, prepared in accordance with GAAP applicable to interim
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of the financial information that the Company is required to
furnish to London Stock Exchange plc for each such interim period
shall be deemed to satisfy the requirements of this Section
7.1(d)(ii), provided further that if the financial reporting
requirements for companies listed on the Official List of the UK
Listing Authority are altered, the Company shall deliver such
alternative financial information as the Company shall be required to
disclose to its shareholders pursuant to the requirements of the UK
Listing Authority in force at such time, as well as such supplemental
information as is reasonably necessary to provide such holder with the
same substantive consolidated financial information as such holder
would have received had the form and detail of the accounts not been
changed from the form and detail of the most recent interim accounts
listed in Schedule 5.5;
(iii) Management Accounts - within:
-26-
(A) 45 days after the end of the Fiscal Quarter to which
they relate, the quarterly management accounts prepared in
accordance with the requirements of Section 7.1(b), together with
the certificate referred to in Section 7.1(d)(iv), provided that
such management accounts should be set forth in each case in
comparative form the figures for the corresponding period in the
previous Fiscal Year, all in reasonable detail, prepared in
accordance with GAAP applicable to interim financial statements
generally, and certified by a Senior Financial Officer as having
been prepared with due care and attention and in accordance with
the normal routines for the preparation of quarterly reporting
with the Group, subject to changes resulting from year-end
adjustments; and
(B) 30 days after the end of each month to which they
relate, the monthly management accounts prepared in accordance
with the requirements of Section 7.1.(c);
(iv) Directors' Compliance Certificates -- at the time of the
delivery of the quarterly management accounts referred to in Section
7.1(d)(ii), for each Fiscal Quarter and in each case speaking as at
the end of such Fiscal Quarter a compliance certificate of the Parent
signed by its finance director, or if the finance director is
unavailable for any reason, any other director of the Parent verifying
compliance or otherwise with all financial covenants set forth in
Section 10.3.1, confirming that no Default or Event of Default has
occurred which is continuing unremedied and unwaived, and attaching a
list of Material Subsidiaries (determined on the basis of the relevant
financial statements) and have it signed by its finance director, or
if the finance director is unavailable for any reason, any other
director of the Company, and provide such certificate to the holders
of the Notes at the time of the delivery of the quarterly management
accounts for each Fiscal Quarter;
(v) Annual Auditors' report -- at the time of delivery of the
audited financial statements referred to Section 7.1(d)(i) a report
from the Auditors (such report to be delivered to the Noteholders only
in the event that the Noteholders enter in into an engagement letter
with the Auditors on terms reasonably satisfactory to the Auditors and
the Noteholders) (in a format acceptable to the Agreed Noteholders and
which can be relied upon by the Agreed Noteholders) stating:
(A) the amounts of the respective financial definitions in
respect of or, as the case may be, as at the end of the relevant
period specified in the financial covenants as extracted from
-27-
such audited financial statements and indicating the manner in
which such amounts have been calculated;
(B) the application of the respective amounts of such
financial definitions to the financial covenants; and
(C) a list of the Group companies that are Material
Subsidiaries as at the end of the relevant Fiscal Year to which
the report relates,
and each such report shall (in the absence of manifest error) be
conclusive as to matters contained in it;
(vi) Annual Budget -- (A) as soon as it becomes available, and in
any event not later than 45 days after the commencement of the Fiscal
Year the subject thereof the Annual Budget for each Fiscal Year, (B)
as soon as it becomes available, and in any event not later than 20
days after the commencement of each relevant quarter, the updated
version of the Annual Budget for the relevant Fiscal Year, and (C)
immediately upon being approved by the Parent's board of directors,
any amendments or revisions to an Annual Budget (other than the
quarterly updates provided for in clause (B));
(vii) Reports and notices to creditors and shareholders -- at the
time of issue thereof every report, circular, notice or like document
issued by any Obligor or Material Subsidiary to its creditors (or any
class of creditors) generally or to the Banks and every notice
convening a meeting of the shareholders or any class of the
shareholders of the Parent;
(viii) Information to Creditors -- promptly upon their becoming
available, one copy of all information (including, without limitation,
all financial information reports, projections, forecasts, budgets,
business information, financial statements, reports, circulars,
notices or similar documents (but excluding any routine administrative
notices and certificates)) that is sent by the Company or any
Subsidiary to any lending bank (or similar provider of credit or
finance) or its public securities holders;
(ix) Further information - with reasonable promptness, such
further financial and other information concerning the Group (or any
member of it) and its affairs as any Noteholder may from time to time
reasonably require;
(x) Independent accountant's report -- notify the Noteholders
immediately upon it becoming aware that a breach of Section 10.3.1 or
-28-
an Event of Default under Section 11(a), Section 11(b), Section 11(f),
Section 11(h), Section 11(i), Section 11(j) or Section 11(k) is
reasonably likely to occur either immediately or within the following
12 months. Upon receiving such notification from the Parent, the
Majority Holders shall have the right to require the preparation of an
independent accountants' report on the financial and business
condition and prospects of the Group and/or such other reports as the
Majority Holders shall require (the cost in each case to be borne by
the Parent) and the Parent will (and will procure that each other
member of the Group will) provide the persons preparing each such
report with all assistance and information requested by them;
(xi) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer of any
Obligor becomes aware of the existence of any Default or Event of
Default or of any occurrence which would or is reasonably likely in
the opinion of the Company to have a Material Adverse Effect, a
written notice specifying the nature and period of existence thereof
and what action the Group is taking or proposes to take with respect
thereto;
(xii) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Governmental Authority relating to
any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect; and
(xiii) Other Reports -- promptly upon their becoming available,
one copy of (i) each material document filed by the Company with the
UK Listing Authority or London Stock Exchange plc and thereafter
generally available to the public, (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission or any similar Governmental
Authority or stock exchange and (iii) each press release or other
statement made available generally by the Company or any Subsidiary to
the public concerning developments that are Material.
7.2. On the Put Elimination Date and Thereafter.
On the Put Elimination Date and thereafter:
7.2.1. Financial and Business Information.
The Company shall deliver to each Noteholder:
-29-
(a) Quarterly Statements -- within 45 days after the end of each
Fiscal Quarter of the Company, duplicate copies of
(i) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such period, and
(ii) an unaudited profit and loss account for such period,
setting forth in each case in comparative form the figures for the
corresponding period in the previous Fiscal Year, all in reasonable detail,
prepared in accordance with GAAP applicable to interim financial statements
generally, and certified by a Senior Financial Officer as having been
prepared with due care and attention and in accordance with the normal
routines for the preparation of quarterly reporting with the Group, subject
to changes resulting from year-end adjustments, provided that delivery
within the time period specified above of the financial information that
the Company is required to furnish to London Stock Exchange plc for each
such interim period shall be deemed to satisfy the requirements of this
Section 7.2.1(a), provided further that if the financial reporting
requirements for companies listed on the Official List of the UK Listing
Authority are altered, the Company shall deliver such alternative financial
information as the Company shall be required to disclose to its
shareholders pursuant to the requirements of the UK Listing Authority in
force at such time, as well as such supplemental information as is
reasonably necessary to provide such holder with the same substantive
consolidated financial information as such holder would have received had
the form and detail of the accounts not been changed from the form and
detail of the most recent interim accounts listed in Schedule 5.5;
(b) Interim Statements -- within 90 days after the end of the first
Fiscal Half-Year of the Company, duplicate copies of
(i) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such period, and
(ii) an unaudited profit and loss account for such period,
setting forth in each case in comparative form the figures for the
corresponding period in the previous Fiscal Year, all in reasonable detail,
prepared in accordance with GAAP applicable to interim financial statements
generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial
-30-
position of the companies being reported on and their results of operations
and cash flows, subject to changes resulting from year-end adjustments,
provided that delivery within the time period specified above of the
financial information that the Company is required to furnish to London
Stock Exchange plc for each such interim period shall be deemed to satisfy
the requirements of this Section 7.2.1(b), provided further that if the
financial reporting requirements for companies listed on the Official List
of the UK Listing Authority are altered, the Company shall deliver such
alternative financial information as the Company shall be required to
disclose to its shareholders pursuant to the requirements of the UK Listing
Authority in force at such time, as well as such supplemental information
as is reasonably necessary to provide such holder with the same substantive
consolidated financial information as such holder would have received had
the form and detail of the accounts not been changed from the form and
detail of the most recent interim accounts listed in Schedule 5.5;
(c) Annual Statements -- within 150 days after the end of each Fiscal
Year of the Company, duplicate copies of
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such Fiscal Year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its Subsidiaries for such
Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by
(A) an audit opinion thereon of independent chartered accountants
of recognized national standing in the United Kingdom, which opinion
may be contained in the annual statement so provided and shall state
that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards in the United
Kingdom, and that such audit provides a reasonable basis for such
opinion in the circumstances, and
-31-
(B) solely for the benefit of the Noteholders (to the extent that
the Noteholders have entered into any engagement letter with the
Auditors on terms reasonably satisfactory to the Auditors and the
Noteholders), a certificate of such accountants stating that they have
reviewed the certificate of a Senior Financial Officer of the Company
concurrently being provided to holders of Notes pursuant to Section
7.2.2 and that (1) the specific financial information contained in
such certificate has been accurately extracted from the sources
identified in such certificate and, where applicable, agrees with the
underlying accounting records of the Group, and (2) the calculations
shown in such certificate to have been made in accordance with this
Agreement are arithmetically accurate;
provided that delivery within the time period specified above of the
financial information that the Company is required to furnish to the UK
Listing Authority for such Fiscal Year, together with the accountants'
certificate described in clause (B) (to the extent that the Noteholders
have entered into any engagement letter with the Auditors on terms
reasonably satisfactory to the Auditors and the Noteholders), shall be
deemed to satisfy the requirements of this Section 7.2.1(c), provided
further however that if the financial reporting requirements for companies
listed on the Official List of the UK Listing Authority are altered, the
Company shall deliver such alternative financial information as the Company
shall be required to disclose to its shareholders pursuant to the
requirements of the UK Listing Authority in force at such time, as well as
such supplemental information as is reasonably necessary to provide such
holder with the same substantive consolidated financial information as such
holder would have received (including, without limitation, all such
information necessary to verify compliance with the covenants set forth in
Section 10.2 and Section 10.3) had the form and detail of the accounts not
been changed from the form and detail of the most recent audited accounts
listed in Schedule 5.5;
(d) Other Reports -- promptly upon their becoming available, one copy
of (i) all information (including, without limitation, all financial
information reports, projections, forecasts, budgets, business information,
financial statements, reports, circulars, notices or similar documents (but
excluding any routine administrative notices and certificates)) that is
sent by the Company or any Subsidiary to any lending bank (or similar
provider of credit or finance) or its public securities holders and each
material document filed by the Company with the UK Listing Authority or
London Stock Exchange plc and thereafter generally available to the public,
(ii) each regular or periodic
-32-
report, each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments thereto
filed by the Company or any Subsidiary with the Securities and Exchange
Commission or any similar Governmental Authority or stock exchange and
(iii) each press release or other statement made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(e) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Responsible Officer of the Issuer
or the Company becomes aware of the existence of any Default or Event of
Default or that any Person has given any notice or taken any action with
respect to a claimed default hereunder or that any Person has given any
notice or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Issuer and the Company are
taking or propose to take with respect thereto;
(f) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Governmental Authority relating to any order,
ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or the ability of the Issuer to perform its obligations
hereunder and under the Notes or the ability of the Company to perform its
obligations hereunder, in each case as from time to time may be reasonably
requested by any such holder of Notes.
7.2.2. Officer's Certificate.
Each set of financial statements delivered to a holder of Notes pursuant to
Section 7.2.1(a), Section 7.2.1(b) or Section 7.2.1(c) shall be accompanied by a
certificate of a Senior Financial Officer of the Company setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.2 and Section 10.3 during
the interim or annual period covered by the statements then being furnished
(including with respect to each such
-33-
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence);
(b) Default -- a statement that such Senior Financial Officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the interim or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including without limitation any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Issuer or the Company shall have taken or proposes to
take with respect thereto; and
(c) Material Subsidiaries - a list of Material Subsidiaries.
7.2.3. Inspection.
The Company shall permit the representatives of each holder of Notes that
is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive offices of the Issuer and the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with officers of the Issuer and the Company, and (with the
consent of the Company, which consent will not be unreasonably withheld)
its independent chartered accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company and each Subsidiary, all at
such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Issuer to visit and inspect any of the offices or properties
of the Company or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers and independent
-34-
chartered accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such times and as often as may be requested.
7.3 Limitation on Disclosure Obligation.
The Company shall not be required to disclose the following information
pursuant to Section 7:
(a) information that, notwithstanding Section 22, the Company would be
prohibited from disclosing by law or regulation, provided that a written
opinion of counsel, if reasonably requested by any holder of a Note, has
been furnished to each holder of Notes at the Company's expense, to the
effect that the disclosure of such information to such holders would give
rise to a breach of applicable law or regulations;
(b) information that the Company is prohibited from disclosing by the
terms of an obligation of confidentiality contained in any agreement
binding upon the Company and not entered into in contemplation of this
clause (b), provided that the Company shall make a good faith attempt to
obtain consent from the party in whose favor the obligation of
confidentiality was made to permit the disclosure of the relevant
information; or
(c) information that, notwithstanding Section 22, would require the
Company to make public disclosure of such information to comply with any of
its continuing obligations under the rules of London Stock Exchange plc or
any other securities exchange or the Listing Rules made by the UK Listing
Authority or the City Code on Takeovers and Mergers (each an "Authority"),
provided that the Company shall, if so requested by any holder of a Note,
promptly approach the relevant Authority (except that the Company shall not
be required to disclose the substance or nature of the relevant information
to such Authority, but rather shall only be required to inform such
Authority that the Company believes such information constitutes price
sensitive information) and request confirmation from a senior officer of
such Authority to the effect that the Company may disclose such information
to holders of the Notes without having to disclose such information
publicly or otherwise being in breach of the rules of such Authority and
the Company shall not have received confirmation to such effect in form and
substance reasonably satisfactory to the Company.
Any such inquiry by the Company to an Authority shall expressly indicate
the nature of this Agreement, the Notes and the obligations of the Company
with respect thereto, that a request for information was made pursuant to a
covenant in this Agreement requiring the Company to provide such
-35-
information and that the recipients of such information are bound by the
confidentiality provisions of Section 22.
Notwithstanding anything herein to the contrary, prior to the Put
Elimination Date the Company shall be required to disclose all information
(including, without limitation, the information described in the Section
7.3) to the Noteholders that has been disclosed or otherwise provided (in
any manner or form whatsoever) directly or indirectly to any Bank Finance
Party.
8. PAYMENTS.
8.1. Interest; PIK Management Fees.
(a) Interest. The Issuer shall pay interest on the Notes (computed on
the basis of a 360-day year of twelve 30-day months), and interest on the
Notes shall accrue:
(i) at all times prior to the Effective Date on the unpaid
principal balance of each of the Notes at the rate of 7.61% per annum,
payable semi-annually on April 5 and October 5 in each year, until the
principal hereof shall have become due and payable,
(ii) at all times on and after the Effective Date but prior to
the Put Elimination Date on the unpaid principal balance of each of
the Notes at the rate of 9.25% per annum, payable quarterly on January
5, April 5, July 5 and October 5 in each year, until the principal
hereof shall have become due and payable, and
(iii) at all times on and after the Put Elimination Date on the
unpaid principal balance of each of the Notes at the rate of 9.25% per
annum, payable semiannually on April 5 and October 5 in each year,
until the principal hereof shall have become due and payable.
(b) PIK Management Fees.
(i) The Company shall pay an additional management fee (the "PIK
Management Fee") to each holder of Notes to be calculated as a
percentage fee on the aggregate outstanding principal amount of the
Notes on each date of calculation set forth below and shall be
calculated quarterly in accordance with the following table showing
the ratio of Consolidated Gross Borrowings to Consolidated EBITDA:
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- ------------------------- ------------------------------------------------------------------------------
Fiscal Quarter Ending Consolidated Gross Borrowings : Consolidated EBITDA
- ------------------------- ------------------------------------------------------------------------------
March 2002 = 4.60 > 4.60 > 4.84 > 5.08 > 5.32
but = 4.84 but = 5.08 but = 5.32
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
June 2002 = 6.25 > 6.25 > 6.81 > 7.38 > 7.94
but = 6.81 but = 7.38 but = 7.94
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
September 2002 = 3.56 > 3.56 > 3.84 > 4.13 > 4.41
but = 3.84 but = 4.13 but = 4.41
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
December 2002 = 3.37 > 3.37 > 3.71 > 4.06 > 4.40
but = 3.71 but = 4.06 but = 4.40
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
March 2003 = 3.40 > 3.40 > 3.59 > 3.77 > 3.96
but = 3.59 but = 3.77 but = 3.96
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
June 2003 = 3.28 > 3.28 > 3.40 > 3.52 > 3.63
but = 3.40 but = 3.52 but = 3.63
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
September 2003 = 3.22 > 3.22 > 3.35 > 3.49 > 3.62
but = 3.35 but = 3.49 but = 3.62
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
December 2003 = 2.89 > 2.89 > 3.02 > 3.15 > 3.27
but = 3.02 but = 3.15 but = 3.27
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
March 2004 = 2.89 > 2.89 - - -
but = 3.00
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
June 2004 = 2.70 > 2.70 - - -
but = 3.00
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
September 2004 = 2.70 > 2.70 - - -
but = 3.00
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
Fee 0.00% 0.50% 1.00% 1.50% 2.00%
- ------------------------- ------------ ----------------- ---------------- ---------------- -------------
(ii) The PIK Management Fee shall be calculated using the
Company's quarterly Compliance Certificates but shall not be payable
by the Company until the earlier of (A) the prepayment in full of the
Notes, (B) the Bank Refinancing Date, (C) any enforcement of the
Security or any of the Subsidiary Guarantees, (D) any of the Events of
-37-
Default described in paragraph (h), (i), (j) or (k) of Section 11, (E)
any of the Notes becoming due and payable, whether automatically or by
declaration, or (F) the reduction to zero of the Total Commitments (as
defined in the Syndicated Loan Agreement) in accordance with the terms
of the Syndicated Loan Agreement.
(iii) Any PIK Management Fee that is payable in respect of any
quarter shall accrue interest (computed on the basis of a 360-day year
of twelve 30-day months) at 9.25% per annum, which interest shall
accrue but shall not be payable until the PIK Management Fee is
payable. The accrual of interest on the PIK Management Fee shall begin
as of the quarter-end date shown on the Compliance Certificate.
(iv) To the extent that the New Money is fully repaid and the New
Money Commitments are cancelled in full at any time or the Banks
otherwise agree to eliminate the "priority" treatment of all New Money
in the Intercreditor Agreement at any time, any future accretion of
the PIK Management Fee shall cease as at the later of any of those
times and January 1, 2003 (it being understood that any PIK Management
Fee that has been calculated for any quarter prior to such time shall
continue to be payable at the relevant time of payment as provided
above and will continue to accrue interest until such payment date).
(c) Default Interest. The Issuer shall pay interest (computed on the
basis of a 360-day year of twelve 30-day months) at all times (to the
extent permitted by applicable law):
(i) prior to the Effective Date, on any overdue payment of
principal, any overdue payment of interest and any overdue payment of
any Make-Whole Amount, payable semiannually on April 5 and October 5
in each year (or, at the option of any registered holder of Notes, on
demand), at a rate per annum from time to time equal to the greater of
(A) 9.61% and (B) 2% above the rate of interest publicly announced by
Citibank, N.A. from time to time at its principal office in New York
city as its base or prime rate;
(ii) on the Effective Date and thereafter but prior to the Put
Elimination Date, on any overdue payment of principal, any overdue
payment of interest, any overdue payment of PIK Management Fees, any
overdue payment of any Change of Control Fee and any overdue payment
of any Make-Whole Amount, payable quarterly on January 5, April 5,
July 5 and October 5 in each year (or, at the option of any registered
holder of Notes, on demand), at a rate per annum from time to time
equal to the greater of (A) 11.25% and (B) 2% above the rate of
-38-
interest publicly announced by Citibank, N.A. from time to time at its
principal office in New York city as its base or prime rate; and
(iii) on the Put Elimination Date and thereafter, on any overdue
payment of principal, any overdue payment of interest, any overdue
payment of PIK Management Fees, any overdue payment of any Change of
Control Fee and any overdue payment of any Make-Whole Amount, payable
semiannually on April 5 and October 5 in each year (or, at the option
of any registered holder of Notes, on demand), at a rate per annum
from time to time equal to the greater of (A) 11.25% and (B) 2% above
the rate of interest publicly announced by Citibank, N.A. from time to
time at its principal office in New York city as its base or prime
rate.
8.2. Required Prepayments.
(a) On April 5, 2007, and on each April 5 thereafter to and including
April 5, 2010 the Issuer will prepay $35,000,000 aggregate principal amount
(or such lesser principal amount as shall then be outstanding) of the
Notes, such prepayment to be made at the principal amount to be prepaid,
together with accrued interest thereon to the date of such prepayment,
without payment of any Make-Whole Amount or other premium, allocated as
provided in Section 8.10.
(b) No partial prepayment of the Notes pursuant to any other provision
in this Agreement shall relieve the Issuer of its obligation to make
prepayments of the Notes required by this Section 8.2 (with the effect that
such prepayments shall be applied to such required prepayments and to the
payment at the final maturity of the Notes in inverse order), provided that
upon purchase of Notes pursuant to Section 8.12 the principal amount of
each required prepayment of the Notes becoming due under this Section 8.2
on and after the date of such purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced
as a result of such purchase.
8.3. Optional Prepayments with Make-Whole Amount.
(a) The Issuer may, at its option, upon notice as provided in Section
8.3(b), prepay at any time all, or from time to time any part of, the Notes
(in a minimum principal amount of $10,000,000 and otherwise in multiples of
$500,000) at the principal amount so prepaid, plus accrued interest with
respect to such principal amount being prepaid to the date of such
prepayment, plus (subject to deferral pursuant to Section 8.14) the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount.
-39-
(b) The Issuer will give each holder of Notes written notice of each
optional prepayment under this Section 8.3 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such
notice shall specify the date fixed for such prepayment (which shall be a
Business Day), the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be
prepaid and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer of the Issuer as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if
the date of such notice were the date of the prepayment), setting forth the
details of such computation. Two Business Days prior to such prepayment,
the Issuer shall deliver to the holder of each Note a certificate of a
Senior Financial Officer of the Issuer specifying the calculation of the
Make-Whole Amount as of the specified prepayment date.
8.4. Prepayment Event.
Immediately upon the occurrence of a Prepayment Event, the Issuer shall be
required to prepay in full all of its Notes, at a price equal to 100% of the
outstanding principal amount of the Notes plus accrued interest thereon, the
accrued PIK Management Fee (if any) (together with accrued interest thereon) and
the Make-Whole Amount (if any) (including all deferred amounts in respect
thereof and accrued interest thereon) at the time of such prepayment.
8.5. Disposal Proceeds.
(a) Prior to the Put Elimination Date, if any member of the Group
disposes of any assets (including shares and fixed assets) to any person
which is not a member of the Group, and:
(i) the aggregate Net Proceeds are at least(pound)500,000 (or its
equivalent at the date of the disposal) (each a "Relevant Disposal");
and
(ii) the aggregate Net Proceeds of all Relevant Disposals in any
Fiscal Year are in excess of (pound)5,000,000 (or its equivalent at
the date of disposal),
the Issuer shall (or shall procure that the Company and its Subsidiaries
shall), apply an amount equal to the aggregate Net Proceeds of such
Relevant Disposals which are in excess of (pound)5,000,000 (or its
equivalent) in mandatory prepayment of the Notes (subject to the terms and
provisions of the Intercreditor Agreement). Any such prepayment shall be
made within twenty-five (25) Business Days of receipt by the Company or any
of its
-40-
Subsidiaries of such Net Proceeds and shall be at a price equal to 100% of
the outstanding principal amount of the Notes being so prepaid plus accrued
interest on the amount of such principal and the Make-Whole Amount (if any)
in respect of such principal amount being so prepaid (subject to deferral
pursuant to Section 8.14).
(b) The provisions of clause (a) above shall not apply in relation to
the following disposals:
(i) the disposal of stock-in-trade in the ordinary course of day
to day trading;
(ii) any disposal by:
(A) a member of the Group to a Subsidiary Guarantor; and
(B) a member of the Group which is not a Subsidiary
Guarantor to another member of the Group which is not a
Subsidiary Guarantor,
but so that in each case where any such asset is shares, other
ownership interests in any person or entity, real property or real
estate (or related insurance policies), receivables (including
intra-Group debts) or, in each case, rights or claims in respect of
any such asset and is subject or is expressed to be subject to an
Encumbrance pursuant to any Security Documents such disposal shall
only be permitted if either (x) the Majority Holders are satisfied
that the Subsidiary Guarantee given by the disposee of the obligations
of the Obligors under (inter alia) the Syndicated Loan Agreement, the
Notes and the Security Documents are not limited to a greater extent
than that given by the disposer and that either (1) such Encumbrance
is not prejudiced as a result of such disposal or (2) the asset
concerned becomes subject to a fully enforceable, legally binding
Encumbrance in favour of the Common Security Trustee, the Banks and
the holders of the Notes on terms substantially equivalent to or
better than the Encumbrances under the Security Documents prior to
such disposal or (y) the Majority Holders give their prior written
consent;
(iii) dealings with trade debtors with respect to book debts
in the ordinary course of trading;
(iv) disposals of cash on arm's length terms not otherwise
prohibited by this Agreement and the Security Documents;
-41-
(v) disposals which constitute Permitted Investments; and
(vi) disposals by the Zenith SPV with respect to any of the
shares it holds in Zenith permitted under Section 10.1.4 and
Section 10.2.3 provided that the proceeds of such disposals are
applied in accordance with the mandatory prepayment provisions
described in Section 8.7.
(c) Following the Put Elimination Date, to the extent the Issuer
elects to apply the proceeds of any Asset Disposition to the prepayment of
the Notes, such prepayment shall be made at a price equal to 100% of the
outstanding principal amount of the Notes being so prepaid plus accrued
interest on the amount of such principal and the Make-Whole Amount (if any)
in respect of such principal amount being so prepaid.
8.6. Rights Issues, Equity Raising, Etc..
(a) Prior to the Put Elimination Date, the proceeds (net of reasonable
related costs) of any rights issue or other equity raising (other than
those permitted under clause (a) of Section 10.1.10) shall be applied in
mandatory prepayment of the Notes (subject to the terms and provisions of
the Intercreditor Agreement). Any such prepayment shall be at a price equal
to 100% of the outstanding principal amount of the Notes being so prepaid
plus accrued interest on the amount of such principal, the accrued PIK
Management Fee (if any) (together with accrued interest thereon) and the
Make-Whole Amount (if any) in respect of such principal amount being so
prepaid (subject to deferral pursuant to Section 8.14).
(b) For the avoidance of doubt, a rights issue or other equity raising
occurring contemporaneously with a refinancing of the Syndicated Loan
Agreement shall be deemed to occur after the Put Elimination Date if the
conditions precedent set forth in Section 8.8(f) in connection with such
refinancing have been satisfied.
8.7. Zenith Proceeds.
Prior to the Put Elimination Date, if any member of the Group receives any
proceeds from:
(i) any exercise of the put or call options under the Zenith Joint
Venture Agreement or any other disposal of shares (or other interests) in
Zenith;
(ii) any claims for damages or other remedies in respect of any breach
of the put and call options in the Zenith Joint Venture Agreement;
-42-
(iii) any claim in respect of any warranties, indemnities and
representations contained in the Zenith Joint Venture Agreement to the
extent connected to the put and call options in the Zenith Joint Venture
Agreement; and
(iv) any flotation of, or sale or other disposal of all or
substantially all of its assets and undertakings by, Zenith or any of its
Subsidiaries,
the Issuer shall (and shall procure that the Company and its Subsidiaries
shall), apply an amount equal to the aggregate Net Proceeds thereof in mandatory
prepayment of the Notes (subject to the terms and provisions of the
Intercreditor Agreement). Any such prepayment shall be made within ten (10) days
of receipt by the Company or any of its Subsidiaries of such Net Proceeds and
shall be at a price equal to 100% of the outstanding principal amount of the
Notes being so prepaid plus accrued interest on the amount of such principal and
the Make-Whole Amount (if any) in respect of such principal amount being so
prepaid (subject to deferral pursuant to Section 8.14).
8.8. Refinancing of Syndicated Loan Agreement.
(a) Notice of Bank Refinancing. At least 30 days (but not more than 45
days) prior to the occurrence of the Bank Refinancing Date, the Company
shall promptly give written notice of such occurrence of the Bank
Refinancing Date to each holder of Notes. Such notice shall contain and
constitute an offer to prepay Notes as described in Section 8.8(b) and
shall be accompanied by the certificate described in Section 8.8(e).
(b) Offer to Prepay Notes. The offer to prepay the Notes contemplated
by Section 8.8(a) shall be an offer to prepay, in accordance with and
subject to this Section 8.8, all, but not less than all, the Notes held by
each holder (and in this case, "holder" in respect of any Note registered
in the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) of Notes on a date specified in such offer (the
"Refinancing Prepayment Date"). The Refinancing Prepayment Date shall be
the Bank Refinancing Date.
(c) Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.8 by causing a notice of
such acceptance or rejection to be delivered to the Company no later than 5
days prior to the Bank Refinancing Date (the "Refinancing Response Date").
A failure by a holder of Notes to respond to such notice by accepting or
rejecting such offer to prepay made pursuant to this Section 8.8 by the
Refinancing Response Date shall be deemed to constitute an acceptance of
such offer by such holder.
-43-
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.8 shall be at 100% of the principal amount of such Notes
(together with interest thereon accrued to the date of prepayment), plus
accrued PIK Management Fees (together with interest thereon accrued to the
date of prepayment), plus the Make-Whole Amount determined for the date of
prepayment with respect to such principal amount, plus all Deferred
Make-Whole Amounts in respect of prior prepayments of the Notes and
interest thereon accrued to the date of prepayment. Two Business Days prior
to the Refinancing Prepayment Date, the Company shall deliver to each
holder of Notes being prepaid a certificate of a Senior Financial Officer
of the Company specifying the calculation of such Make-Whole Amount as of
the Refinancing Prepayment Date (and including copies of the Bloomberg
Financial Markets Commodities News screen, Reuters screen or other relevant
source of market data used to determine the Reinvestment Yield, as
applicable). The prepayment shall be made on the Refinancing Prepayment
Date.
(e) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.8 shall be accompanied by a certificate, executed by a
Senior Financial Officer of the Company and dated the date of such offer,
specifying: (i) the Refinancing Prepayment Date; (ii) that such offer is
made pursuant to this Section 8.8; (iii) the principal amount of each Note
offered to be prepaid; (iv) the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of the notice
were the date of the prepayment), setting forth the details of such
computation (including copies of the Bloomberg Financial Markets
Commodities News screen, Reuters screen or other relevant source of market
data used to determine the Reinvestment Yield, as applicable); (v) the
interest that would be due on each Note offered to be prepaid, accrued to
the Refinancing Prepayment Date; and (vi) that the conditions of this
Section 8.8 have been fulfilled.
(f) Elimination of Refinancing Put. The obligations of the Company set
forth in clauses (a) through (e) of this Section 8.8 shall be eliminated
and shall no longer be in force or of any effect in the event that all of
the following conditions precedent (collectively, the "Put Elimination
Conditions") are satisfied on the Bank Refinancing Date:
(i) the ratio of Consolidated Gross Borrowings to Consolidated
EBITDA for each twelve-month period ending on the two most recently
ended Fiscal Quarters shall not have been greater than 2.50:1;
(ii) the ratio of Consolidated EBITDA to Consolidated Net
Interest Expenditure for each twelve-month period ending on the two
-44-
most recently ended Fiscal Quarters shall have been not less than
6.00:1;
(iii) no Default or Event of Default shall have occurred which is
continuing;
(iv) the representations and warranties contained in the Sections 5.1,
5.4, 5.8, 5.9, 5.10, 5.11, 5.12, 5.18 and 5.19 shall be true and correct at
such time as if made at such time and the Company shall have delivered an
Officer's Certificate to such effect;
(v) neither the Company nor any Subsidiary shall be in default, and no
waiver of default shall be then in effect, in the payment of any principal
or interest on any Borrowed Money of the Company or any Subsidiary, and no
event or condition shall exist with respect to any Borrowed Money that
would permit (or that with the giving of notice or the lapse of time, or
both, would permit) one or more Persons to cause such Borrowed Money to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment and the Company shall have delivered an
Officer's Certificate to such effect;
(vi) the Company shall have delivered an Officer's Certificate to the
effect that it is not aware (after due inquiry) of any matter or event
which is reasonably likely to result in a breach of the Sections in this
Agreement setting forth the financial covenants or an Event of Default
under Section 11(a), Section 11(b), Section 11(f), Section 11(h), Section
11(i), Section 11(j) or Section 11(k) either immediately on such date or
within the period ending 12 months after such date; and
(vii) after giving effect to any refinancing or repayment in full of
the Syndicated Loan Agreement, (A) any such refinancing shall not require
priority treatment, (B) any such refinancing shall either be wholly
unsecured or shall be secured on a pari passu basis with the Finance
Documents and such refinancing banks shall have entered into an
intercreditor agreement with the Noteholders confirming the pari passu
relationship of the Noteholders and such refinancing banks and otherwise in
form, scope and substance reasonably satisfactory to the Noteholders, and
(C) the Company shall be in compliance with the requirement to maintain
Committed Medium-Term Bank Facilities referred to in Section 9.2.3.
Each of the ratios referred to in clause (i) and clause (ii) above shall be
determined for and tested as at the end of each applicable Fiscal Quarter on
-45-
the basis of the Company's management accounts and audited consolidated
financial statements. Consolidated EBITDA and Consolidated Net Interest
Expenditure shall be calculated on a rolling twelve months basis and
Consolidated Gross Borrowings shall be calculated on the basis of the average
daily outstandings during the period of two consecutive Fiscal Quarters ending
on each testing date.
The ratios referred to in clause (i) and clause (ii) above will be adjusted
on a pro forma basis to take into account any net proceeds of any rights issue
or similar equity offering by the Company or the disposal of the Group's shares
in Zenith whether pursuant to the Zenith Joint Venture Agreement or otherwise.
Such adjustments will be made by reducing the aggregate amount of Consolidated
Gross Borrowings by the amount of any such net proceeds applied in permanent
prepayment of Consolidated Gross Borrowings as permitted under this Agreement,
by adjusting Consolidated Net Interest Expenditure by the greater of the average
interest rate or the interest rate of the actual debt paid down, and by
adjusting Consolidated EBITDA to account for the disposal of the Group's shares
in Zenith.
8.9. Change of Control.
(a) Notice of Change in Control or Control Event. On the occurrence of
any Change in Control or Control Event, the Company shall promptly give
written notice of such Change in Control or Control Event to each holder of
Notes. In the case that a Change in Control has occurred, such notice shall
contain and constitute an offer to prepay Notes as described in Section
8.9(b) and shall be accompanied by the certificate described in Section
8.9(e).
(b) Offer to Prepay Notes. The offer to prepay Notes contemplated by
Section 8.9(a) shall be an offer to prepay, in accordance with and subject
to this Section 8.9, all, but not less than all, the Notes held by each
holder (and in this case, "holder" in respect of any Note registered in the
name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) of Notes on a date specified in such offer (the "Control
Prepayment Date"). The Control Prepayment Date shall be 30 days after the
date of such offer (provided that if such day is not a Business Day than
the Control Prepayment Date shall be the first Business Day thereafter),
but in no event shall be later than the date the facilities under the
Syndicated Loan Agreement or any Committed Medium-Term Bank Facilities are
cancelled and outstandings thereunder are declared or become due and
payable thereunder (the "Bank Control Payment Date"). The offer to prepay
Notes contemplated by Section 8.9(a) shall specify the Bank Control Payment
Date. If the Control Prepayment Date shall not be specified in such offer,
the Control Prepayment Date shall be the earlier of (i) the 30th day after
the date
-46-
of such offer (provided that if such day is not a Business Day than the
Control Prepayment Date shall be the first Business Day thereafter) and
(ii) the Bank Control Payment Date.
(c) Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.9 by causing a notice of
such acceptance or rejection to be delivered to the Company by 30 days
after the receipt of such offer or if the Bank Control Payment Date is
sooner, 5 days prior to the Bank Control Payment Date (the "Control
Response Date"). A failure by a holder of Notes to respond to such notice
by accepting or rejecting such offer to prepay made pursuant to this
Section 8.9 by the Control Response Date shall be deemed to constitute an
acceptance of such offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.9 shall be at 100% of the principal amount of such Notes
(together with interest thereon accrued to the date of prepayment), plus
accrued PIK Management Fees (together with interest thereon accrued to the
date of prepayment), plus the Make-Whole Amount determined for the date of
prepayment with respect to such principal amount, plus all deferred
Make-Whole Amounts in respect of prior prepayments of the Notes and
interest thereon accrued to the date of prepayment, plus a change of
control fee in an aggregate amount equal the Change of Control Amount
determined for the date of prepayment with respect to such prepaid
principal amount (the "Change of Control Fee"). Two Business Days prior to
the Control Prepayment Date, the Company shall deliver to each holder of
Notes being prepaid a certificate of a Senior Financial Officer of the
Company specifying the calculation of such Make-Whole Amount and such
Change of Control Fee as of the Control Prepayment Date (and including
copies of the Bloomberg Financial Markets Commodities News screen, Reuters
screen or other relevant source of market data used to determine the
relevant Reinvestment Yield, as applicable). The prepayment shall be made
on the Control Prepayment Date.
(e) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.9 shall be accompanied by a certificate, executed by a
Senior Financial Officer of the Company and dated the date of such offer,
specifying: (i) the Control Prepayment Date; (ii) that such offer is made
pursuant to this Section 8.9; (iii) the principal amount of each Note
offered to be prepaid; (iv) the estimated Make-Whole Amount and Change of
Control Fee, if any, due in connection with such prepayment (calculated as
if the date of the notice were the date of the prepayment), setting forth
the details of such computation (including copies of the Bloomberg
Financial Markets Commodities News screen, Reuters screen or other relevant
source of market data used to
-47-
determine the relevant Reinvestment Yield, as applicable); (v) the interest
that would be due on each Note offered to be prepaid, accrued to the
Control Prepayment Date; (vi) that the conditions of this Section 8.9 have
been fulfilled; and (vii) in reasonable detail, the nature and date of the
Change in Control.
(f) Following Prepayment of the Notes. In the event of a prepayment of
the Notes at any time prior to a Change of Control or a Control Event and
the occurrence of a Change of Control or a Control Event within 6 months
following such prepayment, the Company will be obligated, as a separate and
continuing obligation, to pay, on the date of such Change of Control or
Control Event, to each holder of Notes (as of the date of such prepayment)
an amount equal to the Change of Control Amount calculated on the basis
that such prepayment was in connection with a Change of Control or Control
Event on such prepayment date. Furthermore, the Company will, within five
Business Days after any Responsible Officer has knowledge of the occurrence
of any such Change in Control or Control Event, give written notice of such
Change in Control or Control Event to each holder of Notes (as of the date
of such prepayment).
8.10. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes, the principal amount
of the Notes to be prepaid shall be allocated among all Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof not theretofore called for prepayment.
8.11. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Issuer shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Issuer and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.12. Purchase of Notes.
Neither the Issuer nor the Company will, nor will either of them permit any
Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the
-48-
Notes in accordance with the terms of this Agreement and the Notes or (b)
pursuant to an offer made by the Issuer, the Company or any such Affiliate to
all holders of the Notes then outstanding to purchase Notes on the same terms
and conditions, pro rata among all Notes tendered, which offer shall remain
outstanding for a reasonable period of time (not to be less than 30 days).
Any Notes so repurchased shall immediately upon acquisition thereof be
cancelled and no Notes shall be issued in substitution or exchange therefor.
Promptly and in any event within five Business Days after each such
purchase of Notes, the Issuer will furnish each holder of the Notes with a
certificate of a Senior Financial Officer of the Issuer describing such purchase
(including the aggregate principal amount of Notes so purchased and the purchase
price therefor) and certifying that such purchase was made in compliance with
the requirements of this Section.
8.13. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount shall in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Applicable Margin" means 0.50% (50 basis points).
"Called Principal" means, with respect to any Note, the principal of such
Note that is to be prepaid pursuant to Section 8 or has become or is declared to
be immediately due and payable pursuant to Section 12.1, as the context
requires.
"Discounted Value" means, with respect to the Called Principal of any Note,
the amount obtained by discounting all Remaining Scheduled Payments with respect
to such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Existing Notes is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of any
Note, the sum of the Applicable Margin plus the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on (x) the Bloomberg Financial Markets News screen PX1 or the
equivalent screen provided by Bloomberg Financial Markets News, or (y) if such
on-line market data is not at the time provided by Bloomberg Financial Markets
News, on the display designated
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as "Page 500" on the Telerate service (or such other display as may replace Page
500 on the Telerate service), in any case for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not reported as
of such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between (1) the actively traded U.S. Treasury security with a maturity
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with a maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal, the
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called Principal
of any Note, all payments of such Called Principal and interest thereon that
would be due after the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8 or 12.1.
"Settlement Date" means, with respect to the Called Principal of any Note,
the date on which such Called Principal is to be prepaid pursuant to Section 8
or has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
The Make-Whole Amount shall be calculated for any prepayment or repayment
of the Notes based on the interest rate, interest payment and mandatory
prepayment schedule and maturity date of the notes as set forth in the Existing
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Notes and the Existing Note Purchase Agreements in each case as in effect
immediately prior to the Effective Date.
Each of the Company and the Issuer acknowledges, and the parties hereto
agree, that the right of each holder to have maintained its investment in the
Notes to the maturity date thereof free from prepayment by the Issuer is a
valuable right and that the provision for the payment of a Make-Whole Amount by
the Company, in the event that the Notes are prepaid under the terms of this
Agreement or are accelerated as a result of an Event of Default under certain
circumstances, is intended to provide compensation for the deprivation of such
right in connection with the circumstances under which the transactions
contemplated by this Agreement (including, without limitation, the Restructuring
Transaction) have been agreed and under any circumstances arising out of an
Event of Default.
8.14. Deferred Make-Whole Amount.
(a) In the event of a prepayment by the Issuer of less than all of the
Notes prior to the Bank Refinancing Date, the Make-Whole Amount in respect
of such partial repayment shall be deferred (the "Deferred Make-Whole
Amount") and payable on the earliest of (i) the prepayment in full of the
Notes, (ii) the Bank Refinancing Date, (iii) any enforcement of the
Security or any of the Subsidiary Guarantees, (iv) any of the Events of
Default described in paragraph (h), (i), (j) or (k) of Section 11, or (v)
any of the Notes becoming due and payable, whether automatically or by
declaration.
(b) Interest shall accrue on such Deferred Make-Whole Amount at all
times on and after the date on which the Issuer makes the partial repayment
in respect of which such Deferred Make-Whole Amount was calculated at the
rate of 9.25% per annum and otherwise in the same manner as if such
Deferred Make-Whole Amount was principal of the Notes (the "Deferred
Make-Whole Interest"), and the Company shall pay such Deferred Make-Whole
Interest in full in arrears, on the date on which the Deferred Make-Whole
Amount is payable.
8.15. Payments Subject to Intercreditor Agreement.
For the avoidance of doubt, all prepayments made by the Company pursuant to
this Section 8 shall be made in accordance with, and shall be subject to the
terms of, the terms of the Intercreditor Agreement.
9. AFFIRMATIVE COVENANTS.
9.1. Prior to the Put Elimination Date.
Prior to the Put Elimination Date, the Issuer and the Company jointly and
severally covenant that so long as any of the Notes are outstanding:
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9.1.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations material to
the ownership of their respective properties or to the conduct of their
respective businesses to which each of them is subject, including without
limitation Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations material to the ownership of their respective properties or
to the conduct of their respective businesses.
9.1.2. Corporate Existence, etc.
Subject to Section 10.1.4, each of the Issuer and the Company will at
all times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.1.3 and 10.1.4, the Company will at all
times preserve and keep in full force and effect the corporate existence of
each of its other Subsidiaries (unless merged into the Company or a
Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect
such corporate existence, right or franchise could not, individually or in
the aggregate, have a Material Adverse Effect.
9.1.3. Consents and Licenses.
The Company and its Subsidiaries will 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, authorization, 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 their obligations
under this Agreement, the Notes, the Subsidiary Guarantees and the Security
Documents, and in the case of any such Security Documents, prior to the
execution of such Security Documents.
9.1.4. Proceeds from Syndicated Loan Agreement.
The Company will ensure that the proceeds of drawings under the
Syndicated Loan Agreement are used exclusively for general corporate
purposes.
9.1.5. Pari Passu.
Except as preferences and priorities are created in favor of, and
allocated among the Banks and the Noteholders pursuant to the
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Intercreditor Agreement, the Common Security Trust Deed and the Security
Documents, the Company will ensure that (a) the Obligors' respective
obligations under the Notes, this Agreement and the Guarantees will at all
times rank at least pari passu with all of the Obligors' other outstanding
unsecured and unsubordinated Indebtedness (including, without limitation,
borrowings under the Syndicated Loan Agreement), except for those
obligations that are mandatorily preferred by law and not by contract, and
(b) the Security will have at all times first ranking priority, and will
not be subject at any time to any prior ranking or pari passu ranking
Encumbrances other than Permitted Encumbrances (except as specifically
stated in the Security Memorandum).
9.1.6. Tax.
The Company and the Issuer will ensure that each Obligor maintains its
tax residence in the jurisdiction of incorporation and is not resident or
liable to tax in any other jurisdiction.
9.1.7. Pension Schemes.
The Company will ensure that it and each of its Subsidiaries
contributes to the pension schemes from time to time applying to their
employees in the United States, 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 this 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.
9.1.8. Interest Rate Hedging and Foreign Exchange Hedging.
The Company will ensure that with effect from the Effective 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.
9.1.9. ERISA.
(a) The Company will promptly and in any event within thirty days
after the filing thereof with the Internal Revenue Service of the
United States, deliver to the Noteholders copies of each Schedule B
(Actuarial Information) to the Annual Report (IRS Form 5500 Series) if
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required with respect to each Plan covered by Title IV of ERISA other
than a Multiemployer Plan.
(b) The Company will promptly and in any event within ten
Business 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 Noteholders 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.
(c) The Company will promptly and in any event within five
Business Days after receipt thereof by the Obligor or ten Business
Days after receipt thereof by any member of the Group or any ERISA
Affiliate other than the Obligor, to deliver to the Noteholders copies
of each notice from PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan.
(d) 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 Noteholders.
9.1.10. Margin Stock.
The Company will ensure that no amounts raised under the Syndicated
Loan Agreement will be used, directly or indirectly, to purchase or carry
margin stock.
9.1.11. Guarantees and Security from Material Subsidiaries.
(a) The Company will procure, to the extent consistent with the
principles agreed in the Security Memorandum:
(i) that documentation, in form and substance satisfactory
to the Noteholders (acting reasonably), supplemental to and/or
incorporating provisions substantially the same as the Subsidiary
Guarantees and/or such other relevant Security Documents, and
such ancillary documentation as the Noteholders may reasonably
require, shall be executed and delivered to the Noteholders by
any Material Subsidiary incorporated in (or formed under the laws
of) England and
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Wales, the United States of America, Germany or the Netherlands
which has not already granted a Subsidiary Guarantee and
Encumbrances in accordance with the Security Memorandum (in each
case together with legal opinions relating thereto in form and
substance satisfactory to the Noteholders (acting reasonably)) as
soon as is reasonably practicable and in any event within 45 days
of such requirement arising under this subclause (i), to the
intent that each such Material Subsidiary shall guarantee the
obligations of the Obligors under this Agreement, the Notes, the
Subsidiary Guarantees and the Security Documents and create
Encumbrances securing such obligations in accordance with the
Security Memorandum; and
(ii) that the immediate holding company of every member of
the Group required to provide security and/or a guarantee
pursuant to this Section 9.1.11 (each a "relevant Subsidiary")
executes and delivers to the Noteholders, as soon as is
reasonably practicable and in any event on or before the deadline
under this Section 9.1.11 for the execution and delivery of such
security and/or guarantee by its relevant Subsidiary,
documentation, in form and substance reasonably satisfactory to
the Noteholders which creates an Encumbrance over the shares in
such relevant Subsidiary (if such shares are not already the
subject of an Encumbrance created by a Security Document which is
governed by the laws of the jurisdiction of incorporation or
formation of such relevant Subsidiary executed by such holding
company) and, in the case of relevant holding companies
incorporated or formed in England and Wales only, a fixed and
floating charge over all the assets and undertaking of any such
holding company governed by the laws of England and Wales (if
such assets and undertaking are not already the subject of such
fixed and floating charge created by a Security Document) and a
guarantee of the obligations of the Obligors under the this
Agreement, the Notes, the Subsidiary Guarantees and the Security
Documents (if such guarantee has not already been executed)
together with such ancillary documentation as the Noteholders may
reasonably require and legal opinions, in each case in form and
substance satisfactory to the Noteholders (acting reasonably).
(b) For the avoidance of doubt, the refinancing of the Syndicated
Loan Agreement shall not give rise to any obligation of the
Noteholders to release any Guarantee or Security unless the Put
Elimination Date shall have occurred and such refinancing is not
secured. On the Put Elimination Date, all Security (but not any
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Guarantees) shall be released (and the Intercreditor Agreement
terminated) by the Noteholders so long as the Company has provided the
Noteholders with evidence in form and substance satisfactory to the
Noteholders that such refinancing of the Syndicated Loan Agreement is
wholly unsecured and does not require priority treatment.
(c) For purposes of this Section 9.1.11, "holding company" means,
in relation to a Person, an entity of which that Person is a
Subsidiary.
9.1.12. Preference Shares.
The Company will ensure that preference shares will be redeemed by the
Group no earlier than their stated maturity as at the date of this
Agreement (which in the case of Lighthouse and its Subsidiaries are set out
in Schedule 9.1.12) or, in the case of preference shares issued in
accordance with Section 10.1.8, no earlier than their stated maturity as at
the date of their issue.
9.1.13. Environmental.
The Company will ensure that each member of the Group will comply with
all Environmental Laws and all authorizations required by any Environmental
Law applicable to its business to the extent that a failure to so comply
would be reasonably expected to have a Material Adverse Effect.
9.1.14. Cash Management Arrangements.
(a) The Company will ensure that it will use its best endeavours
to procure that cash held by members of the Non-Guarantor Group and
which is not required to meet working capital liabilities will be
repatriated directly or indirectly to the bank account of a member of
the Guarantor Group located in England and Wales or the United States,
to the extent that such repatriation can be done in a legal and
tax-efficient manner and without incurring costs which are
disproportionate to the benefit to the Noteholders.
(b) The Company will procure that the members of the Group will
conduct their Cash Pooling Arrangements in the UK, the US and the
Euro-Zone with a Bank or Banks, excluding the Cash Pooling
Arrangements listed in Schedule 9.1.14 for so long as they continue
pursuant to the same terms as and from March 27, 2002 and except as
otherwise agreed in writing with the Majority Holders.
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(c) The Company will not permit any member of the Group
incorporated or formed in the United States or in England and Wales
that is not a Subsidiary Guarantor to be a party to any Cash Pooling
Arrangements with any other member or members of the Group, other than
where the value of any loans, credit, rights of set-off, guarantee or
other Encumbrance provided to such member or members of the Group does
not exceed (pound)500,000 and (for the avoidance of doubt) such loans,
credit, rights of set-off, guarantee or other Encumbrance constitute
Permitted Investments.
9.2. Following the Put Elimination Date.
On and after the Put Elimination Date, the Issuer and the Company jointly
and severally covenant that so long as any of the Notes are outstanding:
9.2.1. Compliance with Law.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including without limitation Environmental Laws,
and will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership
of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
9.2.2. Corporate Existence, etc.
Subject to Section 10.2.4, each of the Issuer and the Company will at
all times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.2.3 and 10.2.4, the Company will at all
times preserve and keep in full force and effect the corporate existence of
each of its other Subsidiaries (unless merged into the Company or a
Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect
such corporate existence, right or franchise could not, individually or in
the aggregate, have a Material Adverse Effect.
9.2.3. Maintenance of Committed Medium-Term Bank Facilities.
At all times after the Put Elimination Date, the Company shall
maintain Committed Medium-Term Bank Facilities having committed
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availability levels which, in the aggregate, on any date of determination,
are greater than or equal to the aggregate principal amount of the Notes
outstanding (provided that the Company shall not be in violation of this
covenant if any bank or other financial institution providing such
facilities shall be required, by reason of illegality, increased costs or
regulatory restriction as set forth in customary banking documentation, to
withdraw such facilities).
9.3. Generally.
The Issuer and the Company jointly and severally covenant that so long as
any of the Notes are outstanding:
9.3.1. Insurance.
The Company will and will cause each of its Material Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such
casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in
the case of entities of established reputations engaged in the same or a
similar business and similarly situated.
9.3.2. Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and
tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if the Company has concluded that
such discontinuance is desirable in the conduct of its business and that
such discontinuance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
9.3.3. Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed by them in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all
other taxes, assessments, governmental charges, or levies imposed on them
or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due and
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payable that have or might become a Encumbrance on properties or assets of
the Company or any Subsidiary, provided that neither the Company nor any
Subsidiary need file a tax return or pay any such tax or assessment or
claims if (a) the amount, applicability or validity thereof is contested by
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary or (b) the nonfiling of all such tax returns and
the nonpayment of all such taxes, assessments and claims in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
9.3.4. Lines of Business.
The Company and its Subsidiaries taken as a whole will at all times
remain principally engaged in the marketing communications and/or marketing
and media services businesses or businesses reasonably related thereto or
in furtherance thereof.
9.3.5. Additional Subsidiary Guarantors; Release of Subsidiary
Guarantors.
(a) The Company will cause each of its Subsidiaries that becomes
a borrower or a guarantor under or in respect of the Syndicated Loan
Agreement, any Committed Medium-Term Bank Facilities or a Bank Credit
Facility on or after the Effective Date to become a Subsidiary
Guarantor, prior to or concurrently with so becoming a borrower or a
guarantor under any such other loan facility, by delivering to each
holder of the Notes (and/or the Common Security Trustee for the
benefit of the Noteholders, as applicable) (i) a Subsidiary Guarantee
duly executed by that Subsidiary, (ii) the documents described in
Exhibit 9.3.5 and (iii) opinions of reputable counsel in the
jurisdiction of organization of that Subsidiary reasonably
satisfactory to the Majority Holders and of White & Case LLP or other
counsel reasonably satisfactory to the Majority Holders (which
opinions shall be reasonably satisfactory to the Majority Holders and
may be subject to customary exceptions, qualifications and limitations
under the circumstances none of which may relate to the absence of
shareholder approval or be material to the practical realization of
the benefits of a guarantee of Borrowed Money) to the effect that such
Subsidiary Guarantee has been duly authorized, executed and delivered
by such Subsidiary and is valid, binding and enforceable in accordance
with its terms.
(b) Any Subsidiary Guarantor which has ceased to be a Subsidiary
pursuant to a disposition permitted under the terms of this
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Agreement, the Intercreditor Agreement and the Common Security Trust
Deed or which is the subject of a binding agreement under which it is
to cease to be a Subsidiary pursuant to a disposition permitted under
the terms of this Agreement, the Intercreditor Agreement and the
Common Security Trust Deed shall, at the request of the Company, be
discharged from all of its obligations and liabilities under its
Subsidiary Guarantee by the Majority Holders entering into a release
in form and substance reasonably satisfactory to the Majority Holders,
and each holder of a Note, by acceptance of such Note, agrees to enter
into such a satisfactory release promptly upon request, provided in
each case that (i) after giving effect to such release (including
without limitation such Subsidiary ceasing to be a Subsidiary
Guarantor for purposes of Sections 10.1.1, 10.1.2, 10.2.1 and 10.2.2
of this Agreement) no Default or Event of Default shall have occurred
and be continuing, (ii) no amount is then due and payable under the
Subsidiary Guarantee of such Subsidiary Guarantor, (iii) such
Subsidiary Guarantor is not at the time a borrower or a guarantor
under the Syndicated Loan Agreement or any other Bank Credit Facility
or a guarantor of any other Borrowed Money of the Company or another
Subsidiary Guarantor that is not also concurrently being released and
(iv) such request shall be accompanied by a certificate of a Senior
Financial Officer of the Company to the foregoing effect and setting
forth the information (including detailed computations) required to
establish compliance with the foregoing requirements.
(c) Notwithstanding anything in this Section 9.3.6 to the
contrary, no Designated non-U.S. Subsidiary shall be required to
become a Subsidiary Guarantor to the extent that it becomes a borrower
or a guarantor under or in respect of the Syndicated Loan Agreement,
any Committed Medium-Term Bank Facilities or a Bank Credit Facility on
or after the Effective Date provided that the Bank Finance Parties or
the banks and lending institutions party to such Committed Medium-Term
Bank Facilities or such Bank Facilities agree to share any recoveries
with the Noteholders on a pari passu basis pursuant to the terms of an
intercreditor agreement in form, scope and substance reasonably
satisfactory to the Noteholders.
9.3.6. Zenith and Facilities Group.
The Company will ensure that:
(a) within thirty (30) Business Days after the Effective Date the
Zenith SPV shall have acceded to the Facilities Group Joint Venture
Agreement and that all of the Group's right, interest and title
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to shares in Facilities Group shall have been transferred to the
Zenith SPV;
(b) no member of the Group will terminate, amend or vary (or
acquiesce in any termination, amendment or variation of) the terms of
the Zenith Joint Venture Agreement in a way which might reasonably be
expected to adversely affect the Group's rights or interests under or
in respect of the put and call options contained therein relating to
the Group's shares in the Zenith (except as otherwise expressly
required in this Agreement) or which might reasonably be expected to
adversely affect (or delay) the amount of receipt of any amount
referred to Section 8.7;
(c) any and all of the Group's right, interest and title in
respect of the shares in Zenith will be held at all times by the
Zenith SPV;
(d) the Zenith SPV will not carry out any trading, business or
other activity or own any material assets other than holding the
shares in Zenith and Facilities Group, acting in relation to the joint
ventures constituted by the Zenith Joint Venture Agreement and the
Facilities Group Joint Venture Agreement, and complying with the call
options or exercising the put options under the Zenith Joint Venture
Agreement and will not incur any material liabilities of any nature
whatsoever (whether actual or contingent) other than (i) liabilities
for reasonable professional fees, (ii) liabilities under the Zenith
Joint Venture Agreement and Facilities Group Joint Venture Agreement,
(iii) liabilities under the Security Documents and Subsidiary
Guarantees to which it is party, (iv) liabilities under any loans
entered into with the Company in connection with the transfer of the
shares in Zenith and Facilities Group from the Company to the Zenith
SPV, and (v) liabilities which will arise if it were wound up;
(e) the Zenith SPV will not transfer or otherwise dispense of any
interest in any of the shares it holds from time to time in Zenith
other than (i) pursuant to the exercise of a call option or a put
option under the Zenith Joint Venture Agreement or (ii) pursuant to a
transfer or other disposal to a person which is not a member of the
Group and where the Net Proceeds of such transfer or disposal are at
least equal to the Net Proceeds which would be received by the Group
following the exercise of the put option under the Zenith Joint
Venture Agreement at such a time, in each case where the Net Proceeds
are applied (prior to the Put Elimination Date) in accordance with
Section 8.7, and will not create any Encumbrance over any interest in
any of
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the shares it holds from time to time in Zenith except under a
Security Document; and
(f) following the transfer of the shares in Facilities Group to
the Zenith SPV, any and all of the Group's right, interest and title
in respect of the shares in Facilities Group will be held at all times
by the Zenith SPV.
9.3.7. Executive Order 13224 of September 23, 2001.
The Company will ensure that no member of the Group will become a
person or entity described by Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism, Exec. Order
No. 13,224 66 Fed. Reg. 49,079 (2001), and neither the Company nor any
Subsidiary will knowingly become engaged in any dealings or transactions,
or be otherwise associated, with any such persons or entities in violation
of such Executive Order.
9.3.8. Audited Financial Statements for Fiscal Year 2001.
The Company will deliver to the Noteholders within 5 Business Days
after the Effective Date the audited consolidated financial statements of
the Group for the Fiscal Year ended December 31, 2001.
9.3.9. Cordiant Communications Group Australia Pty Limited.
The Company will deliver to the Noteholders within 3 days after the
Effective Date the constitution of Cordiant Communications Group Australia
Pty Limited and to procure that Chafma B.V. delivers to the Noteholders
within 3 days after the Effective Date the constitution of Cordiant
Communications (Australia) Pty Limited.
10. NEGATIVE COVENANTS.
10.1. Prior to the Put Elimination Date.
Prior to the Put Elimination Date, the Issuer and the Company jointly and
severally covenant that so long as any of the Notes are outstanding:
10.1.1. Negative Pledge.
Save for Permitted Encumbrances, the Company 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,
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rights or revenues to secure or prefer any present or future Indebtedness
of any member of the Group or any other person.
10.1.2. Other Borrowed Money and Finance Transactions.
The Company 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 for
Permitted Borrowed Money.
10.1.3. No Amalgamation and Merger.
The Company will not permit an Obligor to amalgamate or merge with any
other company or person in circumstances where the Obligor ceases to exist
or where any obligation of such Obligor to the Noteholders (or any
Encumbrance under any Security Document) is or may be detrimentally
affected.
10.1.4. Disposals.
The Company will not and will procure that none of its Subsidiaries
will sell, transfer, lease, surrender, lend or otherwise dispose of the
whole or any part of its present or future undertakings, assets or revenues
whether by one or a series of transactions related or not (or enter into
any binding commitment to do any of the same (whether conditional or
otherwise)) (each a "disposal") except for Permitted Disposals, and so that
where the asset or assets the subject of a disposal permitted by this
clause (whether as a Permitted Disposal or with the prior written consent
of the Majority Holders (but excluding the assets referred to in the last
paragraph of clause (c) of the definition of "Permitted Disposals" in the
case of any disposal under such clause)) is or are subject to an
Encumbrance created by the Security Documents, the consent of the Majority
Holders (but without prejudice or responsibility to or in respect of any
other requisite consent) shall be granted (and shall be deemed to be
granted) for the release of the Encumbrance created by the Security
Documents over such assets provided that no Default or Event of Default
shall have occurred and be continuing neither remedied nor waived and the
Majority Holders shall accordingly instruct the Common Security Trustee to
grant the relevant releases.
10.1.5. Loans and Guarantees.
The Company 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
(a) Permitted Guarantees to or for the benefit of any Person, and (b) loans
or
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credit to a member of the Guarantor Group or loans or credit from one
member of the Non-Guarantor Group to another member of the Non-Guarantor
Group and loans or credit constituting Permitted Investments.
10.1.6. Acquisitions.
Save for Permitted Acquisitions, the Company 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) (or commit to do any of the
same (whether conditionally or otherwise)), and for the avoidance of doubt,
any such acquired businesses shall be immediately subject to the
undertakings in Sections 9.1.11 and 10.1.2.
10.1.7. Change of Business.
The Company 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.
10.1.8. Preference Shares.
The Company will not, and will procure that none of its Subsidiaries
will, issue any shares or stock which are redeemable at the option of the
holder thereof or which mature or are mandatorily redeemable or which are
convertible or exchangeable for Borrowed Money of the Group save as set out
in Schedule 9.1.12.
10.1.9. Transactions Similar to Security.
The Company will not, and will procure that no other member of the
Group will:
(a) sell or otherwise dispose of any of its assets on terms
whereby such asset is or may be leased to, or re-acquired or acquired
by, the Parent or any other member of the Group; or
(b) sell, factor, discount, or dispose of any of its receivables
other than the sale, factoring, discounting or disposal of receivables
on a non-recourse basis where the aggregate amount of receivables so
sold, factored, discounted or disposed does not exceed (pound)500,000
(or its equivalent) in aggregate.
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10.1.10. Rights Issue/Equity Raising.
The Company will not issue any shares or otherwise acquire any
additional capital other than:
(a) the issue of ordinary shares to the extent permitted (i) as
consideration for those acquisitions set out in Schedule 10.1.6
pursuant to the Company's obligations (actual or contingent) as at the
Effective Date or (ii) in consideration of Permitted Acquisitions
(other than those referred to in subclause (i)); and
(b) the issue of ordinary shares for cash payable in full on the
date of issue and which ordinary shares do not carry any right to a
return or to redemption nor any right to be converted into shares
carrying such right before all amounts (whether actual or contingent)
owing under the Notes have been paid in full, or the granting of an
option to call on the Company to issue such shares,
and it will at all times procure that no other member of the Group will
issue any shares or otherwise acquire any additional capital (or grant any
rights to call for the issue or allotment of any of the same) other than
the issue of shares by a member of the Group to another member of the Group
described in clause (b) of the definition of "Permitted Acquisitions" or
constituting Permitted Investments provided that (A) where the existing
shares in such member of the Group are subject to an Encumbrance under any
of the Security Documents, such additional shares are also subject to such
an Encumbrance and (B) where such existing shares are subject to
Encumbrances which are structured to avoid an adverse US Tax consequence to
the Group, such additional shares shall only be issued to the existing
holding company of the issuing member of the Group.
10.1.11. Dividends and Other Distributions.
The Parent will not:
(a) and will procure that no other member of the Group will
redeem or purchase or otherwise reduce any of the Parent's share
capital or any uncalled capital or unpaid liability in respect thereof
or reduce the amount (if any) for the time being standing to the
credit of the Parent's share premium account or capital redemption or
other undistributable reserve in any manner (other than a partial
capital reorganization in order to create distributable reserves where
no amount is paid or becomes payable (including, without limitation,
by way of set-off, combination of accounts or otherwise) to any
shareholder in the Parent as part of such reorganization); or
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(b) declare, pay (including, without limitation, by way of
set-off, combination of accounts or otherwise) or permit to accrue any
dividend or make any other distribution or payment (whether in cash or
in specie), including any interest and/or unpaid dividends, in respect
of its equity or any other share capital for the time being in issue
except that it may declare and pay a final dividend (but not an
interim dividend) in respect of any Fiscal Year after December 31,
2001, provided that:
(i) the financial covenants set forth in this Agreement have
been tested and passed as at the June 30 financial covenants test
date in the following Fiscal Year;
(ii) no breach of any of the fiscal covenants has occurred
and is continuing and no other Default or Event of Default has
occurred which is continuing; and
(iii) the ratio of Consolidated Gross Borrowings to
Consolidated EBITDA was not greater than 3.50:1 on each of two
most recent consecutive financial covenants test dates;
(iv) the dividend does not exceed 25% of Consolidated Excess
Cash Flow if the ratio of Consolidated Gross Borrowings to
Consolidated EBITDA was not less than 3.25:1 on each of the two
most recent consecutive financial covenant test dates; and
(v) the dividend does not exceed 50% of Consolidated Excess
Cashflow; and
(vi) not later than 5 and no more than 15 Business Days
prior to the proposed date for the payment of that dividend the
finance director (or, if unavailable for any reason, any other
director in each case in such directors' opinion but without
personal liability) of the Parent delivers to the Noteholders a
certificate in which the Parent certifies (without qualification)
that:
(A) it proposes to pay a dividend and states the amount
of it;
(B) no breach of Section 10.3.1 (Financial Covenants)
has occurred and is continuing and no other Default or Event
of Default has occurred which is continuing; and
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(C) in the opinion of the board of directors of the
Parent (acting in good faith and after having regard (inter
alia) to the current and projected trading and cash flow
position of the Group (such projections being based on
reasonable assumptions), and assuming the making of such
dividend):
(1) no breach of Section 10.3.1 (Financial
Covenants) or any Event of Default is reasonably likely
to occur either immediately or within the period ending
12 months after the date of the dividend; and
(2) the Group is reasonably likely to have
sufficient working capital during such 12 month period,
and such certificate shall be accompanied by (a) a forecast for
the period of 6 full months following the proposed payment date
showing the projected respective amounts of Consolidated EBITDA,
Consolidated Gross Borrowings, Consolidated Net Interest
Expenditure, Capital Expenditure and Consolidated Net Worth and
their application to the Financial Covenants in respect of each
financial covenant test date within such period, such forecast to
be based on the knowledge of the Parent and the circumstances
then existing at such time together with reasonable assumptions,
and (b) a calculation by the Parent of Consolidated Excess Cash
Flow for the relevant Fiscal Year (showing the calculations on
which it is based) together with a statement from the Auditors as
to the amount of the Consolidated Excess Cash Flow confirming
that in all material respects the calculation has been made in
accordance with the audited consolidated financial statements of
the Group for the relevant Fiscal Year and the definition of
Consolidated Excess Cash Flow.
10.1.12. Accounting Policy.
The Company will not adopt any accounting policy or change the
consistency of application of its accounting principles, standards,
practises and bases from GAAP (i) unless the revised policy, principle,
standard, practice or base adopted from time to time is in accordance with
generally accepted accounting practice in the United Kingdom and (ii)
provided that prior to any revised policy, principle, standard, practice or
base being adopted the Company will notify the Noteholders thereof and, if
required by the
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Majority Holders, will negotiate in good faith with the Noteholders in
order that the Financial Definitions and financial covenants may be amended
as may be necessary to grant to the Noteholders protection comparable to
that granted on the Restructuring Date provided that if such negotiations
are not concluded to the satisfaction of the Noteholders within 30 days
from the commencement of such negotiations (or, if earlier, any date on
which any financial statements are due to be delivered under this
Agreement) the Company agrees that it will provide either financial
statements on the same basis as before or provide financial statements
together with a reconciliation of those financial statements to GAAP (such
reconciliation, in the case of any audited financial statements, to be
prepared by the Auditors and addressed to the Noteholders).
10.1.13. Accounting Reference Date.
The Company will not, without the consent of the Majority Holders,
change its accounting reference date from December 31.
10.1.14. Cash Management Arrangements.
The Company will not permit any member of the Group which is not an
Obligor incorporated or formed in the United States or in England and Wales
to be a party to any Cash Pooling Arrangements with any other member or
members of the Group, other than where the value of any loans, credits,
rights of set-off, guarantees or other Encumbrances provided to such
members of the Group does not exceed (pound)500,000 and such loans,
credits, rights of set-off, guarantees or other Encumbrances constitute
Permitted Investments.
10.2. Following the Put Elimination Date.
On and after the Put Elimination Date, the Issuer and the Company jointly
and severally covenant that so long as any of the Notes are outstanding:
10.2.1. Encumbrances.
The Company will not and will not permit any Subsidiary to create,
assume, incur or suffer to exist any Encumbrance upon or with respect to
any property or assets, whether now owned or hereafter acquired, except for
Permitted Encumbrances. Notwithstanding the foregoing and regardless of any
Encumbrances otherwise permitted under this Section 10.2.1, the Company
will not and will not permit any Subsidiary to create, assume, incur or
suffer to exist any floating charges over all assets and undertakings of
any member of the Group conferring (whether expressly or by implication) on
the chargee a power to appoint any administrative receiver, receiver and/or
manager or any other receiver (a "Receiver") (or similar Encumbrances
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under the laws of any jurisdiction conferring (whether expressly or by
implication) similar powers on the chargee to appoint a Receiver) or any
Encumbrances on book debts, receivables and any other current assets of the
Group (other than the sale, factoring or discounting of receivables on a
non-recourse basis which are otherwise Permitted Encumbrances and where the
aggregate amount of receivables so sold, factored or discounted does not
exceed (pound)500,000 (or its equivalent in aggregate).
10.2.2. Subsidiary Borrowings.
The Company will not permit any Subsidiary (other than the Issuer or a
Subsidiary Guarantor) to create, incur, assume, guarantee, have
outstanding, or otherwise become or remain liable with respect to, any
Borrowed Money other than:
(a) Borrowed Money owing to either the Company or to any
Subsidiary Guarantor;
(b) Borrowed Money of any Persons acquired by any member of the
Group pursuant to the acquisition of Diamond Ad Ltd. provided that
such Borrowed Money of all such Persons at no time exceeds Korean Won
16,900,000,000 (or its equivalent) in the aggregate;
(c) Borrowed Money in respect of guarantees issued by banks on
behalf of the Group to media authorities in connection with bona fide
arrangements for maintenance of media accreditation; and
(d) Borrowed Money not otherwise permitted by the foregoing
clauses (a) through (c), provided that the sum (without duplication)
of (i) the aggregate principal amount of all Borrowed Money secured by
Encumbrances described in subclause (b)(x)(A) of the definition of
"Permitted Encumbrances" and (ii) the aggregate principal amount of
Borrowed Money of Subsidiaries (other than the Issuer and Subsidiary
Guarantors) outstanding pursuant to the provisions of this Section
10.2.2(d) shall at no time exceed 10% of Consolidated Net Worth.
10.2.3. Asset Dispositions.
The Company will not and will not permit any Subsidiary to, directly
or indirectly, make any sale, transfer, lease (as lessor), loan or other
disposition, in one transaction or a series of transactions, of any
property or assets (each an "Asset Disposition") other than
(a) Asset Dispositions to the Company or a Subsidiary Guarantor;
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(b) Asset Dispositions in the ordinary course of business; and
(c) other Asset Dispositions, provided that in each case
(i) immediately before and after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing,
(ii) the aggregate Relevant Value of property or assets
disposed of in such Asset Disposition and all other Asset
Dispositions by the Company and its Subsidiaries (other than as
permitted by clauses (a) and (b) above) during the then current
Fiscal Year (commencing with the Fiscal Year ending on December
31, 2001) does not exceed 10% of Consolidated EBITDA for the
preceding Fiscal Year, and
(iii) the aggregate Relevant Value of property or assets
disposed of in such Asset Disposition and all other Asset
Dispositions made pursuant to this clause (c) since the April 5,
2001 does not exceed 30% of Consolidated EBITDA for the then
preceding Fiscal Year
and provided further that for purposes of subclauses (ii) and (iii)
above there shall be excluded the Relevant Value of property or assets
disposed of in an Asset Disposition if and to the extent such Asset
Disposition is made for cash, payable in full upon the completion of
such Asset Disposition, and the net proceeds realized upon such Asset
Disposition are applied by the Company or such Subsidiary, as the case
may be, within 180 days after the effective date of such Asset
Disposition to (x) reinvest in the business of the Group or (y) the
repayment of unsubordinated Borrowed Money (excluding current
maturities) of the Issuer, the Company or a Subsidiary Guarantor (and
in that connection the Company shall have made an offer to prepay all
or a portion of the outstanding Notes in accordance with Section 8.2
in an aggregate principal amount which, when added to the aggregate
Make-Whole Amount applicable thereto, is at least equal to a pro rata
portion of all such Borrowed Money to be repaid, allocated pro rata
among all Notes tendered, and the requirements of this subclause (y)
shall be deemed to be satisfied to the extent of Notes purchased
pursuant to such offer).
Forthwith and in any event within 30 days after any Asset Disposition (or
series of related Asset Dispositions) the Relevant Value of which (net of
amounts the Company expects to be excluded as aforesaid for purposes of
subclauses (ii) and (iii) of clause (c) above) exceeds 10% of Consolidated
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EBITDA for the then preceding Fiscal Year, the Company will deliver to each
holder of Notes a certificate of a Senior Financial Officer of the Company
containing calculations in reasonable detail showing the Company's
determination of such Relevant Value, which certificate shall be
accompanied by a letter from the Company's independent chartered
accountants stating that the Company's calculations agree back to the
Group's accounting records and that the method of calculation is in
accordance with this Agreement.
As used in this Section 10.4, the "Relevant Value" of any property or
assets that are the subject of an Asset Disposition shall be that portion
of Consolidated EBITDA of the Group attributable to such property or
assets, calculated by reference to the four consecutive Fiscal Quarters
then most recently ended or, in the case of property or 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 Asset Disposition. For purposes of this Section 10.4 any shares of
Voting Stock of a Subsidiary that are the subject of an Asset Disposition
shall be valued at the greater of (1) the fair market value of such shares
as determined in good faith by the Board of Directors of the Company and
(2) the aggregate Relevant Value of the assets of such Subsidiary
multiplied by a fraction of which the numerator is the aggregate number of
shares of Voting Stock of such Subsidiary disposed of in such Asset
Disposition and the denominator is the aggregate number of shares of Voting
Stock of such Subsidiary outstanding immediately prior to such Asset
Disposition.
10.2.4. Transactions with Affiliates.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service)
with any Affiliate (other than the Company or another Subsidiary), except
in the ordinary course and pursuant to the reasonable requirements of the
Company's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to the Company or such Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
10.2.5. "Off-Balance Sheet" Transactions.
The Company will not and will not permit any Subsidiary to enter into
any Sale-and-Leaseback Transaction, factoring arrangements, asset
securitizations and other similar "off-balance" sheet transactions other
than the sale, factoring or discounting of receivables on a non-recourse
basis
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where the aggregate amount of receivables so sold, factored or discounted
does not exceed (pound)500,000 (or its equivalent) in aggregate.
10.3. Generally.
The Issuer and the Company jointly and severally covenant that so long as
any of the Notes are outstanding:
10.3.1. Maintenance of Financial Conditions.
(a) The Company will not permit the ratio of Consolidated EBITDA
to Consolidated Net Interest Expenditure for each period date set out
in column A to be less than the corresponding ratio set out in column
B:
- ------------------------------------------------- ----------------------
A B
12 month period ending Ratio
- ------------------------------------------------- ----------------------
March 31, 2002 2.50:1
- ------------------------------------------------- ----------------------
June 30, 2002 1.75:1
- ------------------------------------------------- ----------------------
September 30, 2002 2.50:1
- ------------------------------------------------- ----------------------
December 31, 2002 2.50:1
- ------------------------------------------------- ----------------------
March 31, 2003 2.75:1
- ------------------------------------------------- ----------------------
June 30, 2003 3.00:1
- ------------------------------------------------- ----------------------
September 30, 2003 3.25:1
- ------------------------------------------------- ----------------------
December 31, 2003 3.75:1
- ------------------------------------------------- ----------------------
March 31, 2004 4.00:1
- ------------------------------------------------- ----------------------
June 30, 2004 4.50:1
- ------------------------------------------------- ----------------------
September 30, 2004 5.00:1
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and each quarter date thereafter
- ------------------------------------------------- ----------------------
(b) the Company will not permit the ratio of Consolidated Gross
Borrowings as at the end of, to Consolidated EBITDA in respect of,
each period set out in column A to be greater than the ratio set out
in column B:
- ------------------------------------------------- -----------------------
A B
12 month period ending Ratio
- ------------------------------------------------- -----------------------
March 31, 2002 5.75:1
- ------------------------------------------------- -----------------------
June 30, 2002 8.50:1
- ------------------------------------------------- -----------------------
September 30, 2002 4.75:1
- ------------------------------------------------- -----------------------
December 31, 2002 4.75:1
- ------------------------------------------------- -----------------------
March 31, 2003 4.25:1
- ------------------------------------------------- -----------------------
June 30, 2003 3.75:1
- ------------------------------------------------- -----------------------
September 30, 2003 3.75:1
- ------------------------------------------------- -----------------------
December 31, 2003 3.50:1
- ------------------------------------------------- -----------------------
March 31, 2004 3.00:1
- ------------------------------------------------- -----------------------
June 30, 2004 3.00:1
- ------------------------------------------------- -----------------------
September 30, 2004 2.75:1
and each quarter date thereafter
- ------------------------------------------------- -----------------------
(c) prior to September 30, 2004, the Company will not permit
Consolidated Net Worth at any time to be less than (pound)400,000,000.
(d) on September 30, 2004 and thereafter, the Company will not
permit Consolidated Net Worth at any time to be less than the sum of
(i) the greater of (A) (pound)400,000,000 and (B) 80% of Consolidated
Net
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Worth as at September 30, 2004, plus (ii) on a cumulative basis, 50%
of positive "profits attributable to ordinary shareholders" (as
defined under GAAP) for each Fiscal Quarter beginning with the Fiscal
Quarter ended December 31, 2004.
(e) the Company will not permit the total Capital Expenditure of
all members of the Group in any Fiscal Year prior to the Put
Elimination Date to exceed the Budgeted Capital Expenditure for such
Fiscal Year but so that in respect of any Fiscal Year where the
relevant actual Capital Expenditure (less any amount which was carried
forward from the previous Fiscal Year) is less than the Budgeted
Capital Expenditure for that Fiscal Year, an amount equal to such
deficit may be carried over to the following Fiscal Year only (and not
otherwise or further) and shall be deemed to be spent before Budgeted
Capital Expenditure in that year.
Each of the financial covenants described in clauses (a) through (d) above
is to be tested quarterly on the basis of the Company's management accounts
and its annual audited consolidated financial statements. Consolidated
EBITDA and Consolidated Net Interest Expenditure shall be calculated on a
rolling twelve months basis and Consolidated Gross Borrowings shall be
calculated on the basis of the average daily outstandings during the most
recent two Fiscal Quarters.
10.3.2. Maintenance of Most Favored Lender Status.
(a) No Obligor shall enter into any modification or
amendment to any existing credit facility or other financing
document (including, without limitation, the Syndicated Loan
Agreement and any Committed Medium-Term Bank Facilities), or
enter into any new credit facility or financing document, that
contains financial covenants, definitions or default provisions
more favorable to the lender or financier thereunder unless the
Noteholders are given the option of receiving the benefit of such
more favorable provisions at the same time and on the same terms.
(b) No Obligor shall enter into any modification or
amendment to the Syndicated Loan Agreement that contains
covenants, definitions or provisions more favorable to the Banks
thereunder unless the holders of the Notes are given the option
of receiving the benefit of such more favorable provisions at the
same time and on the same terms; or
(c) Neither the Company nor any of its Subsidiaries shall
provide any additional guarantees to the Banks or any other
creditor of
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the Company, the Issuer or any Subsidiary Guarantor unless such
Person has become a Subsidiary Guarantor pursuant to Section
9.3.5.
10.3.3. Merger, Consolidation, Amalgamation, etc.
The Company will not and will not permit any of its Subsidiaries to
consolidate, amalgamate or merge with any other corporation or convey,
transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person except:
(a) a Subsidiary (other than the Issuer) may consolidate,
amalgamate or merge with any other corporation or convey or transfer
all or substantially all of its assets to
(i) the Company, provided that the Company shall be the
continuing, surviving or acquiring corporation (the "surviving
corporation"), or a then existing Wholly-Owned Subsidiary, or
(ii) any other Person, provided that (x) if such Subsidiary
is a Subsidiary Guarantor and it is not the surviving
corporation, the surviving corporation shall be a solvent
corporation and shall have (1) executed and delivered to each
holder of a Note its assumption of the due and punctual
performance and observance of all obligations of such Subsidiary
under its Subsidiary Guarantee and (2) caused to be delivered to
each holder of a Note an opinion of counsel reasonably
satisfactory to the Majority Holders to the effect that all
agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the
terms of this Agreement and such Subsidiary Guarantee, and (y)
immediately after giving effect to such transaction, no Default
or Event of Default (including without limitation under Section
10.1.4 and Section 10.2.3 in case such transaction involves an
Asset Disposition) shall have occurred and be continuing;
(b) the Issuer may consolidate, amalgamate or merge with any
other corporation or convey or transfer all or substantially all of
its assets to a corporation organized and existing under the laws of
the United States or any State thereof (including the District of
Columbia), provided that
(i) the surviving corporation (if not the Issuer) shall have
(x) executed and delivered to each holder of a Note its
assumption of the due and punctual performance and observance of
all obligations of the Issuer under this Agreement,
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the Other Agreements and the Notes and (y) caused to be delivered
to each holder of a Note an opinion of counsel reasonably
satisfactory to the Majority Holders to the effect that all
agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the
terms of this Agreement, and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing; and
(c) the Company may consolidate, amalgamate or merge with any
other corporation or convey or transfer all or substantially all of
its assets to a corporation organized and existing under the laws of
England and Wales, the United States or any State thereof (including
the District of Columbia) or any other Permitted Jurisdiction,
provided that
(i) the surviving corporation (if not the Company) shall
have (x) executed and delivered to each holder of a Note its
assumption of the due and punctual performance and observance of
all obligations of the Company under this Agreement and the Other
Agreements and (y) caused to be delivered to each holder of a
Note an opinion of counsel reasonably satisfactory to the
Majority Holders to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with
their terms and comply with the terms of this Agreement, and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing.
No such conveyance, transfer or lease of substantially all of the assets of
the Issuer or the Company shall have the effect of releasing the Issuer or
the Company or any successor corporation that shall theretofore have become
such in the manner prescribed in this Section 10.3.3 from its liability
under this Agreement or (in the case of the Issuer) the Notes.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) default in the payment of any principal or Make-Whole Amount, if
any, on any Note when the same becomes due and payable, whether at
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maturity or at a date fixed for prepayment or by declaration or otherwise,
unless such default is the direct result of a technical failure by the
transmitting bank in transmission of payment on no more than two occasions
as long as the Notes are outstanding, in which case the Issuer shall have
two Business Days to remedy such default; or
(b) default in the payment of any interest on any Note for more than
five Business Days after the same shall become due and payable; or
(c) default in the performance of or compliance with any term
contained in Section 7.1(d)(xi), Section 7.2.1(e), or Section 10 (other
than Section 10.2.4); or
(d) default:
(i) prior to the Put Elimination Date in (A) the performance of
or compliance with any other term contained in clauses (i), (ii) and
(iv) of Section 7.1(d) and such default is not remedied within 5
Business Days, (A) the performance of or compliance with any other
term contained in Section 7.1 and such default is not remedied within
10 Business Days, or (B) the performance of or compliance with any
other covenant, agreement or condition contained herein and such
default is not remedied within 10 Business Days, in each case after
the earlier of (1) a Responsible Officer of the Issuer or the Company
obtaining actual knowledge of such default and (2) the Issuer or the
Company receiving written notice of such default from any holder of a
Note; or
(ii) on or after the Put Elimination Date in the performance of
or compliance with any other covenant, agreement or condition
contained herein and such default is not remedied within 30 Business
Days, in each case after the earlier of (1) a Responsible Officer of
the Issuer or the Company obtaining actual knowledge of such default
and (2) the Issuer or the Company receiving written notice of such
default from any holder of a Note; or
(e) any representation or warranty made in writing by or on behalf of
the Issuer, the Company or a Subsidiary Guarantor or by any officer of the
Issuer, the Company or a Subsidiary Guarantor in this Agreement or a
Subsidiary Guarantee or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in
any material respect on the date as of which made; or
(f) (i) prior to the Put Elimination Date any Borrowed Money of any
member of the Group (whether constituting principal, premium, make-whole
amount or interest) is not paid when due (or within any applicable grace
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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 (as principal or as guarantor or other surety) 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 collateralization
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 member of the Group
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,
(ii) any "Event of Default" (as defined in the Syndicated Loan Agreement)
under the Syndicated Loan Agreement regardless of any waiver thereunder, or
(iii) a refusal for a period of more than 7 Business Days by the Banks
under the Syndicated Loan Agreement or the relevant banks under any
Committed Medium-Term Bank Facilities to fund any advance requested by the
Company or any other borrower under the Syndicated Loan Agreement or such
Committed Medium-Term Bank Facilities (as the case may be), or (iv) the
Issuer, the Company or any Subsidiary Guarantor or other Material
Subsidiary is in default in the performance of or compliance with any term
of any evidence of any Borrowed Money (other than the Notes) that is
outstanding in an aggregate principal amount of at least (pound)10,000,000
(or its equivalent in any other currency) or of any mortgage, indenture or
other agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Borrowed Money has become, or
has been declared (or one or more Persons are entitled to declare such
Borrowed Money to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or (v) as a consequence of the
occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Borrowed Money (other than
the Notes) that is outstanding in an aggregate principal amount of at least
(pound)10,000,000 (or its equivalent in any other currency) to convert such
Borrowed Money into equity interests), the Issuer, the Company or any
Subsidiary Guarantor or other Material Subsidiary has become obligated to
purchase or repay any such Borrowed Money (or one or more Persons are
entitled to require such purchase or repayment) before its regular maturity
or before its regularly scheduled dates of payment; or
(g) (i) prior to the Put Elimination Date, 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
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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 five Business 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 (ii) on and after the Put Elimination Date, any
member of the Group fails to make payment in relation to a Derivatives
Contract of any sum equal to or greater than (pound)10,000,000 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 five
Business 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)10,000,000 (or its equivalent in the relevant currency); or
(h) the Issuer, the Company or any Subsidiary Guarantor or other
Material Subsidiary (i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii)
makes an assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
takes corporate action for the purpose of any of the foregoing; or
(i) (i) prior to the Put Elimination Date, an encumbrancer takes
possession of all or a substantial part of the assets or undertakings of
the Issuer, the Company or any Subsidiary Guarantor or other Material
Subsidiary and any such action is not discharged within 14 days, (ii) on
and after the Put Elimination Date, an encumbrancer takes possession of all
or a substantial part of the assets or undertakings of the Issuer, the
Company or any Subsidiary Guarantor or other Material Subsidiary and any
such action is not discharged within 60 days, (iii) prior to the Put
Elimination Date, a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Issuer, the
Company or any Subsidiary Guarantor or other Material Subsidiary, a
custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any
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substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of the Issuer, the Company or any such Subsidiary Guarantor
or other Material Subsidiary, or any such petition shall be filed against
the Issuer, the Company or any such Subsidiary Guarantor or other Material
Subsidiary and such petition shall not be dismissed within 14 days, or (iv)
on and after the Put Elimination Date, a court or governmental authority of
competent jurisdiction enters an order appointing, without consent by the
Issuer, the Company or any Subsidiary Guarantor or other Material
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Issuer, the Company or any such Subsidiary Guarantor or other Material
Subsidiary, or any such petition shall be filed against the Issuer, the
Company or any such Subsidiary Guarantor or other Material Subsidiary and
such petition shall not be dismissed within 60 days; or
(j) any kind of composition, scheme of arrangement, compromise or
other similar arrangement in respect of the Issuer, the Company or any
Subsidiary Guarantor or other Material Subsidiary and its respective
creditors generally (or any class of creditors) is entered into or made
other than an agreement under section 425 of The Companies Act 1985, as
amended, for the purposes of a solvent merger or amalgamation of any such
Material Subsidiary); or
(k) any event occurs with respect to the Issuer, the Company, a
Subsidiary Guarantor or a Material Subsidiary which under the laws of any
jurisdiction is analogous to any of the events described in paragraph (h),
(i) or (j) above, provided that the applicable grace period, if any, which
shall apply shall be the one applicable to the relevant proceeding which
most closely corresponds to the proceeding described in paragraph (h), (i)
or (j) above; or
(l) (i) prior to the Put Elimination Date, a final judgment or
judgments for the payment of money are rendered against any Obligor or
Material Subsidiary which judgments in each case are not, within 14 days
after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 14 days after the expiration of such stay, (ii) prior
to the Put Elimination Date a final judgment or judgments for the payment
of money aggregating in excess of (pound)10,000,000 (or its equivalent in
the relevant currency of payment) are rendered against one or more of the
Company and
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its Subsidiaries which judgments in each case are not, within 14 days after
entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 14 days after the expiration of such stay, or (iii) on
and after the Put Elimination Date a final judgment or judgments for the
payment of money aggregating in excess of (pound)10,000,000 (or its
equivalent in the relevant currency of payment) are rendered against one or
more of the Company and its Subsidiaries which judgments in each case are
not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the expiration
of such stay; or
(m) (i) prior to the Put Elimination Date, the Parent Guarantee or any
Subsidiary Guarantee or any Security Document shall cease to be in full
force and effect as an enforceable instrument and, in the case of a
Subsidiary Guarantee, the related Subsidiary Guarantor shall not have
executed and delivered a new, valid guarantee, or the Company, the Issuer
or any Subsidiary Guarantor (or any Person at their authorized direction or
on their behalf) shall assert in writing that the Parent Guarantee, any
Security Document or any Subsidiary Guarantee of such Subsidiary is
unenforceable or invalid in any material respect, or (ii) on and after the
Put Elimination Date, the Parent Guarantee or any Subsidiary Guarantee or
any Security Document shall cease to be in full force and effect as an
enforceable instrument and, in the case of a Subsidiary Guarantee, the
related Subsidiary Guarantor shall not have executed and delivered a new,
valid guarantee within 30 days after a Responsible Officer of the Company
obtains knowledge thereof, or the Company, the Issuer or any Subsidiary
Guarantor (or any Person at their authorized direction or on their behalf)
shall assert in writing that the Parent Guarantee, any Security Document or
any Subsidiary Guarantee of such Subsidiary is unenforceable or invalid in
any material respect; or
(n) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $2,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any
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Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be expected
to have a Material Adverse Effect; or
(o) prior to the Put Elimination Date, 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 as permitted
under this Agreement or (ii) with the written consent of the Majority
Holders; or
(p) prior to the Put Elimination Date, 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 Majority Holders; or
(q) prior to the Put Elimination Date, 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.
As used in Section 11(n), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Issuer or the Company
described in paragraph (h), (i), (j) or (k) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (h) or described in
clause (vi) of paragraph (h) by virtue of the fact that such clause
encompasses clause (i) of paragraph (h)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Majority Holders may at any time at its or their option, by notice or
notices to the Issuer, declare all the Notes then outstanding to be
immediately due and payable.
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(c) If any Event of Default described in paragraph (a) and (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes
then outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Issuer, declare all the Notes
held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Issuer and the
Company acknowledge, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the
Issuer (except as herein specifically provided) and that the provision for
payment of a Make-Whole Amount by the Issuer in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable pursuant to
paragraph (b) and (c) of Section 12.1, the Required Holders, by written notice
to the Issuer, may rescind and annul any such declaration and its consequences
if (a) the Issuer has paid all overdue interest on the Notes, all principal of
and Make-Whole Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than the non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 19, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under
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this Section 12.3 will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Issuer and the Company under Section 17,
the Issuer will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including without
limitation reasonable attorneys' fees, expenses and disbursements.
13. PARENT GUARANTEE
13.1. Guarantee.
(a) Guaranteed Obligations. The Parent hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety,
(i) the punctual payment when due, whether at stated maturity, by
prepayment, by acceleration or otherwise, of all obligations of the
Issuer arising under this Agreement and the Notes, whether for
principal, interest (including without limitation interest on any
overdue principal, Make-Whole Amount, PIK Management Fees, Deferred
Make-Whole Interest, Change of Control Fees, and interest at the rate
specified in the Agreement and interest accruing or becoming owing
both prior to and subsequent to the commencement of any bankruptcy,
reorganization or similar proceeding involving either the Issuer or
the Company), Make-Whole Amount, fees, expenses, indemnification or
otherwise, and
(ii) the due and punctual performance and observance by the
Issuer of all covenants, agreements and conditions on its part to be
performed and observed under this Agreement and the Notes.
The obligations guaranteed by this Parent Guarantee are sometimes called the
"Guaranteed Obligations".
Without limiting the generality of the foregoing, this Parent Guarantee
guarantees, to the extent provided herein, the payment of all amounts which
constitute part of the Guaranteed Obligations and would be owed by any other
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Person to any holder of a Note but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Person.
(b) Guarantee Absolute. This Parent Guarantee constitutes a present
and continuing guarantee of payment and not of collection and the Parent
guarantees that the Guaranteed Obligations will be paid and performed
strictly in accordance with the terms of this Agreement and the Notes,
regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any holder of
a Note with respect thereto. The obligations of the Parent under this
Parent Guarantee are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Parent
to enforce this Parent Guarantee, irrespective of whether any action is
brought against the Issuer or any other Person liable for the Guaranteed
Obligations or whether the Issuer or any other such Person is joined in any
such action or actions. The liability of the Parent under this Parent
Guarantee shall be primary, absolute, irrevocable, and unconditional
irrespective of:
(i) any lack of validity or enforceability of any Guaranteed
Obligation, this Agreement the Notes or any agreement or instrument
relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from this
Agreement the Notes or this Parent Guarantee;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure by the Parent or other Person liable, or any
other guarantee, for all or any of the Guaranteed Obligations;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any collateral or any other assets of the
Issuer or any other Subsidiary;
(v) any change, restructuring or termination of the corporate
structure or existence of the Issuer or any other Subsidiary; or
(vi) any other circumstance (including without limitation any
statute of limitations) that might otherwise constitute a defense,
offset or counterclaim available to, or a discharge of, the Issuer or
the Parent.
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This Parent Guarantee shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by any holder of a Note or any other
Person upon the insolvency, bankruptcy or reorganization of the Issuer or
otherwise, all as though such payment had not been made.
(c) Waivers by the Parent. The Parent hereby irrevocably waives, to
the extent permitted by applicable law:
(i) promptness, diligence, presentment, notice of acceptance and
any other notice with respect to any of the Guaranteed Obligations and
this Parent Guarantee;
(ii) any requirement that any holder of a Note or any other
Person protect, secure, perfect or insure any Encumbrance or any
property subject thereto or exhaust any right or take any action
against the Issuer or any other Person or any collateral;
(iii) any defense, offset or counterclaim arising by reason of
any claim or defense based upon any action by any holder of a Note;
(iv) any duty on the part of any holder of a Note to disclose to
the Parent any matter, fact or thing relating to the business,
operation or condition of any Person and its assets now known or
hereafter known by such holder; and
(v) any rights by which it might be entitled to require suit on
an accrued right of action in respect of any of the Guaranteed
Obligations or require suit against the Issuer or the Parent or any
other Person.
13.2. Subrogation and Contribution.
The Parent shall not assert, enforce, or otherwise exercise (a) any right
of subrogation to any of the rights, remedies, powers, privileges or
Encumbrances of any holder of a Note or any other beneficiary against the Issuer
or any other obligor on the Guaranteed Obligations or any collateral or other
security, or (b) any right of recourse, reimbursement, contribution,
indemnification, or similar right against the Issuer, and the Parent hereby
waives any and all of the foregoing rights, remedies, powers, privileges and the
benefit of, and any right to participate in, any collateral or other security
given to any holder of a Note or any other beneficiary to secure payment of the
Guaranteed Obligations, until such time as the Guaranteed Obligations have been
indefeasibly paid in full.
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14. TAX INDEMNIFICATION.
All payments whatsoever under the Parent Guarantee will be made by the
Company in lawful currency of the United States of America free and clear of,
and without liability or withholding or deduction for or on account of, any
present or future Taxes of whatever nature imposed or levied by or on behalf of
any jurisdiction other than the United States (or any political subdivision or
taxing authority of or in such jurisdiction) (hereinafter a "Taxing
Jurisdiction"), unless the withholding or deduction of such Tax is compelled by
law.
If any deduction or withholding for any Tax of a Taxing Jurisdiction shall
at any time be required in respect of any amounts to be paid by the Company
under the Parent Guarantee, the Company will pay such additional amounts as may
be necessary in order that the net amounts paid to each holder pursuant to the
terms of the Parent Guarantee after such deduction or withholding (including
without limitation any required deduction or withholding of Tax on or with
respect to such additional amount), shall equal the amounts then due and payable
under the terms of the Parent Guarantee, provided that no payment of any
additional amounts shall be required to be made for or on account of:
(a) any Tax that would not have been imposed but for the existence of
any present or former connection between such holder (or between a
fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of
a power over, such holder, if such holder is an estate, trust, partnership
or corporation or any Person other than the holder to whom the Parent
Guarantee or any amount payable thereon is attributable for the purposes of
such Tax) and the Taxing Jurisdiction, other than the mere holding of the
Parent Guarantee or the receipt of payments thereunder, including without
limitation such holder (or such other Person described in the above
parenthetical) being or having been a citizen or resident thereof, or being
or having been engaged in a trade or business therein or having an
establishment office, fixed base or branch therein, provided that this
exclusion shall not apply with respect to a Tax that would not have been
imposed but for the Company, after the Effective Date, opening an office
in, moving an office to, reincorporating in, or changing the Taxing
Jurisdiction from or through which payments on account of the Parent
Guarantee are made to, the Taxing Jurisdiction imposing the relevant Tax;
(b) any Tax that would not have been imposed but for the failure of
such holder to qualify as a resident of the United States for purposes of a
tax treaty between the United States and the Taxing Jurisdiction or the
failure of such holder to comply with any reporting or filing requirement
under such tax treaty (unless such failure to comply (i) is attributable
solely to the failure of the Company to provide notice or copies of any
Form (as defined below) in
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accordance with the procedures described in the immediately succeeding
paragraph or (ii) occurs notwithstanding compliance by such holder with
such procedures);
(c) any Taxes on such holder's net income or net profits;
(d) any Tax which is payable otherwise than by deduction or
withholding from payments made under or with respect to the Parent
Guarantee;
(e) any estate, inheritance, gift, sales, transfer, personal property
or similar Tax; or
(f) any combination of clauses (a) through (e) above;
provided further that no such additional amounts shall be payable in respect of
the Parent Guarantee held by (x) any holder who is a fiduciary or a partnership
or a beneficial owner who is other than the sole beneficial owner of such
payment to the extent a beneficiary or settlor with respect to such fiduciary or
a member of such partnership or a beneficial owner would not have been entitled
to such additional amounts had it been the holder of the Parent Guarantee or (y)
any holder who is not a resident of the United States or with respect to any
payment all or any part of which represents income which is not subject to
United States tax as income of a resident of the United States.
By acceptance of any Note, the holder of such Note agrees to assist the
Company in complying with administrative requirements imposed by any
Governmental Authority in a Taxing Jurisdiction in connection with applicable
law of such Taxing Jurisdiction, including without limitation an applicable tax
treaty, it being agreed as between the holders of the Parent Guarantee and the
Company that compliance with any such administrative requirements shall be the
sole responsibility of the Company. In furtherance of the foregoing, by such
acceptance, each such holder agrees that it will from time to time with
reasonable promptness (x) duly complete and deliver to or as reasonably directed
by the Company all such forms, certificates, documents and returns provided to
such holder by the Company (collectively "Forms") required to be filed by or on
behalf of such holder in order to avoid or reduce any such Tax pursuant to the
provisions of an applicable statute, regulation or administrative practice of
the relevant Taxing Jurisdiction or of a tax treaty between the United States
and such Taxing Jurisdiction and (y) provide the Company with such information
with respect to such holder as the Company may reasonably request in order to
complete any such Forms, provided that nothing in this Section 14 shall require
any holder to provide information with respect to any such Form if in the
opinion of such holder such Form would involve the disclosure of tax return or
other information that is confidential or proprietary to such holder, and
provided further that, except as described below in respect of the transfer of
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any Note, each such holder shall be deemed to have complied with its obligation
under this paragraph with respect to any Form if such Form shall have been duly
completed and delivered by such holder to the Company or mailed to the
appropriate taxing authority within 60 days following a written request of the
Company (which request shall be accompanied by copies of such Form). On or
before the Effective Date the Company will furnish each Noteholder with copies
of United Kingdom Inland Revenue Form FD-13 (the appropriate Form currently
required to be filed in the United Kingdom pursuant to clause (b) of the first
paragraph of this Section 14), and in connection with the transfer of any Note
the Company will furnish the transferee of such Note with copies of all Forms
then required. For the avoidance of doubt, each Noteholder acknowledges that the
information required to be provided in the current version of United Kingdom
Inland Revenue Form FD-13 does not involve the disclosure of tax return or other
information that is confidential or proprietary to any Noteholder.
The Company will furnish the holders of Notes, within the period of payment
permitted by applicable law, an official receipt, if any, issued by the relevant
taxation or other authorities involved for all amounts deducted or withheld as
aforesaid.
15. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
15.1. Registration of Notes.
The Issuer shall keep at its principal executive office a register for the
registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Issuer shall not be affected by any
notice or knowledge to the contrary. The Issuer shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
15.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the Issuer
for registration of transfer or exchange (and in the case of a surrender for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or such holder's attorney duly
authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), within ten Business Days thereafter
the Issuer shall execute and deliver, at the Issuer's expense (except as
provided below), one or more new Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal
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amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request. Each such
new Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. The Issuer may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred or registered in
denominations of less than $500,000 or any integral multiple of $10,000 in
excess thereof, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000 or such integral multiple. Unless any
transferee specifies to the contrary prior to the registration of such transfer,
such transferee, by its acceptance of a Note registered in its name (or the name
of its nominee), shall be deemed to have made the representation set forth in
paragraph (a), (c) , (d) or (e) of Section 6.2; and no transfer under any other
circumstances shall be effected unless and until the transferee has made a
representation to the Issuer substantially identical to that set forth in
Section 6.2(b) (in respect of which the Issuer agrees to respond within five
Business Days) or provided other assurances satisfactory to the Issuer that such
transfer would not involve a prohibited transaction (as such term is defined in
section 406(a) of ERISA and section 4975(c)(1)(A)-(D) of the Code). The
Noteholders shall not be liable for any damages in connection with any such
representation or assurances provided to the Issuer by any transferee.
15.3. Replacement of Notes.
Upon receipt by the Issuer of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft, destruction or
mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
nominee for, an original Noteholder or any other Institutional Investor,
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
within ten Business Days thereafter the Issuer at its own expense shall execute
and deliver, in lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
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16. PAYMENTS ON NOTES.
16.1. Place of Payment.
Subject to Section 16.2, payments of principal, Make-Whole Amount, if any,
and interest becoming due and payable on the Notes shall be made at the
principal office of Citibank, N.A. in New York City. The Issuer may at any time,
by notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the Issuer
in the United States or the principal office of a bank or trust company in the
United States.
16.2. Home Office Payment.
So long as any Noteholder or its nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 16.1 or in such Note to the
contrary, the Issuer will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below such Noteholder's name in Schedule A, or by
such other method or at such other address as such Noteholder shall have from
time to time specified to the Issuer in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Issuer made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Noteholder shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Issuer at its principal executive office or at the
place of payment most recently designated by the Issuer pursuant to Section
16.1. Prior to any sale or other disposition of any Note held by such Noteholder
or its nominee such Noteholder will, at its election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Issuer in exchange for a new Note or
Notes pursuant to Section 15.2. The Issuer will afford the benefits of this
Section 16.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by such Noteholder under this Agreement and
that has made the same agreement relating to such Note as such Noteholder has
made in this Section 16.2.
17. EXPENSES, ETC.
17.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated, the
Issuer and the Company jointly and severally agree to pay all costs and expenses
(including reasonable attorneys' fees of special counsel and, if reasonably
required, local or other counsel) incurred by each Noteholder in connection with
such transactions and in connection with any amendments, waivers or consents
under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including without limitation:
(a) the costs and
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expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement, the Notes or any Subsidiary
Guarantee or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Notes or any
Subsidiary Guarantee, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Issuer, the Company or any Subsidiary
Guarantor or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Issuer and the Company
jointly and severally agree to pay, and jointly and severally agree to save each
Noteholder harmless from, all claims in respect of any fees, costs or expenses
if any, of brokers and finders (other than those retained by the Noteholders).
In furtherance of the foregoing, on the Effective Date the Issuer will pay
or cause to be paid the fees and disbursements and other charges (including
estimated unposted disbursements and other charges as of the Effective Date) of
Willkie Farr & Gallagher and Bingham Dana LLP, special counsel to the
Noteholders, which are reflected in the statement of such special counsel
submitted to the Issuer at least one Business Day prior to the Effective Date.
The Issuer will also pay, promptly upon receipt of supplemental statements
therefor, reasonable additional fees, if any, and disbursements and other
charges of such special counsel in connection with the transactions hereby
contemplated (including disbursements and other charges unposted as of the
Effective Date to the extent such disbursements and other charges exceed
estimated amounts paid as aforesaid).
17.2. Survival.
The obligations of the Issuer and the Company under this Section 17 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Notheholder of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of any
Noteholder or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Issuer or the
Company pursuant to this Agreement shall be deemed representations and
warranties of the Issuer or the Company under this Agreement. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the
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Noteholders and the Issuer and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.
19. AMENDMENT AND WAIVER.
19.1. Requirements.
This Agreement and the Notes may be amended, and the observance of any term
hereof or of the Notes may be waived (either retroactively or prospectively),
with (and only with) the written consent of the Issuer and the Company and the
Majority Holders, except that (a) no amendment or waiver of any of the
provisions of Sections 1, 2, 3, 4, 5, 6, 7.1, or 23, or any defined term (as it
is used therein), will be effective as to any Noteholder unless consented to by
such Noteholder in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest, Deferred Make-Whole Interest, PIK Management Fees, Change of Control
Fees or of the Make-Whole Amount on, the Notes, (ii) change the percentage of
the principal amount of the Notes the holders of which are required to consent
to any such amendment or waiver, or (iii) amend or waive any of Sections 8,
11(a), 11(b), 12, 13, 14, 19 or 22.
19.2. Solicitation of Holders of Notes.
(a) Solicitation. The Issuer and the Company will provide each holder
of the Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a decision
is required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Issuer and the
Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 19 to
each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. Neither the Issuer nor the Company will directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an inducement
to the entering into by any holder of Notes of any waiver or amendment of
any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each
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holder of Notes then outstanding even if such holder did not consent to
such waiver or amendment.
19.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 19 applies
equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Issuer and the Company without regard to whether
such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Issuer or the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
19.4. Notes held by the Issuer, etc.
Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Issuer, the Company or
any of their respective Affiliates shall be deemed not to be outstanding.
20. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(a) if to any Noteholder or its nominee, to such Noteholder or it at
the address specified for such communications in Schedule A, or at such
other address as such Noteholder or it shall have specified to the Issuer
and the Company in writing,
(b) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Issuer and the Company in
writing,
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(c) if to the Issuer, to the Issuer at 498 Seventh Avenue, New York,
NY 10018, to the attention of The Secretary, or at such other address as
the Issuer shall have specified to the holder of each Note in writing, or
(d) if to the Company, to the Company at 121-141 Westbourne Terrace,
London, W2 6JR, England, to the attention of Group Treasurer, or at such
other address as the Company shall have specified to the holder of each
Note in writing.
(e) Notices under this Section 20 will be deemed given only when
actually received.
21. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Noteholders on the Effective Date
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to the Noteholders, may be
reproduced by the Noteholders by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and the Noteholders
may destroy any original document so reproduced. Each of the Issuer and the
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Noteholders in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 21 shall not prohibit the Issuer or the Company or any other holder of
Notes from contesting any such reproduction to the same extent that it could
contest the original, or from introducing evidence to demonstrate the inaccuracy
of any such reproduction.
22. CONFIDENTIAL INFORMATION.
For the purposes of this Section 22, "Confidential Information" means
information delivered to the Noteholders by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by the
Noteholders as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to any Noteholder prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by any Noteholder
or any person acting on its behalf, (c) otherwise becomes known to any
Noteholder other than through disclosure by the Company or any Subsidiary or (d)
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constitutes financial statements delivered to the Noteholders under Section 7
that are otherwise publicly available. Each Noteholder will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by it in good faith to protect confidential information of third parties
delivered to it, provided that such Noteholder may deliver or disclose
Confidential Information to (i) its directors, officers, trustees, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by its Notes and
whose duties require them to maintain the confidentiality of such information),
(ii) its financial advisors and other professional advisors who agree, or whose
duties require them, to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 22, (iii) any other
holder of any Note, (iv) any Institutional Investor to which such Noteholder
sells or offers to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 22), (v)
any Person from which such Noteholder offers to purchase any security of the
Issuer or the Company (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
22), (vi) any federal or state regulatory authority having jurisdiction over it,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about its investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such
Noteholder, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which such Noteholder is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Noteholder
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under its Notes and this Agreement. Each holder of a Note, by its acceptance of
a Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 22 as though it were a party to this Agreement. On
reasonable request by the Issuer or the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Issuer and the Company embodying the provisions of this
Section 22. Each Noteholder's obligations under this Section 22 will survive the
payment or transfer of any Note held by such Noteholder and the termination of
this Agreement.
23. SUBSTITUTION OF NOTEHOLDERS.
Each Noteholder shall have the right to substitute any one of its
Affiliates as the acquiror of the Notes that it has agreed to acquire hereunder,
by written notice to the Issuer and the Company, which notice shall be signed by
both such Noteholder and such Affiliate, shall contain such Affiliate's
agreement to be bound
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by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "Noteholder" is used in this Agreement
(other than in this Section 23), such word shall be deemed to refer to such
Affiliate in lieu of the original Noteholder. In the event that such Affiliate
is so substituted as a Noteholder hereunder and such Affiliate thereafter
transfers to the original Noteholder all of the Notes then held by such
Affiliate, upon receipt by the Issuer and the Company of notice of such
transfer, wherever the word "Noteholder" is used in this Agreement (other than
in this Section 23), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to the original Noteholder, and the original
Noteholder shall have all the rights of an original holder of the Notes under
this Agreement.
24. MISCELLANEOUS.
24.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including without limitation any subsequent
holder of a Note) whether so expressed or not.
24.2. Construction.
Each covenant contained herein shall be construed (absent express provision
to the contrary) as being independent of each other covenant contained herein,
so that compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant.
Where any provision herein refers to action to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.
24.3. Jurisdiction and Process; Waiver of Jury Trial; Judgment Currency.
(a) Each of the Issuer and the Company irrevocably submits to the
non-exclusive in personam jurisdiction of any New York State or federal
court sitting in the Borough of Manhattan, The City of New York, over any
suit, action or proceeding arising out of or relating to this Agreement or
the Notes. To the fullest extent permitted by applicable law, each of the
Issuer and the Company irrevocably waives and agrees not to assert, by way
of motion, as a defense or otherwise, any claim that it is not subject to
the in personam jurisdiction of any such court, any objection that it may
now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit,
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action or proceeding brought in any such court has been brought in an
inconvenient forum.
(b) Each of the Issuer and the Company agrees, to the fullest extent
permitted by applicable law, that a final judgment in any suit, action or
proceeding of the nature referred to in Section 24.3(a) brought in any such
court shall be conclusive and binding upon it subject to rights of appeal,
as the case may be, and may be enforced in the courts of the United States
of America or the State of New York (or any other courts to the
jurisdiction of which it is or may be subject) by a suit upon such
judgment.
(c) Each of the Issuer and the Company consents to process being
served in any suit, action or proceeding of the nature referred to in
Section 24.3(a) by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to it at its address specified
in Section 20 or at such other address of which the Noteholders shall then
have been notified pursuant to said Section or, in the case of the Company,
to the Issuer, as its agent for the purpose of accepting service of any
process in the United States. Each of the Issuer and the Company agrees
that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding
and (ii) shall, to the fullest extent permitted by applicable law, be taken
and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any
reputable commercial delivery service.
(d) Nothing in this Section 24.3 shall affect the right of any holder
of a Note to serve process in any manner permitted by law, or limit any
right that the holders of any of the Notes may have to bring proceedings
against the Issuer or the Company in the courts of any appropriate
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
(e) The Company hereby irrevocably appoints the Issuer to receive for
it, and on its behalf, service of process in the United States, and the
Issuer hereby accepts such appointment and the appointment of each
Subsidiary Guarantor from time to time delivering a Subsidiary Guarantee,
as provided in Section 10 of such Subsidiary Guarantee.
(f) EACH OF THE ISSUER, THE COMPANY AND EACH HOLDER OF A NOTE WAIVES
TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT,
THE OTHER AGREEMENTS, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH.
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(g) Any payment on account of an amount that is payable hereunder or
under the Notes by the Issuer or the Company in U.S. Dollars which is made
to or for the account of any holder of Notes in any other currency, whether
as a result of any judgment or order or the enforcement thereof or the
realization of any security or the liquidation of the Issuer or the
Company, shall constitute a discharge of the obligation of the Issuer or
the Company under this Agreement or the Notes only to the extent of the
amount of U.S. Dollars which such holder could purchase in the foreign
exchange markets in London, England, with the amount of such other currency
in accordance with normal banking procedures at the rate of exchange
prevailing on the London Banking Day following receipt of the payment first
referred to above. If the amount of U.S. Dollars that could be so purchased
is less than the amount of U.S. Dollars originally due to such holder, the
Issuer and the Company jointly and severally agree to the fullest extent
permitted by law, to indemnify and save harmless such holder from and
against all loss or damage arising out of or as a result of such
deficiency. This indemnity shall, to the fullest extent permitted by law,
constitute an obligation separate and independent from the other
obligations contained in this Agreement and the Notes, shall give rise to a
separate and independent cause of action, shall apply irrespective of any
indulgence granted by such holder from time to time and shall continue in
full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due hereunder or under the Notes or
under any judgment or order. As used herein the term "London Banking Day"
shall mean any day other than Saturday or Sunday or a day on which
commercial banks are required or authorized by law to be closed in London,
England.
24.4. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary notwithstanding
(but without limiting the requirement in Section 8.2 that notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount (if any) or interest on any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
24.5. Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.
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24.6. Accounting Terms.
Notwithstanding any changes in GAAP or the interpretation or application
thereof subsequent to December 31, 1999, all financial covenants herein
(including those contained in Section 10) shall be calculated in accordance with
(and compliance shall be determined solely by reference to) Fixed GAAP. In the
event that there should occur after December 31, 1999 any such changes in GAAP
or the interpretation or application thereof which would have a quantifiable
effect on the calculation of the financial covenants, the Company agrees to
provide to each holder of a Note, in addition to the financial information
described in Section 7, such supplemental financial information with respect to
the relevant accounting periods (calculated in accordance with Fixed GAAP)
affected by such changes as is reasonably necessary to allow the holders of
Notes to verify compliance with the financial covenants. All accounting terms
used herein which are not expressly defined in this Agreement have the meanings
respectively given to them in accordance with Fixed GAAP.
24.7. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one instrument.
Each counterpart may consist of a number of copies hereof, each signed by less
than all, but together signed by all, of the parties hereto.
24.8. Governing Law.
This Agreement and the Notes shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of New York excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
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If each of you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between each Noteholder, the Issuer and the Company.
Very truly yours,
CORDIANT FINANCE, INC.
By: /s/ Michael J. Kopsak
---------------------------------------
Name: Michael J. Kopsak
Title: Vice President
CORDIANT COMMUNICATIONS GROUP PLC
By: /s/ Andrew Boland
---------------------------------------
Name: Andrew Boland
Title: Deputy Finance Director
Signature Page to Cordiant amended and Restated Note Purchase Agreement
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Marie Fioramonti
- -----------------------------------
Name: Marie Fioramonti
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
By: Prudential Private Placement Investors, L.P., as Investmetn Advisor
By: Prudential Private Placement Investors, Inc., General Partner
By: /s/ Marie Fioramonti
- -----------------------------------
Name: Marie Fioramonti
Title: Vice President
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
By: /s/ Marie Fioramonti
- -----------------------------------
Name: Marie Fioramonti
Title: Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Marie Fioramonti
- -----------------------------------
Name: Marie Fioramonti
Title: Vice President
USG ANNUITY & LIFE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/ Fred C. Smith
- -----------------------------------
Name: Fred C. Smith
Title: Executive Vice President
EQUITABLE LIFE INSURANCE COMPANY OF IOWA
By: ING Investment Management LLC, as Agent
By: /s/ Fred C. Smith
- -----------------------------------
Name: Fred C. Smith
Title: Executive Vice President
Signature Page to Cordiant amended and Restated Note Purchase Agreement
GOLDEN AMERICAN LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/ Fred C. Smith
- -----------------------------------
Name: Fred C. Smith
Title: Executive Vice President
RELIASTER LIFE INSURANCE COMPANY
By: ING Investment Management LLC, as Agent
By: /s/ Fred C. Smith
- -----------------------------------
Name: Fred C. Smith
Title: Executive Vice President
HARTFORD LIFE INSURANCE COMPANY
By: Hartford Investment Services, Inc.
Its Agent and Attorney-in-Fact
By: /s/ Kurt H. Nyman
- -----------------------------------
Name: Kurt H. Nyman
Title: Vice President
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
By: Hartford Investment Services, Inc.
Its Agent and Attorney-in-Fact
By: /s/ Kurt H. Nyman
- -----------------------------------
Name: Kurt H. Nyman
Title: Vice President
MASSACHUSETTS MUTUAL INSURANCE COMPANY
By: David L. Babson & Company Inc., its Investment Adviser
By: /s/ Elizabeth A. Perenick
- -----------------------------------
Name: Elizabeth A. Perenick
Title: Managing Director
AMERICAN UNITED LIFE INSURANCE COMPANU
By: /s/ Christopher D. Pahlke
- -----------------------------------
Name: Christopher D. Pahlke
Title: Vice President
Signature Page to Cordiant amended and Restated Note Purchase Agreement
THE STATE LIFE INSURANCE COMPANY
By: /s/ Christoopher D. Pahlke
- ----------------------------------
Name: Christopher D. Pahlke
Title: Vice President
Signature Page to Cordiant amended and Restated Note Purchase Agreement
SCHEDULE A
This Schedule A shows the names and addresses of the Noteholders under the
foregoing Amended and Restated Note Purchase Agreement and the principal amounts
of Notes held by each.
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $56,062,000
(1) All payments on account of Notes shall be made by wire transfer of
immediately available funds for credit to:
Account No. 890-0304-391
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the name of the Company, PPN
21851# AA 0, a description of the Note: "7.61% Guaranteed Senior Notes
due April _, 2011 and whether payment is of principal, premium, or
interest) to identify the source and application of such funds.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
Attention: Manager, Investment Operations Group
Telephone: 973-802-5260
Fax: 973-802-8055
(3) Address for all other communications and notices:
Schedule A-1
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
180 N. Stetson Street - Suite 5600
Chicago, IL 60601
Attention: Managing Director
Telephone: 312-540-4233
Fax: 312-540-4222
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structuring and Pricing
973-367-7398 (Telephone)
973-802-9425 (Telecopy)
(5) Tax Identification No.: 22-1211670
Schedule A-2
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
HARTFORD LIFE INSURANCE COMPANY $5,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
before 12:00 noon (New York City time) by wire transfer of immediately
available funds for credit to:
A/C # 900-9-000200
for F/C/T G06641-CRC
JP Morgan Chase
New York, NY
10004 ABA No. 021-000-021
with sufficient information (including the name of the Company, PPN
21851# AA 0, a description of the Note: "7.61% Guaranteed Senior Notes
due 2011" and whether payment is of principal, premium, or interest) to
identify the source and application of such funds.
(2) Address for all notices relating to payments:
Hartford Investment Management Company
c/o Portfolio Support
PO Box 1744
Hartford, CT 06133-1744
Fax: 860-297-8875/8876
(3) Address for all other communications and notices:
Hartford Life Insurance Company
c/o Prudential Private Placement Investors, L.P.
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
973-802-8608 (Telephone)
973-624-6432 (Telecopy)
Attention: Mr. Albert Trank,
Senior Vice President
Telephone: 973-624-6432
Fax: 973-802-8608
Schedule A-3
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structuring and Pricing
973-367-7398 (Telephone)
973-802-9425 (Telecopy)
(5) Tax Identification No.: 06-0974148
Schedule A-4
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY $2,938,000
(1) All payments on account of Notes held by such Noteholder shall be made
before 12:00 noon (New York City time) by wire transfer of immediately
available funds for credit to:
Account No. 890-0340-754
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
Ref: Pruco Life of New Jersey Account
with sufficient information (including the name of the Company, PPN
21851# AA 0, a description of the Note: "7.61% Guaranteed Senior Notes
due 2011" and whether payment is of principal, premium, or interest) to
identify the source and application of such funds.
(2) Address for all notices relating to payments:
Pruco Life Insurance Company of New Jersey
c/o Investment Operations Group
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Manager, Trade Management Group
Telephone: 973-367-3141
Fax: 973-802-9425
(3) Address for all other communications and notices:
Pruco Life Insurance Company of New Jersey
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson St., Suite 5600
Chicago, IL 60601-6716
Attn: Managing Director
Telephone: 312-540-4233
Fax: 312-540-4222
Schedule A-5
(4) Recipient of telephonic prepayment notices:
Manager, Investment Structuring and Pricing
973-367-7398 (Telephone)
973-802-9425 (Telecopy)
(5) Tax Identification No.: 22-2426019
Schedule A-6
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
PRUCO LIFE INSURANCE COMPANY $1,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
before 12:00 noon (New York City time) by wire transfer of immediately
available funds for credit to:
Account No. 890-0304-421
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
Ref: Pruco Life of Arizona Account
With sufficient information (including the name of the Company, PPN
21851# AA 0, a description of the Note: "7.61% Guaranteed Senior Notes
2011" and whether payment is of principal, premium, or interest) to
identify the source and application of such funds.
(2) Address for all notices relating to payments:
Pruco Life Insurance Company
c/o Investment Operations Group
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
Attention: Manager, Trade Management Group
Telephone: 973-367-3141
Fax: 973-802-9425
(3) Address for all other communications and notices:
Pruco Life Insurance Company
c/o Prudential Capital Group
Two Prudential Plaza
180 North Stetson St., Suite 5600
Chicago, IL 60601-6716
Attn: Managing Director
Fax: 312-540-4222
(4) Recipient of telephonic prepayment notices:
Schedule A-7
Manager, Investment Structuring and Pricing
973-367-7398 (Telephone)
973-802-9425 (Telecopy)
(5) Tax Identification No.: 22-1944557
Schedule A-8
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
USG ANNUITY & LIFE COMPANY $24,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
by wire transfer of immediately available funds for credit to:
The Bank of New York
ABA #021000018
BNF: IOC566 - Income Collections
Attn: William Cashman
Re: USG Annuity & Life Company -
Account # 368520
Reference: 21851# AA 0
Each such wire transfer shall set forth the name of the Corporation,
the full title (including the Coupon rate, issuance date, and final
maturity date) of the Notes on account of which such payment is made, a
reference to the PPN, and the due date and application (as among
principal, premium and interest) of the payment being made.
(2) Address for all notices relating to payments:
ING Investment Management LLC
5780 Powers Ferry Road, NW,
Suite 300
Atlanta, Georgia 30327-4349
Attention: Securities Accounting
Fax: (770) 690-4899
(3) Address for all other communications and notices:
ING Investment Management LLC
100 Washington Avenue South
Minneapolis, MN 55401
Attn: Gary Jacobson
Phone: 612-372 5200
Fax: 612-372-3561
with copy to:
Schedule A-9
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Phone: 770-690-4857
Fax: 770-690-4899
(4) Tax Identification No: 73-0663836
Schedule A-10
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
EQUITABLE LIFE INSURANCE COMPANY OF IOWA $12,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
by wire transfer of immediately available funds for credit to:
The Bank of New York
ABA #021000018
BNF: IOC566 - Income Collections
Attn: William Cashman
Re: Equitable Life Insurance Company of Iowa - Account # 068071
Reference: 21851# AA 0
Each such wire transfer shall set forth the name of the Corporation,
the full title (including the Coupon rate, issuance date, and final
maturity date) of the Notes on account of which such payment is made,
a reference to the PPN, and the due date and application (as among
principal, premium and interest) of the payment being made.
(2) Address for all notices relating to payments:
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Securities Accounting
Fax: (770) 690-4899
(3) Address for all other communications and notices:
ING Investment Management LLC
100 Washington Avenue South
Minneapolis, MN 55401
Attn: Gary Jacobson
Phone: 612-372 5200
Fax: 612-372-3561
with copy to:
Schedule A-11
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Phone: 770-690-4857
Fax: 770-690-4899
(4) Tax Identification No: 42-0236150
Schedule A-12
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
GOLDEN AMERICAN LIFE INSURANCE COMPANY $12,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
by wire transfer of immediately available funds for credit to:
The Bank of New York
ABA #021000018
BNF: IOC566 - Income Collections
Attn: William Cashman
Re: Golden American Life Insurance Company
(MVA Acct.) - Account #136374
Reference: 21851# AA 0
Each such wire transfer shall set forth the name of the Corporation,
the full title (including the Coupon rate, issuance date, and final
maturity date) of the Notes on account of which such payment is made, a
reference to the PPN, and the due date and application (as among
principal, premium and interest) of the payment being made.
(2) Address for all notices relating to payments:
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Securities Accounting
Fax: (770) 690-4899
(3) Address for all other communications and notices:
ING Investment Management LLC
100 Washington Avenue South
Minneapolis, MN 55401
Attn: Gary Jacobson
Phone: 612-372 5200
Fax: 612-372-3561
with copy to:
Schedule A-13
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Phone: 770-690-4857
Fax: 770-690-4899
(4) Tax Identification No: 41-0991508
Schedule A-14
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
RELIASTAR LIFE INSURANCE COMPANY $12,000,000
(1) All payments on account of Notes held by such Noteholder shall be made
by wire transfer of immediately available funds for credit to:
BK OF NYC
IOC 566 - INST'L CUSTODY
Bank ABA #021000018
Acct. #187035
Acct. Name: ReliaStar Life Insurance Company
Ref: [21851# AA 0, Name, Maturity]
Each such wire transfer shall set forth the name of the Corporation,
the full title (including the Coupon rate, issuance date, and final
maturity date) of the Notes on account of which such payment is made, a
reference to the PPN, and the due date and application (as among
principal, premium and interest) of the payment being made.
(2) Address for all notices relating to payments:
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Attention: Securities Accounting
Fax: (770) 690-4899
(3) Address for all other communications and notices:
ING Investment Management LLC
100 Washington Avenue South
Minneapolis, MN 55401
Attn: Gary Jacobson
Phone: 612-372 5200
Fax: 612-372-3561
with copy to:
Schedule A-15
ING Investment Management LLC
5780 Powers Ferry Road, NW, Suite 300
Atlanta, Georgia 30327-4349
Phone: 770-690-4857
Fax: 770-690-4899
(4) Tax Identification No.: 41-0451140
Schedule A-16
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
HARTFORD LIFE INSURANCE COMPANY $10,000,000
$ 5,000,000
(1) All payments by wire transfer of immediately available funds to:
JP Morgan Chase
4 New York Plaza
New York, NY 10004
ABA No. 021000021
Chase NYC/Cust
A/C # 900-9-000200 for F/C/T - G06609-LCA ($10,000,000 Note) -
G06616-LSO ($5,000,000 Note)
Attn: Bond Interest/Principal-Cordiant Finance
PPN 21851# AA 0
Prin $_____________ Int $_______________
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06144-1744
Fax: 860-297-8875/8876
(3) Address for all other communications:
Hartford Investment Management Company
c/o Investment Department-Private Placements
P.O. Box 1744
Hartford, CT 06144-1744
Fax: 860-297-8884
(4) Tax Identification No.: 06-0974148
Schedule A-17
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY $10,000,000
(1) All payments by wire transfer of immediately available funds to:
JP Morgan Chase
4 New York Plaza
New York, NY 10004
ABA No. 021000021
Chase NYC/Cust
A/C # 900-9-000200 for F/C/T G06586-ITT
Attn: Bond Interest/Principal-Cordiant Finance
PPN 21851# AA 0
Prin $_____________ Int $_______________
with sufficient information to identify the source and application of
such funds.
(2) Address for all notices in respect of payment:
Hartford Investment Management Company
c/o Portfolio Support
P.O. Box 1744
Hartford, CT 06144-1744
Fax: 860-297-8875/8876
(3) Address for all other communications:
Hartford Investment Management Company
c/o Investment Department-Private Placements
P.O. Box 1744
Hartford, CT 06144-1744
Fax: 860-297-8884
(4) Tax Identification No.: 39-1052598
Schedule A-18
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $16,000,000
(1) All payments on account of the Notes shall be made by crediting in the
form of bank wire transfer of Federal or other immediately available
funds (identifying each payment as Cordiant Finance, Inc. interest and
principal) as follows:
Citibank, N.A.
111 Wall Street
New York, NY 10043
ABA No. 021000089
For MassMutual Long Term Pool
Account No. 4067-3488
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and
Collection Department of David L. Babson & Company Inc. at (413)
744-5104 or 413-744-5718
(2) All notices and communications to be addressed to:
Massachusetts Mutual Life Insurance Company
c/o David L. Babson & Company, Inc.
1500 Main Street Suite 800
Springfield, MA 01115
Attn: Securities Investment Division
(3) Notices with respect to payments and corporate actions to be addressed
as provided in clause (2) above:
Attention: Securities Custody and Collection
Department F 381
Telephone: (413) 226-1803 or (413) 226-1839
Routing Code: S431
Schedule A-19
(4) Tax Identification Number: 04-1590850
Schedule A-20
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY $4,000,000
(1) All payments on account of the Notes shall be made by crediting in the
form of bank wire transfer of Federal or other immediately available
funds (identifying each payment as Cordiant Finance, Inc. interest and
principal) as follows:
JP Morgan Chase
4 Chase MetroTech Center
ABA No. 021000021
For MassMutual Pension Management
Account No. 910-2594018
Re: Description of security, principal and interest split
With telephone advice of payment to the Securities Custody and
Collection Department of David L. Babson & Company Inc. at (413)
744-5104 or 413-744-5718
(2) All notices and communications to be addressed to:
Massachusetts Mutual Life Insurance Company
c/o David L. Babson & Company, Inc.
1500 Main Street
Springfield, MA 01115
Attn: Securities Investment Division
(3) Notices with respect to payments and corporate actions to be addressed
as provided in clause (2) above:
Attention: Securities Custody and Collection
Department F 381
Telephone: (413) 226-1803 or (413) 226-1839
Routing Code: S431
Schedule A-21
(4) Tax Identification Number: 04-1590850
Schedule A-22
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
AMERICAN UNITED LIFE INSURANCE COMPANY $4,500,000
(1) All payments by wire transfer of immediately available funds to:
Bank of New York
Attn: P&I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018
BF: IOC566
Payments should contain sufficient information to identify the
breakdown of principal and interest and should identify the full
description of the Notes and the payment date.
(2) Address all notices regarding payments and all other communications to:
American United Life Insurance Company
One American Square
Indianapolis, IN 46282
(3) Tax Identification Number: 35-0145825
Schedule A-23
Principal Amount of
Name and Address of Noteholder Notes Held
- ------------------------------ -------------------
THE STATE LIFE INSURANCE COMPANY $500,000
(1) All payments by wire transfer of immediately available funds to:
Bank of New York
Attn: P&I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018
BF: IOC566
State Life, c/o American United Life
Payments should contain sufficient information to identify the
breakdown of principal and interest and should identify the full
description of the Notes and the payment date.
(2) Address all notices regarding payments and all other communications to:
American United Life Insurance Company
One American Square
Indianapolis, IN 46282
(3) Tax Identification Number: 35-0684263
Schedule A-24
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Acquired Subsidiary Borrowed Money" means all Borrowed Money of any Person
which becomes a Subsidiary after the April 5, 2001 and which (a) is outstanding
on the date such Person becomes a Subsidiary (or such corporation is at the time
contractually bound, in writing, to incur such Borrowed Money) and (b) has not
been (or is not being) incurred, extended or renewed in contemplation of such
Person becoming a Subsidiary.
"Affiliate" means, at any time, (a) with respect to any Person (including
without limitation the Issuer or the Company), any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person, and (b) with
respect to the Issuer or the Company, any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Agreement in Principle" means the agreement dated March 28, 2002 made
between the Parent, the Issuer, the Noteholders and the Bank Finance Parties for
the purpose (inter alia) of agreeing the principal terms of the Restructuring
Transaction.
"Annual Budget" means in respect of each Fiscal Year of the Group, a budget
for such Fiscal Year (broken down on a monthly basis) the form (but not the
content) of which is in the agreed form as updated on a quarterly basis during
each relevant Fiscal Year.
"Asset Disposition" is defined in Section 10.2.3.
"Associated Person" means, in relation to any person, a person who is (i)
acting in concert (as defined in the City Code on Takeovers and Mergers (United
Kingdom)) with that person or (ii) a connected person (as defined in section 839
of the United Kingdom Income and Corporation Taxes Act 1988) of that person.
"Auditors" means KPMG Audit Plc or such other auditing firm of
international standing as may be approved by the board of directors of the
Company
Schedule B-1
(after prior consultation with the Noteholders) and which has agreed to
provide the Auditor's Reports.
"Auditors Report" means, in respect of any Fiscal Year, the report from the
Auditors delivered, or as the case may be, to be delivered under Section
7.1(d)(v) and Section 7.2.1(c)(B).
"Authority" is defined in Section 7.3.
"Bank Agent" means HSBC Investment Bank plc or such other person as may be
appoint for the Banks pursuant to the Syndicated Loan Agreement.
"Bank Arrangers" means collectively, The Bank of New York and HSBC
Investment Bank plc, together with their successors and assigns acting in such
capacity.
"Bank Control Payment Date" is defined in Section 8.9(c).
"Bank Credit Facility" means (a) each credit, loan or borrowing facility
(individually a "facility") identified as such in Schedule 5.15, and each
extension of such facility, and (b) any other facility (including any renewal or
extension of a then existing facility) entered into on or after April 5, 2001 by
the Company or any Subsidiary in a principal amount equal to or greater than
$20,000,000 (or the equivalent in any other currency, determined as of the date
of the financial closing of such credit facility based on the exchange rate of
such other currency for U.S. dollars), but excluding any such facility entered
into solely for cash management or similar purposes in the ordinary course of
business that provides a netting or cash pooling arrangement by and among the
Company and/or one or more Subsidiaries in respect of the Indebtedness under
such facility. If any such facility entered into after April 5, 2001 provides
for both a cash management netting arrangement as described above and other
Indebtedness not subject to netting arrangements, the determination of whether
such facility constitutes the Bank Credit Facility will be based solely upon
such other Indebtedness.
"Bank Documents" means the Agreement in Principle, the Restructuring Deed,
the Syndicated Loan Agreement, the letters entered into from time to time by the
Company setting out the terms of any fees to be paid by the Company to a Bank
Finance Party in connection with the providing of the facilities (including any
overdraft facility), the security documentation entered into in connection
therewith, and any other documents with the Common Security Trustee and the
Company agree shall be Bank Documents.
"Bank Finance Parties" means the Bank Agent, the Bank Arrangers, the Banks,
the Swingline Bank, the Overdraft Bank, the Security (Bank) Trustee and the
Common Security Trustee.
Schedule B-2
"Bank Refinancing Date" means the earlier of (a) November 8, 2004 or (b)
the date any refinancing or repayment in full of the Syndicated Loan Agreement
is consummated.
"Banks" means, collectively, the banks and financial institutions party to
the Syndicated Loan Agreement, together with their respective successors and
assigns.
"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, (ii) any amount raised pursuant to any note
purchase facility or the issue of bonds, notes, debentures, loan stock or any
similar instrument, (iii) any counter-indemnity obligation in respect of a
guarantee, indemnity, bond, standby or documentary letter of credit or any other
instrument issued by a bank or financial institution, (iv) acceptance or
documentary credit facilities, (v) receivables sold or discounted (otherwise
than on a non-recourse basis), (vi) 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 Permitted Acquisitions
or Permitted Investments and certain deferred consideration obligations listed
on Schedule 10.1.6, (vii) the capital element of Finance Leases and hire
purchase contracts, (viii) (except for the purposes of the definition of
"Consolidated Gross Borrowings") Derivatives Contracts, (ix) any preference or
other shares which are mandatorily redeemable or redeemable at the option of the
holder thereof (other than certain preference shares listed on Schedule 9.1.12),
(x) 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 (ix) above and (x) guarantees in respect of Indebtedness of any person
falling within any of (i) to (x) above.
"Bridge Debenture" means the composite guarantee and debenture dated April
5, 2002 between the Company, certain of the Company's Subsidiaries and HSBC
Investment Bank PLC as bridge security trustee.
"Bridge Loan Agreement" means the (pound)20,000,000 Loan Agreement dated
April 5, 2002 between the Company, the banks and financial institutions named
therein, The Bank of New York and HSBC Investment Bank PLC as bridge
Schedule B-3
arrangers, and HSBC Investment Bank PLC as bridge agent and bridge security
trustee.
"Budgeted Capital Expenditure" means Capital Expenditure incurred or to be
incurred in a Fiscal Year up to a maximum of:
- ------------------- -----------------
Fiscal Year ending Amount
- ------------------- -----------------
December 31, 2002 (pound)10,000,000
- ------------------- -----------------
December 31, 2003 (pound)17,500,000
- ------------------ -----------------
December 31, 2004 (pound)20,000,000
- ------------------ -----------------
"Business Day" means (a) for the purposes of Section 8.13 and the
definition of "Modified Make-Whole Amount" only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York City are required or
authorized to be closed, and (b) for the purposes of any other provision of this
Agreement, any day other than a Saturday, a Sunday or a day on which commercial
banks in New York City or London, England are required or authorized to be
closed.
"Capital Expenditure" means any expenditure which should be treated as
capital expenditure in the audited consolidated financial statements of the
Group in accordance with Fixed GAAP.
"Cash Pooling Agreements" means arrangements for the pooling of the
balances of any two or more Group member's bank accounts pursuant to which
arrangements any such member of the Group grants a guarantee, rights of set-off
or any other Encumbrance or transfers cash between the relevant bank accounts
pursuant to an intra-Group loan.
"Change of Control" shall occur if a person (whether alone or together with
any Associated Persons) becomes the beneficial owner of shares in the issued
share capital of the Company carrying the right to exercise more than 50% of the
votes exercisable at a general meeting of the Company or more than one-half in
nominal value of the equity share capital of the Company.
"Change of Control Amount" means, with respect to any preyament of any Note
upon a Change of Control, an amount equal to the excess, if any, of the Modified
Make-Whole Amount calculated over the Make-Whole Amount in respect thereof,
provided that the Change of Control Amount shall in no event be less than zero.
Schedule B-4
"Change of Control Fee" is defined in Section 8.9(d).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in
effect.
"Committed Medium-Term Bank Facilities" means loan or other credit
facilities (other than letter of credit or documentary credit facilities)
providing for revolving or term loans pursuant to a written commitment by a bank
or other financial institution for which the period until maturity or
termination of such commitment and the borrowings thereunder have, at the date
of determination, at least 364 days remaining and which are not capable of being
demanded or withdrawn at any time during such period (other than following an
event of default thereunder).
"Common Security Trust Deed" is defined in Section 2.4(b).
"Common Security Trustee" means HSBC Investment Bank plc in its capacity as
security trustee under the Security Agency and Priority Agreement and the
Security Documents, together with its successors and assigns in such capacity.
"Composite Guarantee" means the Composite Guarantee dated on or about the
Effective Date between the Company, certain of the Company's Subsidiaries and
the Common Security Trustee.
"Composite Guarantee and Debenture" means the Composite Guarantee and
Debenture dated on or about the Effective Date between the Company, certain of
the Company's Subsidiaries.
"Company" or "Parent" means Cordiant Communications Group plc (Registered
No. 1320869), whose registered office is at 121-141 Westbourne Terrace, London
W2 6JR.
"Compliance Certificate" means a certificate in form and substance
satisfactory to the Majority Holders delivered to the Noteholders in accordance
with Section 7.1(d)(iv) and Section 7.2.2.
"Confidential Information" is defined in Section 22.
"Consolidated EBITDA" means, in respect of any period, the consolidated
trading profits, but before:
(a) exceptional items and extraordinary items (each as separately
identified in the relevant profit and loss account);
(b) profits and losses on disposals of capital assets;
Schedule B-5
(c) amortisation of goodwill and other intangible assets;
(d) depreciation and impairment;
(e) Consolidated Gross Interest Expenditure and interest received or
receivable; and
(f) Taxes;
of the Group for such period and after taking into account the applicable share
of any profit or loss of any joint venture or other person which is not a
Subsidiary of the Company and after deducting (to the extent otherwise included)
profits (or adding back losses) attributable to minority interests in members of
the Group and after deducting (to the extent not otherwise deducted) Property
Payments.
"Consolidated Excess Cash Flow" means, in respect of any Fiscal Year the
Consolidated EBITDA of the Group for such period:
after the addition of (if not already added):
(a) cash dividends received from investments in joint ventures and
other persons which are not Subsidiaries of the Company (after Taxes);
(b) Tax rebates received in cash which the Group is entitled to
retain; and
(c) any other non-cash items expensed in arriving at Consolidated
EBITDA,
after the deduction of (if not already deducted):
(i) payments in respect of Capital Expenditure;
(ii) payments of cash exceptional and extraordinary items;
(iii) Group Taxes paid;
(iv) any other non-cash items credited in arriving at Consolidated
EBITDA,
(v) Consolidated Net Interest Expenditure;
(vi) all cash dividends paid by the Company and all cash dividends
paid in respect of minority interests in other members of the Group;
(vii) all repayments and prepayments of the Notes and all amounts
applied in repayment and cancellation of the facilities under the
Syndicated
Schedule B-6
Loan Agreement (where crediting cash to a cash collateral account pending
such application is deemed to be such an actual prepayment) except for
mandatory repayments or prepayments of the Notes or the facilities under
the Syndicated Loan Agreement in accordance with the terms of the
Syndicated Loan Agreement and/or this Agreement (as applicable) to the
extent that the proceeds from the relevant transaction which give rise to
such repayments or prepayments are excluded in determining Consolidated
EBITDA for the period;
(viii) the principal amount of rental payments in respect of Finance
Leases;
(ix) all cash consideration paid for acquisitions constituting
Permitted Acquisitions (including, without limitation, by way of earnouts
or deferred consideration); and
(x) all amounts paid in connection with employee share option schemes,
and excluding the applicable share of any loss or profit of any joint venture or
other person which is not a Subsidiary of the Company included in arriving at
Consolidated EBITDA,
in each case for, or paid during, such Fiscal Year and all calculated on a
consolidated basis.
"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:
(a) moneys owing by one member of the Group to another member of the
Group shall not be taken into account;
(b) to avoid double counting, no guarantee of a liability which is
already taken into account shall itself be taken into account;
(c) no liability shall be taken into account more than once in any
computation;
(d) 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 Company for the
conversion of such currency in accordance with the management policy of
converting such
Schedule B-7
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 Majority
Holders may determine or approve;
(e) 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;
(f) Indebtedness in respect of cash collateralized guarantees issued
by a Bank or any of its associates or any bank under any replacement
facility in respect thereof on behalf of the Group to media authorities
shall not be taken into account;
(g) Indebtedness of the Group in respect of the guarantees issued by
banks on behalf of the Group to media authorities in Korea and the United
Kingdom shall not be taken into account; and
(h) without duplication, debit balances at any bank or financial
institutions under the cash management arrangements of the Group shall be
taken into account net of the credit balances of the Group at such bank or
financial institution to the extent that such credit balances are subject
to contractual set-off against such debt balances (both before and after
insolvency) under such cash management arrangements.
"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 accrued 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 amortized 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 (including the "restructuring
fees" and "PIK management fees" (and interest thereon) referred to in, and
pursuant to the terms of, the Syndicated Loan Agreement and the PIK
Management Fees (as defined below)), to the extent relating to that period
Schedule B-8
when amortised over the term of the relevant Consolidated Gross
Borrowings); and
(ii) amounts discounted for FRS12 or SSAP24 purposes to the extent
they are non-cash items.
"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.
"Consolidated Net Worth" means, as of the date of any determination
thereof, the consolidated total capital and reserves of the Group based on the
balance sheet, as determined in accordance with Fixed GAAP, and as adjusted by
adding back any write off or amortization of acquisition goodwill and any
acquisition goodwill debited to a reserve.
"Control Event" means the occurrence of any one or more of the following:
(a) the announcement, by or on behalf of any person or Associated Person or
Associated Persons, in accordance with Rule 25 of the City Code on Takeovers and
Mergers (United Kingdom), of a firm intention to make an offer to the holders of
the ordinary shares of the Company or of a proposal for a scheme of arrangement,
which offer or proposal, if accepted or approved (as the case may be) by the
requisite number(s) of holders and if the other conditions thereto were
satisfied or waived, would result in a Change of Control or (b) the making of an
offer to the holders of the ordinary shares of the Company or the proposing of a
scheme of arrangement, which offer or proposal, if accepted or approved (as the
case may be) by the requisite number(s) of holders and if the other conditions
thereto were satisfied or waived, would result in a Change of Control (but, for
the avoidance of doubt, "Control Event" shall not include any preliminary
approach or negotiations by any person or group of persons to or with the
Company in respect of any such offer).
"Control Prepayment Date" is defined in Section 8.9(b).
"Control Response Date" is defined in Section 8.9(c).
"Default" means an event or condition the occurrence or existence of which
would, with the giving of notice or the lapse of time, or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) 9.61%
per annum and (ii) 2% above the rate of interest publicly announced by Citibank,
N.A. from time to time at its principal office in New York City as its base or
prime rate.
"Deferred Make-Whole Amount" is defined in Section 8.14(a).
Schedule B-9
"Deferred Make-Whole Interest" is defined in Section 8.14(b).
"Derivatives Contract" means a contract, agreement or transaction which is:
(k) 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
(l) any combination of such transactions,
in each case, whether on-exchange or otherwise.
"Designated non-U.S. Subsidiary" is defined in Section 5.4(a).
"Dollars" or "$" means the lawful currency of the United States.
"Effective Date" is defined in Section 3.
"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.
"ERISA Event" means 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 any plan 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 with respect to any plan, which upon the occurrence of
any of the events described in paragraphs (i) to (iv)
Schedule B-10
(inclusive) above would reasonably be expected to result in a material liability
of any member of the Group or any ERISA Affiliate.
"Existing Note Purchase Agreements" is defined in Section 1.1.
"Existing Notes" is defined in Section 1.1.
"Existing Parent Guarantee" is defined in Section 1.2.
"Existing Subsidiary Guarantors" is defined in Section 1.3.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"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, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section
414(b) and (c) of the Code.
"Euro-Zone" means each country that is a Participating Member State.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Existing Subsidiary Guarantees" is defined in Section 1.3.
"Facilities Group" means The Facilities Group Limited, a company
incorporated in England and Wales with registered number 00294029.
"Facilities Group Joint Venture Agreement" means the Joint Venture
Agreement dated December 11, 1997 between the Company and Publicis Group S.A.
relating to Facilities Group.
Schedule B-11
"Finance Documents" means, collectively, the Agreement in Principle, this
Agreement, the Notes, the Common Security Trust Deed, the Guarantees, the
Subsidiary Guarantor Consents, the Security Documents, and any and all other
agreements, documents and instruments relating thereto or hereto to which any
one or more of the Noteholders, any Obligor or any other Subsidiary is a
party.^^
"Finance Lease" means a lease treated as a finance lease pursuant to Fixed
GAAP (including, for the avoidance of doubt, SSAP 21).
"Financial Model" is defined in Section 4.14(a).
"Fiscal Half-Year" means, in respect of each Fiscal Year, each of the
periods (each comprising six successive months) ending on or about June 30 and
December 31.
"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.
"Fixed GAAP" means GAAP as applied to the Group's accounts for the Fiscal
Year ending December 31, 1999.
"Foreign Plan" means each plan that is maintained, sponsored or otherwise
contributed to by the Company or any Subsidiary and that provides retirement or
welfare benefits and is maintained outside the United States primarily for the
benefit of individuals substantially all of whom are or were "nonresident
aliens", as defined in section 7701(b) of the Code.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United Kingdom.
"Governmental Authority" means
(m) the government of
(i) the United States of America or any State thereof or the
United Kingdom or any other political subdivision of any thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(n) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
Schedule B-12
"Group" means the Company and its Subsidiaries from time to time and
"member of the Group" means any one of them.
"Group Structure Charts" means the charts, in the agreed form, which set
out the structure of the Group.
"Guaranteed Obligations" is defined in Section 13.1(a).
"Guarantees" is defined in Section 2.3 and includes the Composite Guarantee
and Debenture and the Composite Guarantee.
"Guarantor Group" means the Issuer, the Company and the Guarantors.
"Guarantors" is defined in Section 2.3.
"Guaranty" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such Person:
(o) to purchase such indebtedness or obligation or any property
constituting security therefor;
(p) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(q) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(r) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor
under any Guaranty, the indebtedness or other obligations that are the subject
of such Guaranty shall be assumed to be direct obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
Schedule B-13
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law (including
without limitation asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Hedging Strategy Letter" is defined in Section 4.11.
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
15.1. Unless the context otherwise requires, each holder of a Note shall also be
a holder of the Parent Guarantee for purposes of Sections 13 and 14.
"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 Package" means collectively, "The Information Disclosure for
Lenders" dated December 14, 2001, the financial report prepared by KPMG dated
January 2001 addressed to (among others) the Company and the Noteholders, the
Financial Model, the Group Structure Charts, the "Guarantor Group Revenue &
EBITDA Analysis (as at January 31, 2002) dated February 1, 2002, the "Earnout
Projections - 2002 to 2004 (as at December 31, 2001) dated February 4, 2002, the
"Customer Memorandum" dated January 31, 2002, and the presentation documentation
provided by the Company with its presentation on or about March 19, 2002.
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding (together with one or more of its Affiliates) more
than 10% of the aggregate principal amount of the Notes then outstanding), and
(c) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.
"Intellectual Property Rights" means any patent, trade mark, service mark,
registered design, trade name or copyright required to carry on the business of
any member of the Group.
"Intercreditor Agreement" means the intercreditor agreement entered into on
or about the Effective Date between, among others, the Obligors, the Noteholders
and the Bank Finance Parties.
"Majority Holders" means, at any time, the holders of at least a majority
in unpaid principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Issuer or any of its Affiliates).
Schedule B-14
"Make-Whole Amount" is defined in Section 8.13.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
"Material Adverse Effect" means a reference to any effect, event or
circumstance (on its own or in combination with other effect, events or
circumstances):
(a) which is, or is reasonably likely to be, materially adverse to (i)
the ability of any Obligor to perform any of its obligations under any of
the Finance Documents, or (ii) the business, assets or financial condition
of the Group taken as a whole; or
(b) which results in, or is reasonably likely to result in, any of the
Finance Documents not being legal, valid and binding on, and, enforceable
substantially in accordance with their terms, against any party thereto.
"Material Subsidiary" means:
(a) any member of the Group which is party to any Bank Documents or is
an Obligor; and
(b) any other Subsidiary of the Company:
(i) whose EBITDA, together with that of its Subsidiaries, is
equal to or exceeds 3 % of the Consolidated EBITDA of the Group (where
EBITDA shall be construed appropriately in respect of such member of
the Group by reference to the definition of EBITDA); or
(ii) whose gross revenues, together with those of its
Subsidiaries, is equal to or exceeds 3 % of the consolidated gross
revenues of the Group; or
(iii) to which has been transferred (whether by one transaction
or a series of transactions, related or not) all or substantially all
of the assets of another member of the Group which, immediately prior
to that transaction or any of the transactions in that series, was a
Material Subsidiary as determined under paragraphs (i) or (ii) above;
or
(iv) which is a holding company of a Material Subsidiary
determined under paragraphs (i) through (iii) above,
Schedule B-15
as determined by reference to the then latest quarterly management
accounts, the latest audited consolidated financial statements for the
time being of the Group delivered under this Agreement and such other
financial statements of the relevant members of the Group (prepared on
the same basis as such financial statements delivered in accordance
with this Agreement in respect of the same period to which such other
financial statements relate) as are necessary for the relevant
compliance certificate to be duly completed and delivered in
accordance with Section 7, provided that (1) in the case of a member
of the Group acquired after the end of the period to which the then
latest financial statements of the Group delivered pursuant to this
Agreement relate, the reference to such then latest financial
statements shall (until financial statements have been delivered under
such clauses for the period in which such acquisition is made) be
deemed to be a reference to a consolidation (in accordance with Fixed
GAAP) of such then latest financial statements and the latest
financial statements of such acquired member of the Group for such
period and (2) a report of the Company's auditors to the holders of
the Notes that a Subsidiary of the Company is or is not a Material
Subsidiary (in accordance with this definition) when delivered (as
part of the report of the Company's auditors or otherwise) shall be
conclusive and binding on the parties hereto.
"Modified Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Modified Make-Whole Amount shall in no
event be less than zero. For the purposes of determining the Modified Make-Whole
Amount, the following terms have the following meanings:
"Applicable Margin" means 0.50% (50 basis points).
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.9.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
Schedule B-16
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, the sum of the Applicable Margin plus the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City time)
on the second Business Day preceding the Settlement Date with respect to
such Called Principal, on (x) the Bloomberg Financial Markets News screen
PX1 or the equivalent screen provided by Bloomberg Financial Markets News,
or (y) if such on-line market data is not at the time provided by Bloomberg
Financial Markets News, on the display designated as "Page 500" on the
Telerate service (or such other display as may replace Page 500 on the
Telerate service), in any case for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury bill quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with a maturity
closest to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with a maturity closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number
of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.9 or
12.1.
Schedule B-17
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.9.
The Modified Make-Whole Amount shall be calculated for any prepayment
or repayment of the Notes based on the interest rate, interest payment and
mandatory prepayment schedule and maturity date of the notes as set forth
in the Notes and this Agreement.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA).
"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 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.
"Net Proceeds" means, the full amount of proceeds received by a member of
the Group in respect thereof less the reasonable costs incurred by the relevant
member of the Group in relation thereto for which purpose (a) such proceeds
shall be taken to include, in addition to consideration directly attributable to
the disposal of such asset or such matter, any amount owing to and set-off by
the relevant purchaser or other relevant third party, and (b) any proceeds
received otherwise than in cash will be treated as Net Proceeds only upon the
subsequent realization of cash from such proceeds. For purposes of this
definition, "reasonable costs incurred by the relevant member of the Group"
includes reasonable legal fees, agents' commissions, auditors' fees,
registration fees and Taxes paid or properly provided for in accordance with
GAAP (where such Tax is likely to become payable within the following 18 months,
or, only in the case of (i) any exercise of the put or call options under the
Zenith Joint Venture Agreement or any other disposal of shares (or other
interests) in Zenith or (ii) any flotation of, or sale or other disposal of all
or substantially all of its assets and undertakings by, Zenith or any of its
Subsidiaries, where the Company demonstrates to the reasonable satisfaction of
the Majority Holders that such Tax will become payable after such period).
"New Money" is defined in the Intercreditor Agreement.
"New Money Commitments" is defined in the Intercreditor Agreement.
"New Subsidiary Guarantees" is defined in Section 2.3 and includes the
Composite Guarantee and Debenture and the Composite Guarantee.
"New Subsidiary Guarantors" is defined in Section 2.3.
Schedule B-18
"Non-Guarantor Group" means those members of the Group which are not
members of the Guarantor Group.
"Noteholders" is defined in the introductory paragraph of this Agreement.
"Notes" is defined in Section 2.1(a).
"Obligor" means the Issuer, the Company, the Subsidiary Guarantors and the
Security Providers.
"OECD" means the "Organization for Economic Co-operation and Development",
the economic organization currently comprising 29 nations formed by the signing
of a convention in Paris on December 14, 1960.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Issuer or the Company, as the case may be, whose
responsibilities extend to the subject matter of such certificate.
"Overdraft Bank" means HSBC Bank plc as overdraft bank under the Syndicated
Loan Agreement with their successors in title.
"Parent Guarantee" is defined in Section 2.2.
"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 referred to and
defined in Section 4002 of ERISA or any successor thereto.
"Permitted Acquisitions" means:
(a) those acquisitions set out in Schedule 10.1.6;
(b) investments in the then existing Subsidiary Guarantors (or a
member of the Group or a newly formed entity which in each case
simultaneously becomes a Subsidiary Guarantor) and investments by a member
of the Group which is not a Subsidiary Guarantor in another member of the
Group which is not a Subsidiary Guarantor;
(c) Permitted Investments (as defined below); and
(d) the acquisition of related businesses (including companies where
the liability of its shareholders is limited to their respective share
capital in such company but not other entities) provided that:
(i) the consideration (without double counting within the Group),
including, without limitation, any deferred consideration
Schedule B-19
(whenever payable), and the obligations in respect of Borrowed Money
of any such company immediately following its acquisition or repaid
directly or indirectly by any member of the Group or otherwise assumed
by the Group and taking the value of any non-cash consideration at the
higher of its stated value under the agreement(s) for the acquisition
in question and the market value of such consideration on the date
such agreement(s) were entered into by the Group, in respect of all
such acquisitions by the Group (other than consideration constituted
by ordinary shares in the Parent issued or transferred to the relevant
vendor (or as it may direct)) shall not exceed $2,000,000 (or its
equivalent in any other currency) in aggregate in any Fiscal Year; and
(ii) the consideration constituted by ordinary shares in the
Company issued or transferred to the relevant vendor (or as it may
direct)) in respect of any single acquisition shall not exceed
$20,000,000 (or its equivalent); and
(iii) the finance director of the Company delivers a certificate
to the holders of Notes at least 5 Business Days before any member of
the Group enters into any commitment (conditional or otherwise) to
make such an acquisition in which the finance director of the Company
confirms that in his opinion (but without any personal liability on
the part of such finance director):
(A) the Company is basing such certificate on the most
recent financial information relating to such business which has
been obtained by the Company (acting prudently and reasonably)
and the Group's latest forecasts and projections (which are fair
and reasonable and have taken full and proper account of the
business to be so acquired (including, without limitation, all
contingent liabilities relating to the business to be so
acquired);
(B) the business to be so acquired is not insolvent and is
EBITDA positive (as determined in accordance with the definition
of Consolidated EBITDA above, but adjusted to exclude the effect
of historic non-recurring costs which will no longer be incurred
by that business following its acquisition);
(C) such acquisition is not, and the Company is not aware
(after due enquiry) of any matter or event which is, reasonably
likely to result in a breach of Section 10.3.1 or an Event of
Default under paragraphs (a), (b), (f), (g), (h), (i), (j), (k)
Schedule B-20
and (l) either immediately or within the period ending 12 months
after the date of such acquisition;
(D) the Group is reasonably likely to have sufficient
working capital during the period ending 12 months after the date
of such acquisition;
(E) after taking into account any Capital Expenditure
incurred by the Group in making such acquisition, the Group will
still be able, in compliance with the financial covenants in this
Agreement, to undertake sufficient Capital Expenditure so as to
properly maintain its businesses during the period ending 12
months after the date of such acquisition;
(F) in the case of acquisitions by members of the Group that
are not Subsidiary Guarantors, such acquisition is not funded
directly or indirectly by any Subsidiary Guarantor, other than to
the extent such funding is a Permitted Investment; and
(G) no Default or Event of Default has occurred which is
continuing and no Default or Event of Default will arise as a
result of such acquisition; and
(iv) no Default or Event of Default has occurred which is
continuing and no Default or Event of Default will arise as a result
of such acquisition,
and for the avoidance of doubt, any such acquired businesses shall be
immediately subject to the provisions of Section 9.1.11 and Section
10.
"Permitted Borrowed Money" means:
(a) Borrowed Money arising from normal trade credit;
(b) the Borrowed Money of any persons acquired by any member of the
Group pursuant to the acquisition of Diamond Ad Ltd. provided that such
Borrowed Money at no time exceeds Korean Won 16,900,000,000 (or its
equivalent) in aggregate;
(c) any Borrowed Money of any person (other than pursuant to the
acquisition of Diamond Ad Ltd. or the acquisition of Lighthouse Global
Network Inc.) acquired by any member of the Group after the date of
Syndicated Loan 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
Schedule B-21
respect of such Borrowed Money (and where such Borrowed Money is permitted
under clause (d) of the definition of "Permitted Acquisitions") and is
repaid or otherwise discharged within 30 days of such acquisition;
(d) 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;
(e) without duplication, Borrowed Money in respect of debit balances
at any bank or financial institution under the cash management arrangements
of the Group (net of the credit balances of the Group at such bank or
financial institution to the extent that such credit balances are subject
to contractual set-off against such debit balances (both before and after
insolvency under such cash management arrangements) where the aggregate of
all such net debit balances of the Group does not exceed (pound)5,000,000
(or its equivalent);
(f) Borrowed Money in respect of the Syndicated Loan Agreement (under
the terms as in effect on the Effective Date or as such terms may be
amended in accordance with the Intercreditor Agreement) and the Finance
Documents;
(g) 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;
(h) performance bonds issued by a member of the Group in respect of
the obligations (other than any payment obligations) of another member of
the Group in the ordinary course of trading;
(i) derivatives contracts entered into in accordance with the Hedging
Strategy Letter;
(j) Borrowed Money owed by one member of the Group to another member
of the Group (to the extent otherwise permitted under this Agreement);
(k) Borrowed Money of in respect of guarantees issued by banks on
behalf of members of the Group to media authorities in Korea and the United
Kingdom in each case in connection with bona fide arrangements for
maintenance of media accreditation in accordance with normal industry
practice; and
(l) Borrowed Money in addition to that permitted by clauses (a)
through (k) above not exceeding (pound)16,000,000 (or its equivalent) in
aggregate at any given time.
Schedule B-22
"Permitted Disposals" means:
(a) the disposal of stock-in-trade in the ordinary course of day to
day trading;
(b) any disposal for cash on arm's length terms where the aggregate of
the greater of the consideration and the market value of all such disposals
does not exceed (pound)10,000,000 (or its equivalent) provided that the
aggregate Net Proceeds of such disposal are applied as (and to the extent)
required by the Section 8.5; and
(c) any disposal by:
(i) a member of the Group to a Subsidiary Guarantor; and
(ii) a member of the Group which is not a Subsidiary Guarantor to
another member of the Group which is not a Subsidiary Guarantor,
but so that in each case where any such asset is shares, other ownership
interests in any person or entity, real property or real estate (or related
insurance policies), receivables (including intra-Group debts) or, in each
case, rights or claims in respect of any such asset and is subject or is
expressed to be subject to an Encumbrance pursuant to any Security
Documents such disposal shall only be permitted if either (x) the Majority
Holders are satisfied that the Subsidiary Guarantee given by the disposee
of the obligations of the Obligors under (inter alia) the Syndicated Loan
Agreement, the Notes and the Security Documents are not limited to a
greater extent than that given by the disposer and that either (1) such
Encumbrance is not prejudiced as a result of such disposal or (2) the asset
concerned becomes subject to a fully enforceable, legally binding
Encumbrance in favour of the Common Security Trustee, the Banks and the
holders of the Notes on terms substantially equivalent to or better than
the Encumbrances under the Security Documents prior to such disposal or (y)
the Majority Holders give their prior written consent;
(d) dealings with trade debtors with respect to book debts in the
ordinary course of trading;
(e) disposals of cash on arm's length terms not otherwise prohibited
by this Agreement and the Security Documents;
(f) disposals which constitute Permitted Investments (as defined
below); and
Schedule B-23
(g) disposals by the Zenith SPV with respect to any of the shares it
holds Zenith permitted under this Agreement provided that the proceeds of
such disposals are applied in accordance with Section 8.7,
and so that where the asset or assets the subject of a disposal permitted under
this definition (whether pursuant to clause (a) through (g) above or with the
prior written consent of the Majority Holders (but excluding the assets referred
to in the last paragraph of clause (c) above in the case of any disposal under
such clause)) is or are subject to an Encumbrance created by the Security
Documents, the consent of the Majority Holders (but without prejudice or
responsibility to or in respect of any other requisite consent) shall be granted
(and shall be deemed to be granted) for the release of the Encumbrance created
by the Security Documents over such assets provided that no Default or Event of
Default shall have occurred and be continuing neither remedied nor waived and
the Majority Holders shall accordingly instruct the Common Security Trustee to
grant the relevant releases.
"Permitted Encumbrances" means:
(a) prior to the Put Elimination Date:
(i) any Encumbrance constituting Security in favor of the Banks
and the Noteholders;
(ii) any right of set-off arising by operation of law in the
ordinary course of trading;
(iii) any Encumbrance created in favour of a Bank over the
relevant bank accounts in connection with any bona fide cash
management and/or netting arrangements for the Group which constitute
Permitted Investments;
(iv) any lien arising with respect to Taxes of the Group;
(v) any Encumbrance which the Majority Holders has at any time in
writing agreed shall be a Permitted Encumbrance;
(vi) certain Encumbrances listed on Schedule 10.1.1 securing the
amount set opposite the relevant Encumbrance in such schedule, but not
any increase in such amount;
(vii) 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 (and give such Encumbrances) only in
accordance with normal industry practice;
Schedule B-24
(viii) any Encumbrance on assets acquired after the date of the
Effective Date or on assets of a company which becomes a Subsidiary
after the Effective Date (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 30
days of the date of the relevant acquisition or such company becoming
a Subsidiary;
(ix) any Encumbrance (a "New Encumbrance") created by any member
of the Group in substitution for any Encumbrance referred to in
paragraph (vi) above (an "Existing Encumbrance") provided that (A)
such Existing Encumbrance is irrevocably and unconditionally
discharged no later than the time of creation of the New Encumbrance,
(B) the New Encumbrance relates only to the same assets as the
Existing Encumbrance and (C) the Indebtedness secured by the New
Encumbrance does not exceed the Indebtedness secured by the Existing
Encumbrance;
(x) 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;
(xi) the trust established in accordance with the terms of the
letters dated August 21, 1997 to beneficiaries of the support
agreement dated 1st October 1, 1987 and made between the Company and
Ted Bates Worldwide Inc.;
(xii) 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, and not incurred in connection
with the raising of finance;
(xiii) any Encumbrance constituted by a permitted Finance Lease;
(xiv) any pledge of documents of title relevant to the asset 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;
Schedule B-25
(xv) 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;
(xvi) any Encumbrance granted by a member of the Group over any
rent deposits as security for rental payments to be made by such
member of the Group under or pursuant to any lease of premises used
for its business; and
(xvii) any Encumbrance not otherwise permitted pursuant to
paragraphs (i) to (xvi) above (inclusive) and securing Indebtedness in
aggregate not exceeding (pound)2,000,000, and
(b) on the Put Elimination Date and thereafter:
(i) any right of set-off arising by operation of law in the
ordinary course of trading;
(ii) any Encumbrance arising with respect to Taxes of the Group
that at the time are not required to be paid pursuant to Section
9.3.3;
(iii) 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;
(iv) the trust established in accordance with the terms of the
letters dated 21st August 1997 to beneficiaries of the support
agreement dated October 1, 1987 and made between the Company and Ted
Bates Worldwide Inc.;
(v) 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;
(vi) any Encumbrance existing on April 5, 2001 and either
securing in the aggregate less than $1,000,000 (or its equivalent in
any other currency) or described in Schedule 5.15;
(vii) Encumbrances in respect of property (or the revenues from
operations conducted exclusively with such property) acquired or
constructed or improved by the Company or a Subsidiary after April 5,
2001, which are created at the time of or within 180 days after
acquisition or completion of construction or improvement of such
Schedule B-26
property to secure all or any part of the purchase price of such
property or cost of construction of such property, provided that in
any such case
(A) no such Encumbrance shall extend to or cover any other
property of the Company or such Subsidiary, as the case may be,
and
(B) the aggregate principal amount of the obligations
secured by all such Encumbrances in respect of any such property
shall not exceed the cost of such property and any improvements
then being financed;
(viii) any Encumbrance on assets acquired after April 5, 2001 or
on assets of a Person which becomes a Subsidiary after April 5, 2001
(which Encumbrances were in existence at the date of acquisition or of
such Person 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 Person becomes a Subsidiary and
provided that the same is discharged in full within six months of the
date of the relevant acquisition or such Person becoming a Subsidiary;
(ix) any Encumbrance (a "New Encumbrance") created by any member
of the Group in substitution for any Encumbrance referred to in clause
(vi) above (an "Existing Encumbrance") provided that (A) such Existing
Encumbrance is irrevocably and unconditionally discharged no later
than the time of creation of the New Encumbrance, (B) the New
Encumbrance relates only to the same assets as the Existing
Encumbrance and (C) the Indebtedness secured by the New Encumbrance
does not exceed the Indebtedness secured by the Existing Encumbrance;
and
(x) Encumbrances that would not otherwise fall within the
definition of Permitted Encumbrances pursuant to clauses (i) through
(ix) above, securing obligations of the Issuer, the Company or a
Subsidiary, provided that the sum (without duplication) of (A) the
aggregate unpaid principal amount of Borrowed Money (including in
respect of Finance Leases) of the Issuer, the Company and all
Subsidiary Guarantors secured by Encumbrances referred to in this
definition of Permitted Encumbrances plus (B) the aggregate unpaid
principal amount of Borrowed Money of Subsidiaries (other than the
Issuer and Subsidiary Guarantors) outstanding pursuant to Section
10.2.2(d), does not at any time exceed 10% of Consolidated Net Worth.
Schedule B-27
"Permitted Guarantees" means:
(a) any Guaranty created pursuant to the terms of the Finance
Documents;
(b) any Guaranty which the Majority Holders have at any time in
writing agreed shall be a Permitted Guarantee;
(c) any Guaranty given by a member of the Group of the obligations of
any Subsidiary Guarantor, any Guaranty given by a member of the Group which
is not a Subsidiary Guarantor of the obligations of another member of the
Group which is also not a Subsidiary Guarantor and any Guarantees which
constitutes a Permitted Investment (as defined below);
(d) certain Guarantees given by members of the Group listed on
Schedule 10.1.2 guaranteeing the amount set opposite the relevant guarantee
on such schedule, but not any increase in such amount;
(e) any Guaranty given by a company which becomes a Subsidiary after
the Effective Date (which Guaranty 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 30 days of the relevant company
becoming a Subsidiary;
(f) any Guaranty given by a company in the Group in favor of a bank in
connection with any bona fide cash management and/or netting arrangements
for the Group which constitute Permitted Investments;
(g) any Guaranty 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
(and give such Guarantees) 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; and
Schedule B-28
(j) any Guaranty in addition to that permitted by paragraphs (a)
through (i) above that is permitted under Section 10.1.2 as it relates to
paragraph (l) of the definition of "Permitted Borrowed Money".
"Permitted Investments" means (i) investments in the shares of (or other
ownership interests in), (ii) loans or credit granted to, (iii) disposals to
(not otherwise permitted under clauses (a) to (e) inclusive of the definition of
"Permitted Disposals" or clause (g) of the definition of "Permitted Disposals",
and (iv) guarantees of the Indebtedness of, any member of the Group which is not
a Subsidiary Guarantor (or such investments in establishing a new entity which
once formed is a member of the Group which is not a Subsidiary Guarantor) where
the aggregate of such investments, loans, credit, disposals, and guarantees made
in the relevant Fiscal Year, together (without double counting) with the Pooling
Borrowed Money (as defined below) at any relevant time during such Fiscal Year,
at no time exceeds:
(a)(pound)20,000,000 (or its equivalent) during the Fiscal Year ending
December 31, 2002; or
(b)(pound)15,000,000 (or its equivalent) during each subsequent Fiscal
Year.
provided that, for the purposes of this definition:
(i) "Pooling Borrowed Money" means, at any relevant time, the
aggregate of the Borrowed Money of any members of the Group which are not
Subsidiary Guarantors under any cash management arrangements in respect of
which any Subsidiary Guarantor grants any guarantee, rights of set-off or
any other Encumbrance;
(ii) the value attributable to a disposal of an asset shall be the
market value of the disposed asset; and
(iii) the relevant aggregate limit applicable during a Fiscal Year
shall be increased by the amount of (A) any repayment, release or
cancellation (whether in whole or in part) of loans, credits and guarantees
previously taken into account for the purpose of determining compliance
with "Permitted Investments" during such Fiscal Year and (B) cash proceeds
(to the extent not already taken into account pursuant to clause (A)
above), (net of related costs and Taxes) received by a Guarantor from a
member of the Group which is not a Guarantor in such Fiscal Year under a
series of related transactions involving an investment in such
non-Guarantor made by such Guarantor within 13 months of such receipt and
previously taken into account for the purpose of determining compliance
with "Permitted
Schedule B-29
Investments" (to the extent that such net cash proceeds do not exceed the
amount of such investment so taken into account).
"Permitted Jurisdiction" means (a) the United States of America, (b) the
United Kingdom and (c) any other country that on the date hereof is a member of
the OECD (other than Greece or Turkey).
"Permitted Loans" means loans or credit to a Subsidiary Guarantor or loans
or credit from one member of the Group which is not a Subsidiary Guarantor to
another member of the Group which is not a Subsidiary Guarantor and loans or
credit constituting Permitted Investments.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"PIK Management Fee" is defined in Section 8.1(b)(i).
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) subject to Title I of ERISA that is or, within the preceding five years,
has been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
has any liability.
"Prepayment Event" means (a) the borrowing or raising of Borrowed Money
(including, without limitation, any public or private issue of debt securities)
by any member of the Group that either is not intended to effect, or is in fact
in an amount that is insufficient to effect the repayment in full and
cancellation of the facilities under the Syndicated Loan Agreement, and (b) the
sale or other disposal of all or substantially all of the assets and
undertakings of the Group.
"Preferred Stock", as applied to any Person, means shares or equity
interests of such Person that shall be entitled to preference or priority over
any other shares or equity interests of such Person in respect of either the
payment of dividends or the distribution of assets upon liquidation, or both.
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, inchoate or
otherwise.
"Property Payments" means the aggregate amount of (i) the payments made by
any 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.
Schedule B-30
"PTE" is defined in Section 6.2.
"Put Elimination Conditions" is defined in Section 8.8(f).
"Put Elimination Date" means the date on which the Company's obligations
under clauses (a) through (e) of Section 8.8 are eliminated pursuant to Section
8.8(f).
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
on March 13, 1984 by the United States Department of Labor.
"Quarter Days" means 31 March, 30 June, 30 September and 31 December in any
year.
"Receiver" is defined in Section 10.2.1.
"Refinancing Prepayment Date" is defined in Section 8.8(b).
"Refinancing Response Date" is defined in Section 8.8(c).
"Required Holders" means, at any time, the holders of at least 66 2/3% in
unpaid principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Issuer or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Issuer or the Company, as the case may be, with responsibility
for the administration of the relevant portion of this Agreement.
"Restructuring Deed" means the restructuring deed dated on or about the
Effective Date made between the Company and certain of its Subsidiaries and the
Bank Finance Parties pursuant to which the Syndicated Loan Agreement was
executed.
"Restructuring Transaction" is defined in Section 2.1(a).
"Sale-and-Leaseback Transaction" means a transaction or series of
transactions pursuant to which the Company or any Subsidiary shall sell or
transfer to any Person (other than the Company or a Subsidiary Guarantor) any
property, whether now owned or hereafter acquired, and, as part of the same
transaction or series of transactions, the Company or any Subsidiary Guarantor
shall rent or lease as lessee, or similarly acquire the right to possession or
use of, such property or one or more properties which it intends to use for the
same purpose or purposes as such property.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
Schedule B-31
"Security" means the security expressed to be created in favor of the
Security Trustee pursuant to the Security Documents.
"Security (Bank) Trustee" means HSBC Investment Bank plc and its successors
in title as security trustee under the Syndicated Loan Agreement.
"Security Documents" means the Composite Guarantee and Debenture and each
other document entered into by any one or more of the Company and its
Subsidiaries creating or expressed to create an Encumbrance over all or any part
of its assets in respect of the obligations of any one or more of such Persons
under this Agreement, the Notes or the Syndicated Loan Agreement.
"Security Memorandum" is defined in Section 4.12.
"Security Providers" is defined in Section 2.4(a).
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Issuer or the Company, as the
case may be.
"Sterling" and "(pound)" mean the lawful currency for the time being of the
United Kingdom.
"Subsidiary" means, as to any Person, any corporation or other business
entity a majority of the combined voting power of all Voting Stock of which is
owned by such Person or one or more of its Subsidiaries or such Person and one
or more of its Subsidiaries. Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantee" is defined in Section 2.3 and includes the Composite
Guarantee and the Composite Guarantee and Debenture.
"Subsidiary Guarantor" is defined in Section 2.3.
"Subsidiary Guarantor Consent" is defined in Section 4.5.
"Swingline Bank" means The Bank of New York as swingline under the
Syndicated Loan Agreement together with its successors in title.
"Syndicated Loan Agreement" means the Loan Agreement dated 19 April 2002
and made between the Company, certain of Company's Subsidiaries, the Bank
Arrangers, the Banks, the Bank Agent, the Security (Bank) Trustee, the Common
Security Trustee, The Bank of New York as Swingline Bank and HSBC Bank plc as
Overdraft Bank.
Schedule B-32
"Tax" and collectively "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.
"Taxing Jurisdiction" is defined in Section 14.
"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 Listing Authority" means the Financial Services Authority acting in its
capacity as competent authority for purposes of the United Kingdom Financial
Services Act 1986.
"Voting Stock" means, with respect to any Person, any shares of stock or
other equity interests of any class or classes of such Person whose holders are
entitled under ordinary circumstances (irrespective of whether at the time stock
or other equity interests of any other class or classes shall have or might have
voting power by reason of the happening of any contingency) to vote for the
election of a majority of the directors, managers, trustees or other governing
body of such Person.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary all of the
equity interests (except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the Company's other
Wholly-Owned Subsidiaries at such time.
"Zenith" means Zenith Optimedia Limited (registered no. 3423055).
"Zenith Guarantee" means the guarantee given by the Company to HSBC
Investment Bank plc as Security Trustee in respect of the (pound)21,500,000
facility agreement dated September 30, 1997 and made between (inter alios)
Zenith, HSBC Investment Bank plc as agent and security trustee and the banks
referred to therein, as the same is in effect on December 31, 2000 and without
any increase in the amount guaranteed.
"Zenith Joint Venture Agreement" is defined in Section 4.21(a).
"Zenith SPV" is defined in Section 4.21(a).
Schedule B-33
EXHIBIT 2.1
[FORM OF NOTE]
CORDIANT FINANCE, INC.
AMENDED AND RESTATED GUARANTEED SENIOR NOTE DUE 2011
No. R-[__] New York, New York
U.S. $[_______] , 20__
PPN: 21851# AA 0
FOR VALUE RECEIVED, the undersigned, CORDIANT FINANCE, INC., a Delaware
corporation (the "Issuer"), hereby promises to pay to [ ], or registered
assigns, the principal sum of [ ] DOLLARS on April 5, 2011, with interest and
other amounts as provided in the Note Purchase Agreement (defined below).
Capitalized terms used herein and not otherwise defined herein have the
respective meanings ascribed thereto in the Note Purchase Agreement.
Payments of principal of, interest on and any PIK Management Fees, any
Change of Control Fee and Make-Whole Amount with respect to this Note are to be
made in lawful money of the United States of America at said principal office of
Citibank, N.A. in New York City or at such other place as the Issuer shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below.
This Note is one of a series of Amended and Restated Guaranteed Senior
Notes issued pursuant to the Amended and Restated Note Purchase Agreement dated
as of April 19, 2002 (as from time to time amended, the "Note Purchase
Agreement") entered into by the Issuer and Cordiant Communications Group plc
(the "Parent") with the respective Noteholders listed in Schedule A thereto and
is entitled to the benefits thereof, including the unconditional guarantee by
the Parent of the obligations of the Issuer under this Note. This Note is also
entitled to the benefits of certain Subsidiary Guarantees and Security referred
to in the Note Purchase Agreement and is subject to the terms and provisions of
an Intercreditor Agreement dated April __, 2002 among, inter alia, the holders
of the Notes and certain other creditors of the Issuer and the Parent. Each
transferee of this Note will be deemed, by its acceptance hereof, to have agreed
to the confidentiality provisions set forth in Section 22 of the Note
Agreements. Each transferee of this Note will also be deemed, by its acceptance
hereof, to have made the representation set forth in paragraph (a), (c), (d) or
(e) of Section 6.2 of the Note Purchase Agreement unless such transferee advises
the Issuer prior to the registration of such transfer that such transferee
cannot make such representation, in which event such transferee shall be
required to comply with the requirements of Section 15.2 of the Note Purchase
Agreement as to matters relating to possible prohibited
Exhibit 2.1-1
transactions under ERISA and the Code (as respectively defined in the Note
Purchase Agreement).
This Note is a registered Note and, subject to the terms and conditions and
as provided in the Note Purchase Agreement, upon surrender of this Note for
registration of transfer accompanied by a written instrument of transfer duly
executed by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Note for a like principal amount (or, if less, the
then unpaid principal amount) will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Issuer may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Issuer will not be affected by any notice to the contrary.
The Issuer will make required prepayments of principal on the dates and in
the amounts specified in the Note Agreements. This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including without limitation
any applicable Make-Whole Amount, PIK Management Fees, Defined Make-Whole
Interest and/or Change of Control Fee) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the holder hereof shall be governed by, the laws of the State of New
York, excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
CORDIANT FINANCE, INC.
By
----------------------------------------
Title:
Exhibit 2.1-2
EXHIBIT 1.2
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of __________, 20__, made by
________________________, a _________________ [ ] (the "Guarantor"), in favor of
the holders from time to time of the Guaranteed Obligations referred to below
(individually a "Holder" and sometimes collectively the "Obligees").
WHEREAS, Cordiant Finance, Inc. (the "Issuer") and Cordiant Communications
Group plc, a public limited company organized under the laws of England and
Wales (the "Parent Guarantor"), have entered into an Amended and Restated Note
Purchase Agreement dated as of April __, 2002 (as amended or otherwise modified
from time to time, the "Note Agreement" and terms defined therein and not
otherwise defined herein are being used herein as so defined) with the
institutions listed in Schedule A thereto (collectively, together with their
successors and assignors, the "Noteholders", with respect to the $175,000,000
aggregate principal amount of the Issuer's Amended and Restated Guaranteed
Senior Notes due 2011 held by the Noteholders (the "Notes") and pursuant to
which the Parent Guarantor has unconditionally guaranteed the obligations of the
Issuer under the Note Agreement and the Notes pursuant to the terms of the
Parent Guarantee contained in the Note Agreement; and
WHEREAS, it is a requirement of the Note Agreement that the Guarantor shall
execute and deliver this Guarantee Agreement; and
WHEREAS, the Guarantor is a Subsidiary of the Parent Guarantor and the
Guarantor will derive substantial direct and indirect benefit from the execution
and delivery of this Guarantee Agreement.
NOW, THEREFORE, in consideration of the premises the Guarantor hereby
agrees as follows:
SECTION 1. Guarantee. The Guarantor unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the due and punctual
performance and observance by the Parent Guarantor of all covenants, agreements
and conditions on its part to be performed and observed under the Parent
Guarantee (all such obligations are called the "Guaranteed Obligations").
The Guarantor also agrees to pay, in addition to the amount stated above, any
and all reasonable expenses (including reasonable counsel fees and expenses)
incurred by any Obligee in enforcing any rights under this Guarantee Agreement
or in connection with any amendment of this Guarantee Agreement.
Without limiting the generality of the foregoing, this Guarantee Agreement
guarantees, to the extent provided herein, the payment of all amounts which
Exhibit 1.2-1
constitute part of the Guaranteed Obligations and would be owed by any other
Person to any Obligee but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Person.
SECTION 2. Guarantee Absolute. The obligations of the Guarantor under
Section 1 of this Guarantee Agreement constitute a present and continuing
guaranty of payment and not of collectability and the Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Parent Guarantee, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Obligee with respect thereto. The obligations of the Guarantor
under this Guarantee Agreement are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against the
Guarantor to enforce this Guarantee Agreement, irrespective of whether any
action is brought against the Parent Guarantor or any other Person liable for
the Guaranteed Obligations or whether the Parent Guarantor or any other such
Person is joined in any such action or actions. The liability of the Guarantor
under this Guarantee Agreement shall be primary, absolute, irrevocable, and
unconditional irrespective of:
(a) any lack of validity or enforceability of any Guaranteed
Obligation, the Note Agreement, any Note, the Parent Guarantee or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from the Note Agreement,
any Note, the Parent Guarantee or this Guarantee Agreement;
(c) any taking, exchange, release or non-perfection of any collateral,
or any taking, release or amendment or waiver of or consent to departure by
the Guarantor or other Person liable, or any other guarantee, for all or
any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral or any other assets of the Parent Guarantor
or any Subsidiary;
(e) any change, restructuring or termination of the corporate
structure or existence of the Parent Guarantor or any other Subsidiary; or
(f) any other circumstance (including without limitation any statute
of limitations) that might otherwise constitute a defense, offset or
counterclaim available to, or a discharge of, the Parent Guarantor or the
Guarantor.
Exhibit 1.2-2
This Guarantee Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by any Obligee or any
other Person upon the insolvency, bankruptcy or reorganization of the Parent
Guarantor or otherwise, all as though such payment had not been made.
SECTION 3. Waivers. The Guarantor hereby irrevocably waives, to the extent
permitted by applicable law:
(a) promptness, diligence, presentment, notice of acceptance and any
other notice with respect to any of the Guaranteed Obligations and this
Guarantee Agreement;
(b) any requirement that any Obligee or any other Person protect,
secure, perfect or insure any Encumbrance or any property subject thereto
or exhaust any right or take any action against the Parent Guarantor or any
other Person or any collateral;
(c) any defense, offset or counterclaim arising by reason of any claim
or defense based upon any action by any Obligee;
(d) any duty on the part of any Obligee to disclose to the Guarantor
any matter, fact or thing relating to the business, operation or condition
of any Person and its assets now known or hereafter known by such Obligee;
and
(e) any rights by which it might be entitled to require suit on an
accrued right of action in respect of any of the Guaranteed Obligations or
require suit against the Parent Guarantor or the Guarantor or any other
Person.
SECTION 4. Waiver of Subrogation and Contribution. The Guarantor shall not
assert, enforce, or otherwise exercise (A) any right of subrogation to any of
the rights, remedies, powers, privileges or Encumbrances of any Obligee or any
other beneficiary against the Parent Guarantor or any other obligor on the
Guaranteed Obligations or any collateral or other security, or (B) any right of
recourse, reimbursement, contribution, indemnification, or similar right against
the Parent Guarantor, and the Guarantor hereby waives any and all of the
foregoing rights, remedies, powers, privileges and the benefit of, and any right
to participate in, any collateral or other security given to any Obligee or any
other beneficiary to secure payment of the Guaranteed Obligations, until such
time as the Guaranteed Obligations have been indefeasibly paid in full.
Exhibit 1.2-3
SECTION 5. Representations and Warranties. The Guarantor hereby represents
and warrants as follows:
The Guarantor is a [corporation/limited liability company/other entity to
be described] duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation. The execution, delivery and performance
of this Guarantee Agreement have been duly authorized by all necessary action on
the part of the Guarantor, and this Guarantee Agreement constitutes a legal,
valid and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as such enforceability may be limited by
(a) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
The execution, delivery and performance by the Guarantor of this Guarantee
Agreement will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Encumbrance in respect of any
property of the Guarantor or any Subsidiary of the Guarantor under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other material agreement or instrument to
which the Guarantor or any Subsidiary of the Guarantor is bound or by which the
Guarantor or any Subsidiary of the Guarantor or any of their respective
properties may be bound or affected, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Guarantor or any Subsidiary of the Guarantor or (iii) violate any provision of
any statute or other rule or regulation of any Governmental Authority applicable
to the Guarantor or any Subsidiary of the Guarantor.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Guarantor of this Guarantee Agreement.
SECTION 6. Amendments, Etc. No amendment or waiver of any provision of this
Guarantee Agreement and no consent to any departure by the Guarantor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Majority Holders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and signed by all
Obligees, (A) limit the liability of or release the Guarantor hereunder, (B)
postpone any date fixed for, or change the amount of, any payment hereunder or
(C) change the percentage of Notes the holders of which are, required to take
any action hereunder.
Exhibit 1.2-4
SECTION 7. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing and sent (A) by telecopy if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (B) by registered or certified
mail with return receipt requested (postage prepaid), or (C) by a recognized
overnight delivery service (with charges prepaid). Such notice if sent to the
Guarantor shall be addressed to it at the address of the Guarantor provided
below its name on the signature page of this Guarantee Agreement or at such
other address as the Guarantor may hereafter designate by notice to the
Obligees. Any notice or other communication herein provided to be given to the
Obligees shall be deemed to have been duly given if sent as aforesaid to each of
the registered holders of the Notes at the time outstanding at the address for
such purpose of such holder as it appears on the Note register maintained by the
Issuer in accordance with the provisions of Section 14.1 of the Note Agreement.
SECTION 8. No Waiver; Remedies. No failure on the part of any Obligee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 9. Continuing Guarantee. This Guarantee Agreement is a continuing
guarantee of payment and performance and shall (A) remain in full force and
effect until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guarantee Agreement, (B) be binding upon the Guarantor, its
successors and assigns and (C) inure to the benefit of and be enforceable by the
Obligees and their successors, transferees and assigns.
SECTION 10. Jurisdiction and Process; Waiver of Jury Trial. The Guarantor
irrevocably submits to the non-exclusive in personam jurisdiction of any New
York State or federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to this
Guarantee Agreement. To the fullest extent permitted by applicable law, the
Guarantor irrevocably waives and agrees not to assert, by way of motion, as a
defense or otherwise, any claim that it is not subject to the in personam
jurisdiction of any such court, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.
The Guarantor consents to process being served in any suit, action or
proceeding of the nature referred to in this Section by mailing a copy thereof
by registered or certified mail, postage prepaid, return receipt requested, to
the Guarantor at its address specified in Section 7 or at such other address of
which the Obligees shall then have been notified pursuant to said Section or to
the Issuer, as
Exhibit 1.2-5
its agent for the purpose of accepting service of any process in the United
States, at the Issuer's address specified in Section 20 of the Note Agreement.
The Guarantor agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to the
Guarantor. Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or
any recognized courier or overnight delivery service.
Nothing in this Section 10 shall affect the right of any Obligee to serve
process in any manner permitted by law, or limit any right that the Obligees may
have to bring proceedings against the Guarantor in the courts of any appropriate
jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
THE GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT
TO THIS GUARANTEE AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION
HEREWITH.
SECTION 11. Tax Indemnification.
All payments whatsoever under this Guarantee Agreement will be made by the
Guarantor in the lawful currency of the United States of America free and clear
of, and without liability or withholding or deduction for or on account of, any
present or future Taxes of whatever nature imposed or levied by or on behalf of
any jurisdiction other than the United States (or any political subdivision or
taxing authority of or in such jurisdiction) (hereinafter a "Taxing
Jurisdiction"), unless the withholding or deduction of such Tax is compelled by
law.
If any deduction or withholding for any Tax of a Taxing Jurisdiction shall
at any time be required in respect of any amounts to be paid by the Guarantor
under this Guarantee Agreement, the Guarantor will pay such additional amounts
as may be necessary in order that the net amounts paid to each Obligee pursuant
to the terms of this Guarantee Agreement, after such deduction or withholding
(including any required deduction or withholding of Tax on or with respect to
such additional amount), shall equal the amounts then due and payable under the
terms of this Guarantee Agreement to the Parent Guarantor, provided that no
payment of any additional amounts shall be required to be made for or on account
of:
(a) any Tax that would not have been imposed but for the existence of
any present or former connection between such Holder (or between a
fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of
a power over, such Holder, if such Holder is an estate, trust, partnership
or corporation or any Person other than the Holder to whom this Guarantee
Agreement or any amount payable hereunder is attributable for the purposes
Exhibit 1.2-6
of such Tax) and the Taxing Jurisdiction, other than the mere holding of
this Guarantee Agreement or receipt of payments hereunder, including
without limitation such Holder (or such other Person described in the above
parenthetical) being or having been a citizen or resident thereof, or being
or having been engaged in a trade or business therein or having an
establishment office, fixed base or branch therein, provided that this
exclusion shall not apply with respect to a Tax that would not have been
imposed but for the Guarantor, after the Effective Date, opening an office
in, moving an office, or reincorporating in, or changing the Taxing
Jurisdiction from or through which payments on account of this Guarantee
Agreement are made to, the Taxing Jurisdiction imposing the relevant Tax;
(b) any Tax that would not have been imposed but for the failure of
such Holder to qualify as a resident of the United States for purposes of a
tax treaty between the United States and the Taxing Jurisdiction or the
failure of such Holder to comply with any reporting or filing requirement
under such tax treaty (unless such failure to comply (i) is attributable
solely to the failure of the Guarantor to provide notice or copies of any
Form (as defined below) in accordance with the procedures described in the
immediately succeeding paragraph or (ii) occurs notwithstanding compliance
by such Holder with such procedures); or
(c) any Taxes on such holder's net income or net profits;
(d) any Tax which is payable otherwise than by deduction or witholding
from payments made under or with respect to any Note;
(e) any estate, inheritance, gift, sales, transfer, personal property
or similar Tax; or
(f) any combination of clauses (a) through (e) above;
provided further that no such additional amounts shall be payable to (i)
any Holder who is a fiduciary or a partnership or a beneficial owner who is
other than the sole beneficial owner of such payment to the extent a
beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner would not have been entitled to such
additional amounts had it been the Holder or (ii) any Holder who is not a
resident of the United States or with respect to any payment all or any
part of which represents income which is not subject to United States tax
as income of a resident of the United States.
By acceptance of any Note, the Holder of such Note as the beneficiary of
the Parent Guarantee agrees to assist the Guarantor in complying with
administrative requirements imposed by any Governmental Authority in a Taxing
Jurisdiction in connection with applicable law of such Taxing Jurisdiction,
including without
Exhibit 1.2-7
limitation an applicable tax treaty, it being agreed as between the Holders of
the Notes as beneficiaries of the Parent Guarantee and the Guarantor that
compliance with any such administrative requirements shall be the sole
responsibility of the Parent Guarantor and the Guarantor. In furtherance of the
foregoing, by such acceptance, each such Holder agrees that it will from time to
time with reasonable promptness (x) duly complete and deliver to or as
reasonably directed by the Parent Guarantor or the Guarantor all such forms,
certificates, documents and returns provided to such Holder by the Parent
Guarantor or the Guarantor (collectively "Forms") required to be filed by or on
behalf of such Holder in order to avoid or reduce any such Tax pursuant to the
provisions of an applicable statute, regulation or administrative practice of
the relevant Taxing Jurisdiction or of a tax treaty between the United States
and such Taxing Jurisdiction and (y) provide the Parent Guarantor or the
Guarantor with such information with respect to such Holder as the Parent
Guarantor or the Guarantor may reasonably request in order to complete any such
Forms, provided that nothing in this Section 11 shall require any Holder to
provide information with respect to any such Form if in the opinion of such
Holder such Form would involve the disclosure of tax return or other information
that is confidential or proprietary to such Holder, and provided further that,
except as described below in respect of the transfer of any Note, each such
Holder shall be deemed to have complied with its obligation under this paragraph
with respect to any Form if such Form shall have been duly completed and
delivered by such Holder to the Parent Guarantor or the Guarantor or mailed to
the appropriate taxing authority within 60 days following a written request of
the Parent Guarantor or the Guarantor (which request shall be accompanied by
copies of such Form).
The Guarantor will furnish the Holders, within the period of payment
permitted by applicable law, an official receipt, if any, issued by the relevant
taxation or other authorities involved for all amounts deducted or withheld as
aforesaid.
Section 12. Judgment Currency.
Any payment on account of an amount that is payable hereunder by the
Guarantor in U.S. Dollars which is made to or for the account of any Obligee in
any other currency, whether as a result of any judgment or order or the
enforcement thereof or the realization of any security or the liquidation of the
Guarantor, shall constitute a discharge of the Guarantor's obligation under this
Guarantee Agreement only to the extent of the amount of U.S. Dollars which such
Obligee could purchase in the foreign exchange markets in London, England, with
the amount of such other currency in accordance with normal banking procedures
at the rate of exchange prevailing on the London Banking Day following receipt
of the payment first referred to above. If the amount of U.S. Dollars that could
be so purchased is less than the amount of U.S. Dollars originally due to such
Obligee, the Guarantor agrees, to the fullest extent permitted by law, to
indemnify and save
Exhibit 1.2-8
harmless such Obligee from and against all loss or damage arising out of or as a
result of such deficiency. This indemnity shall, to the fullest extent permitted
by law, constitute an obligation separate and independent from the other
obligations contained in this Guarantee Agreement, shall give rise to a separate
and independent cause of action, shall apply irrespective of any indulgence
granted by such Obligee from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in respect of
an amount due hereunder or under any judgment or order. As used herein the term
"London Banking Day" shall mean any day other than Saturday or Sunday or a day
on which commercial banks are required or authorized by law to be closed in
London, England.
SECTION 13. Governing Law. This Guarantee Agreement shall be construed and
enforced in accordance with, and the rights of the Guarantor and the Obligees
shall be governed by, the laws of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee Agreement to be
duly executed and delivered as of the date first above written.
[GUARANTOR]
By
----------------------------------------
Title:
Address:
Attention:
Telephone:
Telecopy:
Exhibit 1.2-9
EXHIBIT 4.12
Memorandum of Agreed Principles of Security
1 Introduction
1.1 This Memorandum is entered into pursuant to:
1.1.1 the restructuring deed dated on or about the date of this Memorandum
between, amongst others, Cordiant Communications Group plc as Parent
(1), the companies whose respective names, registered numbers (if any)
and registered offices are set out in schedule 1 thereto as Borrowers
(2), the companies whose respective names, registered numbers (if any)
and registered offices are set out in schedule 2 thereto as Original
Guarantors (3), the companies whose respective names, registered
numbers (if any) and registered offices are set out in schedule 2
thereto as Overdraft Guarantors (4), the companies whose respective
names, registered numbers (if any) and registered offices are set out
in schedule 3 thereto as Additional Overdraft Borrowers (5) The Bank
of New York and HSBC Investment Bank plc as Arrangers (6), the banks
and financial institutions whose respective names and addresses are
set out in schedule 3 thereto as Banks (7), HSBC Investment Bank plc
as Agent, Security Trustee and Common Security Trustee (8), The Bank
of New York as Swingline Bank (9) and HSBC Bank plc as Overdraft Bank
(9) (the "Restructuring Deed");
1.1.2 the loan agreement for facilities of up to(pound)155,871,146.52 dated
4 July 2000 between, amongst others, Cordiant Communications Group plc
as Parent (1), the companies whose respective names, registered
numbers (if any) and registered offices are set out in schedule 1
thereto as 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, Security Trustee and
Common Security Trustee (5), The Bank of New York as Swingline Bank
(6) and HSBC Bank plc as Overdraft Bank (7) as amended from time to
time and as amended and restated pursuant to the Restructuring Deed
(the "Credit Agreement");
1.1.3 the note purchase agreements dated as of 5 April 2001 (the "Existing
Note Purchase Agreements") among Cordiant Finance Inc. as Issuer (1),
Cordiant Communications Group plc as Parent Guarantor (2) and the
purchasers listed on Schedule A thereto (3) pursuant to which the
Exhibit 4.12-1
Issuer issued US$175,000,000 Guaranteed Senior Notes due 2011 (the
"Existing Notes");
1.1.4 the Amended and Restated Note Purchase Agreement dated on or about the
date of this Memorandum (the "Amended and Restated Note Purchase
Agreement") among the Issuer (1), the Parent (2) and the Noteholders
(as defined in the Amendment and Restated Note Purchase Agreement) (3)
amending the Existing Note Purchase Agreement and the Existing Notes;
1.1.5 the intercreditor agreement dated on or about the date of this
Memorandum between, amongst others, Cordiant Communications Group plc
as Parent (1), the banks and financial institutions set out in
schedule 2 thereto as Existing Banks (2) and the Noteholders set out
in schedule 3 thereto as Existing Noteholders (3) (the "Intercreditor
Agreement"); and
1.1.6 the common security trust deed dated on or about the date of this
Memorandum between, amongst others, Cordiant Communications Group plc
as Parent (1), HSBC Investment Bank plc as Common Security Trustee
(2), the banks and financial institutions set out in part A of
schedule 3 thereto as Banks (3), and the Noteholders set out in part B
of schedule 3 thereto as Noteholders.
1.2 Terms defined in the Intercreditor Agreement shall, unless the context
otherwise requires, have the same meaning where used in this
Memorandum, and the term "Restructuring Date" when used herein shall
mean the effective date of the Restructuring Deed and the Amended and
Restated Note Purchase Agreement.
1.3 This Memorandum:
1.3.1 is the Security Memorandum as defined in the Credit Agreement and the
Amended and Restated Note Purchase Agreement;
1.3.2 sets out a list of the guarantees that have been provided by certain
members of the Group prior to the Restructuring Date which secure the
obligations of certain of the Obligors to the Banks under the Credit
Agreement and the obligations of Cordiant Finance Inc. under the
Amended and Restated Note Purchase Agreement; and
1.3.3 sets out the Parent's agreement with the Agent, the Noteholders and
Common Security Trustee as to the guarantees and security that are to
be executed and delivered to the Common Security Trustee by certain of
the members of the Group to secure the obligations of the Obligors
under the Funding Agreements under paragraph 3.2 of schedule 5 to
Exhibit 4.12-2
the Restructuring Deed and paragraph 4.5 of the Amended and Restated
Note Purchase Agreement and in accordance with the terms of the Credit
Agreement and the Amended and Restated Note Purchase Agreement.
2 Existing guarantees
2.1 the Credit Agreement ("Existing Bank Guarantees"):
2.1.1 Guarantee given by Atlas Advertising Limited in favour of the Security
Trustee dated 30 August 2000.
2.1.2 Guarantee given by Bates Europe Limited in favour of the Security
Trustee dated 30 August 2000.
2.1.3 Guarantee given by Bates UK Limited in favour of the Security Trustee
dated 30 August 2000.
2.1.4 Guarantee given by Cordiant Communications Group Plc in favour of the
Security Trustee dated 30 August 2000.
2.1.5 Guarantee given by ICM International Limited in favour of the Security
Trustee dated 30 August 2000.
2.1.6 Guarantee given by The Decision Shop Limited in favour of the Security
Trustee dated 30 August 2000.
2.1.7 Guarantee given by Bates Advertising USA Inc. in favour of the
Security Trustee dated 30 August 2000.
2.1.8 Guarantee given by Bates Churchill Advertising Inc. in favour of the
Security Trustee dated 30 August 2000.
2.1.9 Guarantee given by Bates Churchill Public Relations Inc. in favour of
the Security Trustee dated 30 August 2000.
2.1.10 Guarantee given by Bates Healthworld Inc. in favour of the Security
Trustee dated 30 August 2000.
2.1.11 Guarantee given by Cordiant US Holdings Inc. in favour of the Security
Trustee dated 30 August 2000.
2.1.12 Guarantee given by Bates Worldwide (Delaware) Inc. in favour of the
Security Trustee dated 30 August 2000.
2.1.13 Guarantee given by CCG.XM Inc. in favour of the Security Trustee dated
30 August 2000.
Exhibit 4.12-3
2.1.14 Guarantee given by Falk Healthworld Inc. in favour of the Security
Trustee dated 30 August 2000.
2.1.15 Guarantee given by Healthworld Corporation Inc. in favour of the
Security Trustee dated 30 August 2000.
2.1.16 Guarantee given by Cordiant Communications Group Australia Pty.
Limited in favour of the Security Trustee dated 30 August 2000.
2.1.17 Guarantee given by Bates Deutschland Holdings GmbH in favour of the
Security Trustee dated 30 August 2000.
2.1.18 Guarantee given by Lighthouse Global Network Inc. in favour of the
Security Trustee dated 3 October 2000.
2.1.19 Guarantee given by Fitch Inc. in favour of the Security Trustee dated
3 October 2000.
2.1.20 Guarantee given by Morgen Walke Associates Inc. in favour of the
Security Trustee dated 3 October 2000.
2.1.21 Deed of Cross Guarantee dated 11 September 2000 in favour of the
Overdraft Bank given by the Original Overdraft Borrowers.
2.2 The following guarantees have been provided, and will continue to be
provided, to secure the obligations owing to Noteholders under the
Amended and Restated Note Purchase Agreement ("Existing Noteholder
Guarantees"):
2.2.1 Guarantee given by Cordiant Communications Group Plc in favour of the
Noteholders dated 5 April 2001 (as contained in Section 13 of the
Amended and Restated Note Purchase Agreement).
2.2.2 Guarantee given by Atlas Advertising Limited in favour of the
Noteholders dated 5 April 2001.
2.2.3 Guarantee given by Bates Europe Limited in favour of the Noteholders
dated 5 April 2001.
2.2.4 Guarantee given by Bates UK Limited in favour of the Noteholders dated
5 April 2001.
2.2.5 Guarantee given by ICM International Limited in favour of the
Noteholders dated 5 April 2001.
2.2.6 Guarantee given by The Decision Shop Limited in favour of the
Noteholders dated 5 April 2001.
Exhibit 4.12-4
2.2.7 Guarantee given by Bates Advertising USA Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.8 Guarantee given by Bates Churchill Advertising Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.9 Guarantee given by Bates Churchill Public Relations Inc. in favour of
the Noteholders dated 5 April 2001.
2.2.10 Guarantee given by Bates Healthworld Inc. in favour of the Noteholders
dated 5 April 2001.
2.2.11 Guarantee given by Cordiant US Holdings Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.12 Guarantee given by Bates Worldwide (Delaware) Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.13 Guarantee given by CCG.XM Inc in favour of the Noteholders dated 5
April 2001.
2.2.14 Guarantee given by Falk Healthworld Inc in favour of the Noteholders
dated 5 April 2001.
2.2.15 Guarantee given by Healthworld Corporation Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.16 Guarantee given by Cordiant Communications Group Australia Pty.
Limited in favour of the Noteholders dated 5 April 2001.
2.2.17 Guarantee given by Bates Deutschland Holdings GmbH in favour of the
Noteholders dated 5 April 2001.
2.2.18 Guarantee given by Lighthouse Global Network Inc. in favour of the
Noteholders dated 5 April 2001.
2.2.19 Guarantee given by Fitch Inc. in favour of the Noteholders dated 5
April 2001.
2.2.20 Guarantee given by Morgan Walke Associates Inc. in favour of the
Noteholders dated 5 April 2001.
2.3 The parties to this Memorandum agree that any proceeds received by the
Security Trustee or any other Bank Finance Party or the Noteholders
pursuant to any of the Existing Bank Guarantees or any of the Existing
Noteholder Guarantees (as the case may be) shall be applied in
accordance with the terms of the Intercreditor Agreement.
Exhibit 4.12-5
3 Initial Security Documents
3.1 Subject to and in accordance with the provisions of the Restructuring
Deed, the Credit Agreement, the Amended and Restated Note Purchase
Agreement, the Intercreditor Agreement and the Common Security Trust
Deed the Parent agrees that the guarantee and security documents (the
"Initial Security Documents") and any additional documents set out in
this paragraph 3 shall be executed and delivered to the Common
Security Trustee by the parties thereto (other than the Common
Security Trustee) as a condition precedent to the Restructuring Date
(except for the Australian share pledges set out in paragraph 3.10
which shall be provided as a condition subsequent to the Restructuring
Date not more than 3 Banking Days after the Restructuring Date, and
the provisions of this Memorandum shall be read subject to this
exception).
3.2 Each Initial Security Document shall secure all amounts owing to the
Creditors under or in connection with the Funding Agreements unless
otherwise specifically limited in this paragraph 3 or as limited in
accordance with paragraph 5.2.
3.3 Each Initial Security Document shall be provided together with:
3.3.1 all other documents ancillary thereto necessary (in the sole
discretion of the Common Security Trustee acting in good faith) to
grant in favour of the Common Security Trustee a first priority
perfected security interest in the asset or property intended to be
charged by the relevant Initial Security Document;
3.3.2 such other documents as the Common Security Trustee may require (in
its sole discretion acting in good faith) in connection with the due
execution, delivery, legality, validity, enforceability or
admissibility in evidence of the relevant Initial Security Document
(including, without limitation, directors' certificates, certificates
of incorporation, memorandum and articles of association or other
constitutional documents, board minutes or other corporate or
management resolutions, local law legal opinions, shareholders
resolutions, powers of attorney, companies register of shareholders,
lists of authorised signatories etc.); and
3.3.3 such other document as the Common Security Trustee may require (in its
sole discretion acting in good faith) to protect the interests of the
Creditors under the Funding Agreements and to protect the interests of
the Creditors in connection with the asset or property intended to be
charged by the relevant Initial Security Document.
Exhibit 4.12-6
3.4 Any necessary consents, authorisations, licenses, declarations and
approvals required in connection with the execution, delivery,
validity, enforceability and admissibility in evidence of each Initial
Security Document shall be obtained prior to their execution and a
certified copy of any such shall be provided to the satisfaction of
the Common Security Trustee.
3.5 Any notarisation, filing, recording, registration or enrolment of each
Initial Security Document and any stamp, registration or similar tax
or charge payable on or in relation to each Initial Security Document
necessary in each case to ensure the legality, validity,
enforceability or admissibility in evidence of each Initial Security
Document shall be made or paid as the case may be promptly and within
any time limits stipulated for such matters.
3.6 English Guarantees and Security
3.6.1 A Composite Guarantee and Debenture governed by English law to be
given by the companies listed below (including a guarantee to be given
by, and first ranking fixed and floating charges over all the assets
and undertaking of, each of the companies). The Composite Guarantee
and Debenture will contain a fixed charge over the issued share
capital of each of the companies where its shareholder/s is/are also a
party to the Composite Guarantee and Debenture. However, the charge
over all the assets and undertaking of the company listed at (ww)
below shall not include a charge over its shareholding in Zenith
Optimedia Group Limited until such time as a written consent to such a
charge has been obtained from Publicis Groupe S.A.. In addition, the
charge over all the assets and undertaking of the companies listed at
(a) and (ww) below shall not include a charge over either of their
shareholding in Facilities Group Limited until such time as a written
consent to such a charge has been obtained from Publicis Groupe S.A.
(a) Cordiant Communications Group plc;
(b) Cordiant Group Limited;
(c) Bates Overseas Holdings Limited;
(d) Bates Europe Limited;
(e) Cordiant (US) Holdings Limited;
(f) Garrott Dorland Crawford Holdings Limited;
(g) Atlas Advertising Limited;
Exhibit 4.12-7
(h) Bates UK Limited;
(i) Swotplus Limited;
(j) Deckchair Studio Limited;
(k) Ted Bates Holdings Limited;
(l) The Decision Shop Limited;
(m) Healthworld UK Holdings Limited;
(n) Bates Healthworld Limited;
(o) PSD Associates Limited;
(p) Bamber Forsyth Limited;
(q) Fitch Limited;
(r) Fitch International Limited;
(s) Fitch Worldwide Limited;
(t) Business Communications International Group Limited;
(u) C&FD (Holdings) Limited;
(v) Corporate & Financial Design Limited;
(w) Financial Dynamics Holdings Limited;
(x) Financial Dynamics Limited;
(y) Bulletin International Limited;
(z) Bulletin International (UK) Limited;
(aa) ICM International Limited;
(bb) PCI Livedesign Limited;
(cc) Cordiant Overseas Holdings Limited;
(dd) Cordiant Property Holdings Limited;
(ee) XMSS Limited;
Exhibit 4.12-8
(ff) Colwood Healthworld Limited;
(gg) Fitch Design Consultants Limited;
(hh) Healthworld Holdings Limited;
(ii) Milton Marketing Group Limited;
(jj) Headcount Worldwide Field Marketing Limited;
(kk) Lighthouse Holdings (UK) Limited;
(ll) Clarion Communications PR Limited;
(mm) CCG.XM Holdings Limited;
(nn) CCG.XM;
(oo) Milton Marketing Limited;
(pp) Connect Five Limited;
(qq) Connect Six Limited;
(rr) Propose Two Limited;
(ss) Secure Two Limited;
(tt) Connect One Limited;
(uu) N.A.S.A. 2.0 London Limited;
(vv) Scholz & Friends London Limited;
(ww) Sonic Sun Limited; and
(xx) CCG.XM (UK) Limited.
3.6.2 Healthworld International Holdings Inc. to provide:
(a) an English law share charge over 65% of the issued share capital
of Healthworld Holdings Limited to secure all amounts owing to
the Creditors under or in connection with the Funding Agreements;
and
(b) an English law share charge over the remaining 35% of the. issued
share capital of Healthworld Holdings Limited to secure all
amounts owing to the Creditors under or in connection with
Exhibit 4.12-9
the Funding Agreements except that it shall not secure directly
or indirectly any amounts owing to the Creditors by members of
the Group incorporated in the US under or in connection with the
Funding Agreements.
3.6.3 Lighthouse Global Network Inc. to provide:
(a) an English law share charge over 65% of the issued share capital
of Lighthouse Holdings (UK) Limited to secure all amounts owing
to the Creditors under or in connection with the Funding
Agreements; and
(b) an English law share charge over the remaining 35% of the issued
share capital of Lighthouse Holdings (UK) Limited to secure all
amounts owing to the Creditors under or in connection with the
Funding Agreements except that it shall not secure directly or
indirectly any amounts owing to the Creditors by members of the
Group incorporated in the US under or in connection with the
Funding Agreements.
3.6.4 CCG.XM Holdings Inc. to provide:
(a) an English law share charge over 65% of the issued share capital
of CCG.XM Holdings Limited to secure all amounts owing to the
Creditors under or in connection with the Funding Agreements; and
(b) an English law share charge over the remaining 35% of the issued
share capital of CCG.XM Holdings Limited to secure all amounts
owing to the Creditors under or in connection with the Funding
Agreements except that it shall not secure directly or indirectly
any amounts owing to the Creditors by members of the Group
incorporated in the US under or in connection with the Funding
Agreements.
3.6.5 N.A.S.A. 2.0 GmbH to provide an English law share charge over all of
the issued share capital of N.A.S.A. 2.0 London Limited.
3.6.6 A Composite Guarantee governed by English law to be given by the
companies listed below:
(a) Cordiant US Holdings, Inc.;
(b) Healthworld Corporation.;
(c) Bates Healthworld Inc.;
Exhibit 4.12-10
(d) Healthworld International Holdings Inc.;
(e) Bates Worldwide (Delaware) Inc.;
(f) Bates Advertising USA Inc.;
(g) Bates Churchill Public Relations Inc.;
(h) Bates Churchill Advertising Inc.;
(i) Interactive Edge Inc.;
(j) Lighthouse Global Network Inc.;
(k) Fitch Inc.;
(l) The Leonhardt Group Inc.;
(m) Morgen Walke Associates Inc.;
(n) Primo Angela Inc.;
(o) CCG.XM Holdings Inc.;
(p) CCG.XM Inc.;
(q) Microarts Corporation;
(r) Falk Healthworld Inc.;
(s) The Decision Shop Inc.;
(t) S&S McC AND McC Inc.;
(u) Channelex Inc.;
(v) DWP Bates Technology.;
(w) Cordiant Finance Inc.;
(x) Peclers Paris North America, Inc.;
(y) Drummer Associates Inc.
(z) Cordiant Holdings GmbH;
(aa) Bates Deutschland Holding GmbH;
Exhibit 4.12-11
(bb) Bates Germany Werbeagentur GmbH;
(cc) XCEED! Agentur Fur Medianberatung Und Innovative Kommunikation
GmbH;
(dd) EMC Starke & Gerlach GmbH;
(ee) N.A.S.A. 2.0 GmbH;
(ff) Chafma BV;
(gg) Cordiant Finance B.V.;
(hh) Cordiant Communications (Australia) Pty Limited; and
(ii) Cordiant Communications Group Australia Pty Limited.
3.7 US Security
U.S. pledges over the shares of the companies listed at (a) to (y)
inclusive in paragraph 3.6.6 of this Memorandum.
3.8 German Security
3.8.1 German pledges over the shares of the companies listed at (z) to (ee)
Inclusive in paragraph 3.6.6 of this Memorandum.
3.8.2 An Abstract Acknowledgement of Indebtedness executed by Cordiant
Communications Group plc.
3.9 Dutch Security
3.9.1 Dutch pledges over the shares of the companies listed at (ff) and (gg)
in paragraph 3.6.6 of this Memorandum.
3.9.2 Dutch pledge over Chafma B.V.'s shareholding in Bates Nederland
Holding B.V.
3.9.3 Second ranking Dutch charge over the bank accounts of Cordiant Finance
B.V. with ABN Amro Bank N.V.
3.10 Australian Security
3.10.1 Australian pledge over the shares of Cordiant Communications
(Australia) Pty. Limited.
Exhibit 4.12-12
3.10.2 Australian pledge over Cordiant Communication Group plc's shareholding
in Cordiant Communications Group Australia Pty. Limited.
4 Additional Security Documents
4.1 In accordance with and subject to the Credit Agreement, the Amended
and Restated Note Purchase Agreement, the Intercreditor Agreement and
the Common Security Trust Deed the Parent agrees to procure that
guarantees and security (the "Additional Security Documents") and any
additional documents set out in this paragraph 4 shall be executed and
delivered to the Common Security Trustee by:
(a) each Material Subsidiary (as defined in the Credit Agreement and
the Amended and Restated Note Purchase Agreement) incorporated in
England and Wales, the US, Germany and the Netherlands (each a
"Non-Borrower Material Subsidiary") and by each of its direct and
indirect holding companies (to the extent that such security has
not already been provided by each such Non-Borrower Material
Subsidiary and each such direct or indirect holding company),
subject to the exceptions in paragraph 4.9; and
(b) each Material Subsidiary, wherever it is incorporated, which
executes and delivers to the Agent after the Restructuring Date a
Borrower Accession Agreement or an Overdraft Borrower Accession
Agreement in accordance with clause 18.11 of the Credit Agreement
(each an "Additional Borrower Material Subsidiary") and by each
of its direct and indirect holding companies (to the extent that
such security has not already been provided by each such
Additional Borrower Material Subsidiary and each such direct or
indirect holding company).
4.2 Each Additional Security Document shall secure all amounts owing to
the Creditors under or in connection with the Funding Agreements
unless limited in accordance with paragraph 5.2.
4.3 Each Additional Security Document shall be provided together with:
4.3.1 all other documents ancillary thereto necessary (in the sole
discretion of the Common Security Trustee acting in good faith) to
grant in favour of the Common Security Trustee a first priority
perfected security interest in the asset or property intended to be
charged by the relevant Additional Security Document;
Exhibit 4.12-13
4.3.2 such other documents as the Common Security Trustee may require (in
its sole discretion acting in good faith) in connection with the due
execution, delivery, legality, validity, enforceability or
admissibility in evidence of the relevant Additional Security Document
(including, without limitation, directors' certificates, certificates
of incorporation, memorandum and articles of association or other
constitutional documents, board minutes or other corporate or
management resolutions, local law legal opinions, shareholders
resolutions, powers of attorney, companies register of shareholders,
lists of authorised signatories etc.); and
4.3.3 such other document as the Agent (as defined in the Credit Agreement),
Noteholders or Common Security Trustee may require (in its sole
discretion acting in good faith) to protect the interests of the
Creditors under the Funding Agreements and to protect the interests of
the Creditors in connection with the asset or property intended to be
charged by the relevant Additional Security Document.
4.4 Any necessary consents, authorisations, licenses, declarations and
approvals required in connection with the execution, delivery,
validity, enforceability and admissibility in evidence of each
Additional Security Document shall be obtained prior to their
execution and a certified copy of any such shall be provided to the
satisfaction of the Common Security Trustee.
4.5 Any notarisation, filing, recording, registration or enrolment of each
Additional Security Document and any stamp, registration or similar
tax or charge payable on or in relation to each Additional Security
Document necessary in each case to ensure the legality, validity,
enforceability or admissibility in evidence of each Additional
Security Document shall be made or paid as the case may promptly and
within any time limits stipulated for such matters.
4.6 Guarantees and Security to be provided by Material Subsidiaries
Incorporated In England and Wales
Each Non-Borrower Material Subsidiary and each Additional Borrower
Material Subsidiary incorporated in England and Wales must provide an
English law guarantee and an English law Debenture (charging all of
its assets and undertaking).
4.7 Guarantees and Security to be provided by Material Subsidiaries
incorporated in all jurisdictions (other than England and Wales)
Exhibit 4.12-14
Each Non-Borrower Material Subsidiary incorporated in England and
Wales, the US, Germany and the Netherlands and each Additional
Borrower Material Subsidiary incorporated in a jurisdiction other than
England and Wales must provide an English law guarantee.
4.8 Guarantees and Security to be provided by the direct and Indirect
holding companies of Material Subsidiaries
The immediate holding company of every member of the Group required to
provide security and/or a guarantee pursuant to this paragraph 4
(including this paragraph 4.8) must provide a pledge over the shares
in such member of the Group (governed by the laws of the jurisdiction
in which such member of the Group is formed) and an English law
guarantee and if it is incorporated in England and Wales, an English
law Debenture (charging all of its assets and undertaking).
4.9 Agreed exceptions to the Guarantee and Security Documents to be
provided by Non-Borrower Material Subsidiaries and their holding
companies
4.9.1 Scholz & Friends AG and any of its existing subsidiaries as at the
Restructuring Date that are or become Non-Borrower Material
Subsidiaries are not required to provide guarantees and security in
accordance with this paragraph 3 except where Scholz & Friends AG
becomes a wholly owned subsidiary of the Group.
4.9.2 Bates Nederland Holding BV and any of its existing subsidiaries as at
the Restructuring Date that are or become Non-Borrower Material
Subsidiaries are not required to provide guarantees and security in
accordance with this paragraph 3 except where Bates Nederland Holding
BV becomes a wholly owned subsidiary of the Group.
5 Security Principles
5.1 Subject to the due execution of all relevant Initial Security
Documents and Additional Security Documents, completion of relevant
perfection formalities within statutorily prescribed time limits,
payment of all registration fees and documentary taxes, any other
rights arising by operation of law, obtaining any relevant foreign
legal opinions and subject to any qualifications set out in this
Memorandum, the Restructuring Deed, the Credit Agreement, the Amended
and Restated Note Purchase Agreement, the Intercreditor Agreement and
the Common Security Trust Deed and any relevant foreign legal opinions
obtained and subject further to the security principles set out in
paragraph 4.2, it is further acknowledged that, pursuant to each
Initial
Exhibit 4.12-15
Security Document and each Additional Security Document, the Creditors
shall:
5.1.1 (in the case of those of the Initial Security Documents and Additional
Security Documents containing a guarantee) receive the benefit of a
guarantee by the relevant member of the Group of the payment of all
monies and discharge of all liabilities owing or incurred to the
Creditors under or pursuant to the Funding Agreements (subject to
paragraph 5.2 below);
5.1.2 (in the case of those of the Initial Security Document and Additional
Security Documents creating pledges or charges over shares in a
company or other entity) obtain a first priority valid charge or
analogous or equivalent encumbrance over all of the shares in issue at
any time in that company or other entity to which such Initial
Security Document or Additional Security Document relates and such
Initial Security Document or Additional Security Document shall be
governed by the laws of the jurisdiction in which such company or
entity is formed;
5.1.3 (in the case of those of the Initial Security Documents and Additional
Security Documents creating security over any other property, assets
and/or undertaking) obtain a first priority valid charge or analogous
or equivalent encumbrance over all of such property, assets and/or
undertaking (except for the second ranking Dutch bank account charge
listed at paragraph 3.9.3 above); and
5.1.4 be able, through the agency of the Common Security Trustee as
appropriate, to enforce such security as is created by way of an
Initial Security Document or Additional Security Document without any
restraint from either (i) the constitutional documents of the relevant
Obligor or (ii) any company which is or whose assets are the subject
of such Initial Security Document or Additional Security Document (but
subject to any statutory rights which that company may have to
challenge such enforcement) or (iii) any shareholders of the foregoing
not party to the relevant Initial Security Document or Additional
Security Document.
5.2 It is further agreed that financial assistance, corporate benefit, US
fraudulent preference, thin capitalisation rules and similar
principles of law affecting the rights of creditors or otherwise, and
tax laws which have adverse implications for a member or members of
the Group, and any other issue agreed between the Common Security
Trustee and the Parent (including, without limitation, payment of
stamp duty in a jurisdiction), may limit the ability of a member of
the Group to provide
Exhibit 4.12-16
a guarantee or security or may require that the guarantee or security
be limited by amount or otherwise. If any such limit applies
(including, without limitation, sections 30 and 31 of the German GmbH
Act and section 57 of the German Stock Corporation Act), the security
provided will be limited to the maximum amount which the relevant
member of the Group may provide having regard to applicable law;
6 Miscellaneous
6.1 The parties to this Memorandum agree to negotiate the form of each
Security Document in good faith and will ensure that all documentation
relating to this Memorandum is in a finally agreed form as soon as
reasonably practicable after the date of this Memorandum.
6.2 All parties to a Security Document shall be a party to the Common
Security Trust Deed and the Intercreditor Agreement.
6.3 The Parent shall pay to the Agent (as defined in the Credit Agreement)
and the Noteholders on demand all reasonable expenses (including legal
and out of pocket expenses) incurred by the Agent and the Noteholders,
as relevant, in connection with the negotiation, preparation and
execution of the Security Documents and any other additional documents
required by this Memorandum and any such expenses incurred in
connection with the requirements of paragraphs 3.4, 3.5, 4.4, and 4.5.
6.4 For the avoidance of doubt, in the event of any conflict between the
terms of this Memorandum and the Credit Agreement, the latter shall
prevail.
Exhibit 4.12-17
6.5 This Memorandum shall be governed by English Law.
Dated............ April 2002
By:
- ------------------------------
For and on behalf of
Cordiant Communications Group plc
By:
- ------------------------------
For HSBC Investment Bank plc
as Agent for and on behalf of the Banks
By:
- ------------------------------
For HSBC Investment Bank plc
as Common Security Trustee
Exhibit 4.12-18
SCHEDULE 1.3
Existing Subsidiary Guarantors
The Communications Group Pty Limited
Atlas Advertising Limited
Bates Europe Limited
Bates UK Limited
ICM International Limited
The Decision Shop Limited
Bates Deutschland Holding GmbH
Bates Advertising USA, Inc.
Bates Churchill Advertising, Inc.
Bates Churchill Public Relations, Inc.
Bates Healthworld, Inc.
Bates Travel and Tourism, Inc.
Bates Worldwide (Delaware), Inc.
CCG.XM, Inc.
Cordiant US Holdings, Inc.
Falk Healthworld Inc.
Fitch, Inc.
GHBM Inc.
Healthworld Corporation
Lighthouse Global Network Inc.
Morgen-Walke Associates, Inc.
Schedule 1.3-1
EXHIBIT 9.3.5
Documents to Be Delivered by each additional Subsidiary
Guarantor pursuant to Section 9.3.5
(a) a copy of the memorandum and articles of association and
certificate of incorporation of the Subsidiary Guarantor;
(b) a copy of a resolution of the board of directors of the Subsidiary
Guarantor:
(i) approving the terms of, and the transactions contemplated by,
the Subsidiary Guarantee and resolving that it execute the Subsidiary
Guarantee;
(ii) authorizing a specified person or persons to execute and
deliver the Subsidiary Guarantee; and
(iii) authorizing a specified person or persons on its behalf, to
sign and/or dispatch all documents to be signed and/or dispatched by
it under or in connection with this Agreement and the Subsidiary
Guarantee;
(c) a certificate of a director of the Subsidiary Guarantor certifying
that execution and delivery of the Subsidiary Guarantee would not cause any
borrowing limit binding on it to be exceeded;
(d) a specimen of the signature of each person authorized by the
resolutions referred to in paragraph (b) above;
(e) a certificate of an authorized signatory of the Subsidiary
Guarantor certifying that each document specified in this Exhibit is
correct, complete and in full force and effect; and
(f) an agreement (in form and substance satisfactory to the Majority
Holders) entered into among the holders of the Notes and the other
beneficiaries of guarantees from the Subsidiary Guarantor granted in
connection with the Syndicated Loan Agreement or any Committed Medium-Term
Bank Facilities whereby the existence and validity of the Subsidiary
Guarantee as well as the pari passu ranking of the Subsidiary Guarantee and
such other guarantees is acknowledged and confirmed.
Exhibit 9.3.5-1
SCHEDULE 5.4
SUBSIDIARIES, ETC.
(a) Subsidiaries:
- -------------------------------------------------------------------------------------------------------------------
Entity Jurisdiction of Percentage Group (i) Additional Comments **
Incorporation Ownership *
- -------------------------------------------------------------------------------------------------------------------
Bates Integrated Communications S.A. Argentina 100
- -------------------------------------------------------------------------------------------------------------------
ZMS S.A. Argentina 99.99
- -------------------------------------------------------------------------------------------------------------------
ABKP Ideaworks Pty Limited Australia 74.95
- -------------------------------------------------------------------------------------------------------------------
Advertising Facilities Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld Pty Limited Australia 75.1
- -------------------------------------------------------------------------------------------------------------------
Big Island International Pty Ltd Australia 85
- -------------------------------------------------------------------------------------------------------------------
Black Book Holdings Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Black Book Nominees (Sydney) Pty Australia 100
Limited
- -------------------------------------------------------------------------------------------------------------------
Black Book Nominees Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Consensus Research Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Cordiant Communications (Australia) Australia 100 Guarantor & Material Subsidiary
Pty Ltd
- -------------------------------------------------------------------------------------------------------------------
Cordiant Communications Group Australia 100 Guarantor & Material Subsidiary
Australia Pty Limited
- -------------------------------------------------------------------------------------------------------------------
Cordiant Consulting Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Expanded Investments (W/a) Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
Expanded Media Holdings Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Expanded Media Investments Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Expanded Media Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-1
- -------------------------------------------------------------------------------------------------------------------
George Patterson Properties Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
George Patterson Pty Limited Australia 100 Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
HMA George Patterson Brisbane Pty Australia 100
Limited
- -------------------------------------------------------------------------------------------------------------------
HMA George Patterson Pty Limited Australia 55
- -------------------------------------------------------------------------------------------------------------------
Ideaworks (Holdings) Pty Limited Australia 75.1
- -------------------------------------------------------------------------------------------------------------------
Ideaworks Design Pty Limited Australia 75.1
- -------------------------------------------------------------------------------------------------------------------
Ideaworks Environmental Design Pty Australia 75.1
Limited
- -------------------------------------------------------------------------------------------------------------------
Ideaworks Media Pty Limited Australia 74.95
- -------------------------------------------------------------------------------------------------------------------
Ideaworks Recruitment Pty Ltd Australia 75.1
- -------------------------------------------------------------------------------------------------------------------
Isis Design Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
Jamieson House Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Pathfinder Strategies Pty Limited Australia 51
- -------------------------------------------------------------------------------------------------------------------
Professional Public Relations Pty Australia 85
Limited
- -------------------------------------------------------------------------------------------------------------------
Razor TV Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Retail One Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
The Direct Bond Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
The Media Palace Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
Underline Design Group Pty Limited Australia 51
- -------------------------------------------------------------------------------------------------------------------
X/M Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
XMPS Holdings Pty Ltd Australia 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Pty Limited Australia 100
- -------------------------------------------------------------------------------------------------------------------
AHA Puttner Bates Werbeagentur GMBH Austria 60
- -------------------------------------------------------------------------------------------------------------------
Chafma Belgium BVBA Belgium 100
- -------------------------------------------------------------------------------------------------------------------
LDV Bates N.V. Belgium 55
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Brussels S.A/ N.V. Belgium 77.29
- -------------------------------------------------------------------------------------------------------------------
Bates Latin America Holdings Ltda Brazil 99.99
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-2
- -------------------------------------------------------------------------------------------------------------------
Newcomm Bates Comunicacao Integrada
Ltda Brazil 50.99
- -------------------------------------------------------------------------------------------------------------------
Newcomm Propaganda e Producoes Ltda Brazil 50.22
- -------------------------------------------------------------------------------------------------------------------
One Four One Brasil Ltda Brazil 50.97
- -------------------------------------------------------------------------------------------------------------------
141 (Cambodia) Ltd Cambodia 100
- -------------------------------------------------------------------------------------------------------------------
Bates Cambodia Ltd Cambodia 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media (Cambodia) Ltd Cambodia 100
- -------------------------------------------------------------------------------------------------------------------
Bates Canada Inc. Canada 100
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld (Canada) Inc Canada 100
- -------------------------------------------------------------------------------------------------------------------
Bates & Partners Publicidad S.A. Chile 65.03
- -------------------------------------------------------------------------------------------------------------------
Bates China (Dahua) Limited China 100
- -------------------------------------------------------------------------------------------------------------------
Pelerdon Holdings Limited Cyprus 51
- -------------------------------------------------------------------------------------------------------------------
Bates Praha s.r.o. Czech Republic 100
- -------------------------------------------------------------------------------------------------------------------
InterCom Praha, agentura pro Czech Republic 80
marketing, komunikaci a sponzoring,
spol. s.r.o.
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Praha s.r.o. Czech Republic 77.29
- -------------------------------------------------------------------------------------------------------------------
Added Value Design Aps Denmark 100
- -------------------------------------------------------------------------------------------------------------------
Bates A/S (Denmark) Denmark 60
- -------------------------------------------------------------------------------------------------------------------
Bates Gruppen A/S (Denmark) Denmark 100
- -------------------------------------------------------------------------------------------------------------------
Fitch Kobebhavn A/S Denmark 100
- -------------------------------------------------------------------------------------------------------------------
Ide Repro Aps Denmark 60
- -------------------------------------------------------------------------------------------------------------------
Idea Import Aps Denmark 60
- -------------------------------------------------------------------------------------------------------------------
Norgaard Bates Holding I/S Denmark 53.75
- -------------------------------------------------------------------------------------------------------------------
Norgaard Mikkelsen GmbH Denmark 60
- -------------------------------------------------------------------------------------------------------------------
One Four One Denmark I/S Denmark 55
- -------------------------------------------------------------------------------------------------------------------
141 Blue Skies Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Atlas Advertising Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bamber Forsyth Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Communications Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Integrated Communications Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Bates Overseas Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-3
- -------------------------------------------------------------------------------------------------------------------
Bates UK Limited England 100 Guarantor, Borrower & Material
Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bulletin International Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bulletin International UK Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Business Communications International
Group Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
C & F D (Holdings) Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
CCG.XM England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
CCG.XM Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Clarion Communications (Corporate England 100
P.R.) Limited
- -------------------------------------------------------------------------------------------------------------------
Clarion Communications (P.R.) Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Colwood Healthworld Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Connect Five Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Connect One Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Connect Six Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant (US) Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Communications Group plc England N/A Parent, Guarantor, Borrower &
Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Communications Group
Trustees Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Cordiant Group Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Overseas Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Property Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Corporate & Financial Design Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Effective Sales Personnel Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Euromedia Express Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Financial Dynamics Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Financial Dynamics Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Fitch Design Consultants Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Fitch International Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Fitch Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Fitch Worldwide Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-4
- -------------------------------------------------------------------------------------------------------------------
Freshname No. 301 Limited England 100
- -------------------------------------------------------------------------------------------------------------------
Headcount Interim Solutions Ltd England 100
- -------------------------------------------------------------------------------------------------------------------
Headcount Worldwide Field Marketing England 100 Guarantor & Material Subsidiary
Limited
- -------------------------------------------------------------------------------------------------------------------
Healthworld Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Healthworld UK Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Herman Beasley Advertising Limited England 77.29
- -------------------------------------------------------------------------------------------------------------------
ICM International Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Lighthouse Holdings (UK) Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Milton Marketing Group Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Milton Marketing Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Milton Public Relations Limited England 100
- -------------------------------------------------------------------------------------------------------------------
N.A.S.A.2.0 London Limited England 85 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
PCI LiveDesign Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Pci:Live Limited England 100
- -------------------------------------------------------------------------------------------------------------------
PDM Communications Limited England 100
- -------------------------------------------------------------------------------------------------------------------
PSD Associates Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS London Limited England 77.29 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Secure Two Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Sonic Sun Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Swot Plus Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Ted Bates Holdings Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
The Decision Shop Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Ultimate Events Limited England 100
- -------------------------------------------------------------------------------------------------------------------
XMSS Limited England 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Finland Oy Finland 100
- -------------------------------------------------------------------------------------------------------------------
141 France SA France 80
- -------------------------------------------------------------------------------------------------------------------
Bates France SA France 99.98
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld S.A. France 80.04
- -------------------------------------------------------------------------------------------------------------------
Bates SA France 99.96
- -------------------------------------------------------------------------------------------------------------------
Fitch France 100
- -------------------------------------------------------------------------------------------------------------------
Fitch Vendome France 100
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-5
- -------------------------------------------------------------------------------------------------------------------
HFT SA France 80
- -------------------------------------------------------------------------------------------------------------------
Katchina Production SARL France 80
- -------------------------------------------------------------------------------------------------------------------
Morgen-Walke Europe S.A. France 100
- -------------------------------------------------------------------------------------------------------------------
n.a.s.a. Paris S.A.R.L. France 100
- -------------------------------------------------------------------------------------------------------------------
Peclers Paris SA France 100
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Paris S.A.R.L. France 77.29
- -------------------------------------------------------------------------------------------------------------------
141 Germany GmbH Germany 100
- -------------------------------------------------------------------------------------------------------------------
AdServ Agentur fur Marketing GmbH Germany 80
& Co KG
- -------------------------------------------------------------------------------------------------------------------
Bates Deutschland Holding GmbH Germany 100 Guarantor, Borrower & Material
Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Germany Werbeagentur GmbH Germany 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
BOENIG & YAMAOKA International Public Germany 80
Relations GmbH
- -------------------------------------------------------------------------------------------------------------------
Cordiant Holdings GmbH Germany 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Customer Focus Agentur fur Germany 80
Handelsmarketing GmbH
- -------------------------------------------------------------------------------------------------------------------
einszueins Kommunikation & Dialog GmbH Germany 80
- -------------------------------------------------------------------------------------------------------------------
Imagerefinery GmbH Germany 61.83
- -------------------------------------------------------------------------------------------------------------------
InterBates Beteiligungsges mbh Germany 100
- -------------------------------------------------------------------------------------------------------------------
InterCom Customer Relations GmbH & Germany 80
Co KG
- -------------------------------------------------------------------------------------------------------------------
InterCom Management GmbH Germany 80
- -------------------------------------------------------------------------------------------------------------------
InterCom Management GmbH & Co
Holding KG Germany 80
- -------------------------------------------------------------------------------------------------------------------
Live Line Entertainment GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
Metagate GmbH Germany 61.83
- -------------------------------------------------------------------------------------------------------------------
n.a.s.a 2.0 GmbH Germany 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Network Atlas GmbH Germany 100
- -------------------------------------------------------------------------------------------------------------------
Plato GmbH Germany 64.92
- -------------------------------------------------------------------------------------------------------------------
Scholz & Friends AG Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Berlin GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Brand Affairs
GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Consulting AG Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-6
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Group GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Hamburg GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS International GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS NeuMarkt GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Wien GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
United Visions GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
United Visions Interactive Service Germany 77.29
GmbH
- -------------------------------------------------------------------------------------------------------------------
United Visions Media Services GmbH Germany 77.29
United Visions TV und Film Produktion
GmbH Hamburg Germany 80
- -------------------------------------------------------------------------------------------------------------------
United Visions TV und Film
Produktionsgesellschaft mbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
UV Interactive Entertainment GmbH Germany 77.29
- -------------------------------------------------------------------------------------------------------------------
XCEED! Agentur fur Medienberatung und Germany 100 Guarantor & Material Subsidiary
innovative Kommikation GmbH
- -------------------------------------------------------------------------------------------------------------------
Bates Hellas Advertising S.A. Greece 100
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Athens S.P.LL.C. Greece 77.29
- -------------------------------------------------------------------------------------------------------------------
141 Limited (Hong Kong) Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
Bates China Limited Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
Bates Hong Kong Limited Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
Bates Worldwide Limited (Hong Kong) Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
bgx Limited (Hong Kong) Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
CCG.XM Limited (Hong Kong) Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Limited (Hong Kong) Hong Kong 100
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Budapest Kft Hungary 77.29
- -------------------------------------------------------------------------------------------------------------------
Bates India Private Limited India 99.99
- -------------------------------------------------------------------------------------------------------------------
Bates Investment India Private Limited India 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Private Limited (India) India 100
- -------------------------------------------------------------------------------------------------------------------
PT. Bates Mulia Indonesia Indonesia 100
- -------------------------------------------------------------------------------------------------------------------
141 Network Limited Ireland 100
- -------------------------------------------------------------------------------------------------------------------
Bates Ireland (Advertising) Limited Ireland 100
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-7
- -------------------------------------------------------------------------------------------------------------------
Bates Ireland Advertising Group Ireland 100
Limited
- -------------------------------------------------------------------------------------------------------------------
Gallagher & Kelly Public Relations Ireland 100
Limited
- -------------------------------------------------------------------------------------------------------------------
Hunter Productions (Dublin) Limited Ireland 100
- -------------------------------------------------------------------------------------------------------------------
Imagecom Graphics Limited Ireland 100
- -------------------------------------------------------------------------------------------------------------------
Pembroke Publicity Limited Ireland 100
- -------------------------------------------------------------------------------------------------------------------
Atlas SRL Italy 77
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld Srl Italy 70
- -------------------------------------------------------------------------------------------------------------------
Bates Italia SPA Italy 100
- -------------------------------------------------------------------------------------------------------------------
Clarion srl Italy 100
- -------------------------------------------------------------------------------------------------------------------
Lorien Consulting SRL Italy 51
- -------------------------------------------------------------------------------------------------------------------
One Four One Italia SRL Italy 100
- -------------------------------------------------------------------------------------------------------------------
Bates Yomiko Inc. Japan 51
- -------------------------------------------------------------------------------------------------------------------
Cordiant Holdings Japan, K.K. Japan 100
- -------------------------------------------------------------------------------------------------------------------
Corplan K.K. Japan 100
- -------------------------------------------------------------------------------------------------------------------
IBI KK Japan 100
- -------------------------------------------------------------------------------------------------------------------
International Business Information K.K. Japan 100
- -------------------------------------------------------------------------------------------------------------------
Diamond Ad. Limited Korea, Republic of 80 Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Art & Magic Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
Bates (Malaysia) Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
Equinox Communications Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
One Four One (Malaysia) Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
Underline Design Group (M) Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
XM Expanded Media Sdn Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Services (M) Sdn. Bhd Malaysia 51
- -------------------------------------------------------------------------------------------------------------------
141 Worldwide S.A. de C.V. Mexico 99.99
- -------------------------------------------------------------------------------------------------------------------
Bates Myanmar Limited Myanmar 100
- -------------------------------------------------------------------------------------------------------------------
One Four One Limited Myanmar 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Limited Myanmar 99.86
- -------------------------------------------------------------------------------------------------------------------
141 Amsterdam BV Netherlands 65
- -------------------------------------------------------------------------------------------------------------------
Akron Reclame En Marketing B.V. Netherlands 65
- -------------------------------------------------------------------------------------------------------------------
Bates Nederland Holding BV Netherlands 65
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-8
- -------------------------------------------------------------------------------------------------------------------
Bates Not Just Film B.V. Netherlands 65
- -------------------------------------------------------------------------------------------------------------------
CCG.XM Benelux B.V. Netherlands 100
- -------------------------------------------------------------------------------------------------------------------
Chafma B.V. Netherlands 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Finance BV Netherlands 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Holdings BV Netherlands 100
- -------------------------------------------------------------------------------------------------------------------
Healthworld BV Netherlands 95.08
- -------------------------------------------------------------------------------------------------------------------
Loendersloot B.V. Netherlands 100
- -------------------------------------------------------------------------------------------------------------------
Promotion Makers B.V. Netherlands 65
- -------------------------------------------------------------------------------------------------------------------
Bates New Zealand Limited New Zealand 100
- -------------------------------------------------------------------------------------------------------------------
Professional Public Relations NZ New Zealand 100
Holdings Limited
- -------------------------------------------------------------------------------------------------------------------
The Communications Group Limited New Zealand 100
- -------------------------------------------------------------------------------------------------------------------
Av-Kontakt AS Norway 100
- -------------------------------------------------------------------------------------------------------------------
Bates AS (Norway) Norway 100
- -------------------------------------------------------------------------------------------------------------------
Bates Production AS Norway 100
- -------------------------------------------------------------------------------------------------------------------
Bates-gruppen AS Norway) Norway 100
- -------------------------------------------------------------------------------------------------------------------
Kontoret Reklamebyra AS Norway 100
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Norge AS Norway 100
- -------------------------------------------------------------------------------------------------------------------
Bates Peru S.A. Peru 80
- -------------------------------------------------------------------------------------------------------------------
One Four One Inc Philippines 99.69
- -------------------------------------------------------------------------------------------------------------------
141 Testardo PR sp. z.o.o. Poland 60
- -------------------------------------------------------------------------------------------------------------------
Bates Poland Sp. z.o.o Poland 100
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS WARSZAWA Sp z.o.o Poland 77.29
- -------------------------------------------------------------------------------------------------------------------
Testardo Bates Sp. Z.o.o. Poland 60
- -------------------------------------------------------------------------------------------------------------------
Bates Portugal-Publicidade E Marketing, Portugal 76
LDA
- -------------------------------------------------------------------------------------------------------------------
Bates Romania SRL Romania 51
- -------------------------------------------------------------------------------------------------------------------
Thistle Field Marketing Limited Scotland 100
- -------------------------------------------------------------------------------------------------------------------
Bates Indochina Pte Ltd Singapore 100
- -------------------------------------------------------------------------------------------------------------------
Bates Singapore Pte Ltd Singapore 100
- -------------------------------------------------------------------------------------------------------------------
Bulletin International Pte Limited Singapore 100
- -------------------------------------------------------------------------------------------------------------------
CCG.XM Pte Ltd Singapore 100
- -------------------------------------------------------------------------------------------------------------------
One Four One Design Pte Ltd Singapore 100
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-9
- -------------------------------------------------------------------------------------------------------------------
One Four One Singapore Pte Limited Singapore 100
- -------------------------------------------------------------------------------------------------------------------
SCHOLZ & FRIENDS Singapore Pte Limited Singapore 77.29
- -------------------------------------------------------------------------------------------------------------------
Zenith Media Indochina Pte Ltd Singapore 100
- -------------------------------------------------------------------------------------------------------------------
Bates 141 (Pty) Limited South Africa 90
- -------------------------------------------------------------------------------------------------------------------
Blgk Bates (Proprietary) Limited South Africa 100
- -------------------------------------------------------------------------------------------------------------------
Grapplegroup 141 (Proprietary) Limited South Africa 95.99
- -------------------------------------------------------------------------------------------------------------------
Harrison Human Bates Limited South Africa 78.74
- -------------------------------------------------------------------------------------------------------------------
Interactive Edge (Pty) Limited South Africa 90
- -------------------------------------------------------------------------------------------------------------------
141 Camarote SL Spain 100
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld, S.L. Spain 100
- -------------------------------------------------------------------------------------------------------------------
BSB Publicidad Asturias, SL Spain 51
- -------------------------------------------------------------------------------------------------------------------
BSB Publicidad Las Palmas S L Spain 100
- -------------------------------------------------------------------------------------------------------------------
BSB Publicidad Tenerife, S.L. Spain 51
- -------------------------------------------------------------------------------------------------------------------
BSB Publicidad, S.A. Spain 100
- -------------------------------------------------------------------------------------------------------------------
BSB Rodergas y Asociados S A Spain 100
- -------------------------------------------------------------------------------------------------------------------
Cordiant Advertising Holding SA Spain 100
- -------------------------------------------------------------------------------------------------------------------
Customer Focus S.L. Spain 80
- -------------------------------------------------------------------------------------------------------------------
Delvico 2in SL Spain 75
- -------------------------------------------------------------------------------------------------------------------
Delvico Bates Barcelona, S.A. Spain 100
- -------------------------------------------------------------------------------------------------------------------
Delvico Bates S.A. Spain 100
- -------------------------------------------------------------------------------------------------------------------
Digital Bates, S.L. Spain 51
- -------------------------------------------------------------------------------------------------------------------
ESC - SCHOLZ & FRIENDS Madrid S.A. Spain 53.38
- -------------------------------------------------------------------------------------------------------------------
AB Frigga Sweden 100
- -------------------------------------------------------------------------------------------------------------------
Adaptus International Stockholm AB Sweden 100
- -------------------------------------------------------------------------------------------------------------------
Added Value Design AB Sweden 100
- -------------------------------------------------------------------------------------------------------------------
Bates Sweden AB Sweden 100
- -------------------------------------------------------------------------------------------------------------------
Old Bates AB Sweden 100
- -------------------------------------------------------------------------------------------------------------------
Bates Taiwan Co. Ltd Taiwan Province 99.99
of China
- -------------------------------------------------------------------------------------------------------------------
141 (Thailand) Co Limited Thailand 99.93
- -------------------------------------------------------------------------------------------------------------------
Bates (Thailand) Co Limited Thailand 50.47
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-10
- -------------------------------------------------------------------------------------------------------------------
AAD:fitch, Inc. USA,Arizona 100
- -------------------------------------------------------------------------------------------------------------------
Almost Real, Inc. USA,Delaware 100
- -------------------------------------------------------------------------------------------------------------------
Bates Advertising USA, Inc. USA,New York 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Churchill Advertising, Inc. USA Texas 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Churchill Public Relations, Inc. USA, Texas 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Healthworld, Inc. USA, New York 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Worldwide (Delaware), Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Bates Worldwide, Inc. USA, Delaware 100
- -------------------------------------------------------------------------------------------------------------------
Black Cat Graphics Inc. USA, New York 100
- -------------------------------------------------------------------------------------------------------------------
Bulletin International Inc. USA, New York 100
- -------------------------------------------------------------------------------------------------------------------
Calla Music, Inc. USA, New York 100
- -------------------------------------------------------------------------------------------------------------------
CCG.XM Holdings, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
CCG.XM, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Channelex, Inc. USA, New York 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant Finance, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Cordiant US Holdings, Inc. USA, Delaware 100 Guarantor, Borrower & Material
Subsidiary
- -------------------------------------------------------------------------------------------------------------------
DWP Bates Technology LLC USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Falk Healthworld Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Fitch Inc. USA, Ohio 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Headcount LLC USA, Delaware 100
- -------------------------------------------------------------------------------------------------------------------
Healthworld Corporation USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Healthworld International Holdings Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
HGH Limited USA, Delaware 100
- -------------------------------------------------------------------------------------------------------------------
Ideascope Associates, Inc. USA, Massachusettes 100
- -------------------------------------------------------------------------------------------------------------------
Interactive Edge, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Lighthouse Global Network, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Medical Education Technologies Inc. USA, New York 100
- -------------------------------------------------------------------------------------------------------------------
MicroArts Corporation USA, New Hampshire 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Schedule 5.4-11
- -------------------------------------------------------------------------------------------------------------------
Morgen-Walke Associates, Inc. USA, New York 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Orion Marketing Alliance, Inc. USA, Delaware 100
- -------------------------------------------------------------------------------------------------------------------
PCM :fitch,Inc. USA, Arizona 100
- -------------------------------------------------------------------------------------------------------------------
Peclers Paris North America, Inc. USA, Delaware 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Primo Angeli Inc. USA, California 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
Ted Bates Worldwide, Inc. USA, New York 100
- -------------------------------------------------------------------------------------------------------------------
The Decision Shop, Inc. USA, New York 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
The Leonhardt Group, Inc. USA, Washington 100 Guarantor & Material Subsidiary
- -------------------------------------------------------------------------------------------------------------------
TLG Print Services, Inc. USA, Washington 100
- -------------------------------------------------------------------------------------------------------------------
One Four One Vietnam Limited Viet Nam 100
- -------------------------------------------------------------------------------------------------------------------
* Percentage of voting share capital held by members of the Group
** Determination of Material Subsidiaries, as defined, has been based on 2001 audited financial statements of
each such subsidiary and the Group respectively.
Schedule 5.4-12
(b) Affiliates
- -----------------------------------------------------------------------------------------------------------
Entity Jurisdiction of Percentage Group
Incorporation Ownership
- -----------------------------------------------------------------------------------------------------------
Ad Selective S.A. Argentina 50
- -----------------------------------------------------------------------------------------------------------
Blood Sweat & Tears Creative Communications Pty Limited Australia 49
- -----------------------------------------------------------------------------------------------------------
DesignOne Productions Pty Ltd Australia 50
- -----------------------------------------------------------------------------------------------------------
e media works Limited Australia 50
- -----------------------------------------------------------------------------------------------------------
InSync Communications Pty Ltd Australia 50
- -----------------------------------------------------------------------------------------------------------
Knockout Solutions Limited Australia 50
- -----------------------------------------------------------------------------------------------------------
Marketforce Advertising Limited Australia 50
- -----------------------------------------------------------------------------------------------------------
Marketforce Limited Australia 50
- -----------------------------------------------------------------------------------------------------------
Redline Marketing Studio Pty Ltd Australia 50
- -----------------------------------------------------------------------------------------------------------
Newdesign Belo Horizonte Ltda Brazil 20.38
- -----------------------------------------------------------------------------------------------------------
Newdesign Participacoes Ltda Brazil 25.48
- -----------------------------------------------------------------------------------------------------------
Newdesign Sao Paulo Ltda Brazil 25.48
- -----------------------------------------------------------------------------------------------------------
Interscreen, s r.o Czech Republic 36
- -----------------------------------------------------------------------------------------------------------
Schedule 5.4-13
- -----------------------------------------------------------------------------------------------------------
e2e Factory AS Denmark 21.5
- -----------------------------------------------------------------------------------------------------------
Soul Factory Denmark 49
- -----------------------------------------------------------------------------------------------------------
Norgaard Mikkelsen Reklame Bureau A/S Denmark 50
- -----------------------------------------------------------------------------------------------------------
Zenith Optimedia Group Limited England 25
- -----------------------------------------------------------------------------------------------------------
The Facilities Group Limited England 30
- -----------------------------------------------------------------------------------------------------------
Communicator One Limited England 31.91
- -----------------------------------------------------------------------------------------------------------
Softmedia Limited England 40
- -----------------------------------------------------------------------------------------------------------
deep blue networks AG Germany 23.19
- -----------------------------------------------------------------------------------------------------------
John Warning Corporate Communications GmbH Germany 24.73
- -----------------------------------------------------------------------------------------------------------
Lentz Entertainment GmbH Germany 28.6
- -----------------------------------------------------------------------------------------------------------
InterScreen GmbH Training fur Vertrieb und Service Germany 36
- -----------------------------------------------------------------------------------------------------------
Appel Grafik Berlin GmbH Germany 39.42
- -----------------------------------------------------------------------------------------------------------
Ahrens and Behrent, Financial Dynamics GmbH Germany 50
- -----------------------------------------------------------------------------------------------------------
Advanced Media Services S.A. Greece 50
- -----------------------------------------------------------------------------------------------------------
Diamond Bates Korea Co., Ltd. Korea, Republic of 40
- -----------------------------------------------------------------------------------------------------------
Vision Splended New Zealand 30
- -----------------------------------------------------------------------------------------------------------
141 Romania SRL Romania 45.9
- -----------------------------------------------------------------------------------------------------------
Bates VIAG Saatchi & Saatchi Advertisng Russian Federation 20
- -----------------------------------------------------------------------------------------------------------
GE/Fitch Singapore pte Ltd Singapore 49
- -----------------------------------------------------------------------------------------------------------
Fitch Tropical Pte Ltd Singapore 50
- -----------------------------------------------------------------------------------------------------------
Talk Bates (Proprietary) Limited South Africa 26
- -----------------------------------------------------------------------------------------------------------
Norgaard Mikkelsen AB Sweden 35.61
- -----------------------------------------------------------------------------------------------------------
Power Response Advertising Limited Thailand 48.97
- -----------------------------------------------------------------------------------------------------------
Bates Pan Gulf LLC United Arab Emirates 40
- -----------------------------------------------------------------------------------------------------------
Polymer Solutions, Inc. USA, Delaware 50
- -----------------------------------------------------------------------------------------------------------
Media 2000 Limited Virgin Islands, US 20
- -----------------------------------------------------------------------------------------------------------
Schedule 5.4-14
Directors & Officers of Cordiant Communications Group plc:
- --------------------------------------------------------------------------------
Name Position
- --------------------------------------------------------------------------------
Directors: Mr. Charles Thomas Scott Chairman
- --------------------------------------------------------------------------------
Mr. Michael Bungey Chief Executive Officer
- --------------------------------------------------------------------------------
Mr. Arthur Edward D'Angelo Finance Director
- --------------------------------------------------------------------------------
Mr. Jean de Yturbe Executive Director
- --------------------------------------------------------------------------------
Mr. Peter Martin Schoning Executive Director
- --------------------------------------------------------------------------------
Mr. John Dudley Fishburn Non-executive Director
- --------------------------------------------------------------------------------
Dr. Rolf Wilhelm Stomberg Non-executive Director
- --------------------------------------------------------------------------------
Mr. James Michael Tyrrell Non-executive Director
- --------------------------------------------------------------------------------
Officers: Miss Denise Williams Company Secretary
- --------------------------------------------------------------------------------
Mr. Andrew Kenneth Boland Deputy Finance Director
- --------------------------------------------------------------------------------
Schedule 5.4-15
Affiliates:
- ------------------------------------------------------------------------------------------------------------------
Entity Jurisdiction of Percentage Group Additional Comments
Incorporation Ownership
- ------------------------------------------------------------------------------------------------------------------
Ad Selective S.A. Argentina 50
- ------------------------------------------------------------------------------------------------------------------
Blood Sweat & Tears Creative Australia 49
Communications Pty Limited
- ------------------------------------------------------------------------------------------------------------------
Colors Pty Limited Australia 40
- ------------------------------------------------------------------------------------------------------------------
Softmedia Limited England 40
- ------------------------------------------------------------------------------------------------------------------
The Facilities Group Limited England 30
- ------------------------------------------------------------------------------------------------------------------
Zenith Media Holdings Limited England 50
- ------------------------------------------------------------------------------------------------------------------
Deep Blue Networks AG Germany 34.48
- ------------------------------------------------------------------------------------------------------------------
InterScreen GmbH Training fur Vertrieb Germany 45
und Service
- ------------------------------------------------------------------------------------------------------------------
John Warning Corporate Communications GmbH Germany 40
- ------------------------------------------------------------------------------------------------------------------
Advanced Media Services S.A. Greece 50
- ------------------------------------------------------------------------------------------------------------------
Equinox Communications Limited Hong Kong 50
- ------------------------------------------------------------------------------------------------------------------
Diamond Bates Korea Co., Limited Korea, Republic of 40
- ------------------------------------------------------------------------------------------------------------------
Bates Levant SAL Lebanon 20
- ------------------------------------------------------------------------------------------------------------------
Bates VIAG Saatchi & Saatchi Advertisng Russian Federation 20
- ------------------------------------------------------------------------------------------------------------------
Fitch Tropical Pte Ltd Singapore 50
- ------------------------------------------------------------------------------------------------------------------
GE/Fitch Singapore pte Ltd Singapore 49
- ------------------------------------------------------------------------------------------------------------------
Penta Communications Services (PTY) South Africa 29
Limited
- ------------------------------------------------------------------------------------------------------------------
Bates (Thailand) Co Limited Thailand 49
- ------------------------------------------------------------------------------------------------------------------
Power Response Limited Thailand 49
- ------------------------------------------------------------------------------------------------------------------
Bates Pan Gulf LLC United Arab Emirates 30
- ------------------------------------------------------------------------------------------------------------------
Polymer Solutions, Inc USA, Delaware 50
- ------------------------------------------------------------------------------------------------------------------
Media 2000 Limited Virgin Islands, U.S. 20
- ------------------------------------------------------------------------------------------------------------------
Schedule 5.4-16
Directors & Officers of Cordiant Communications Group plc:
- --------------------------------------------------------------------------------
Name Position
- --------------------------------------------------------------------------------
Directors: Mr. Charles Thomas Scott Chairman
- --------------------------------------------------------------------------------
Mr. Michael Bungey Chief Executive Officer
- --------------------------------------------------------------------------------
Mr. Arthur Edward D'Angelo Finance Director
- --------------------------------------------------------------------------------
Mr. Jean de Yturbe Executive Director
- --------------------------------------------------------------------------------
Mr. Peter Martin Schoning Executive Director
- ------------------------------------------------------------------------------
Mr. Ian Lindsay Smith Executive Director
- --------------------------------------------------------------------------------
Mr. William J Whitehead Executive Director
- --------------------------------------------------------------------------------
Mr. John Dudley Fishburn Non-executive Director
- --------------------------------------------------------------------------------
Prof. Theodore Levitt Non-executive Director
- --------------------------------------------------------------------------------
Dr. Rolf Willhelm Stomberg Non-executive Director
- --------------------------------------------------------------------------------
Mr. James Michael Tyrell Non-executive Director
- --------------------------------------------------------------------------------
Officers: Miss Denise Williams Company Secretary
- --------------------------------------------------------------------------------
Mr. Andrew Boland Deputy Finance Director
- --------------------------------------------------------------------------------
Schedule 5.4-17
SCHEDULE 5.5
Financial Statements
2001 Interim Results
2000 Annual Report
1999 Annual Report
1998 Annual Report
1997 Annual Report
Schedule 5.5-1
Schedule 5.15
EXISTING INDEBTEDNESS
See attached.
* to be repaid using the proceeds of the note issue.
** notional gross principal of derivative contracts.
Schedule 5.15.-1
Schedule 9.1.12
Preference shares issued by (or to be issued)
by Lighthouse Global Network Inc. and its Subsidiaries as Deferred Consideration
Jurisdiction Entity or Date Maximum Deferred Consideration End Date
business Deferred (on or
acquired Consideration before)
(approximate
figure)
USA Leonhardt 28.10.1999 $4,500,000 6% convertible 3 yrs or 5 yrs
preferred stock of from closing
Lighthouse
USA Interiors for 29.11.1999 $4,000,000 6% convertible 3 yrs or 5yrs
Architecture/ preferred stock of from closing
Associates in Lighthouse
Architecture
and Design
USA Avid 06.01.2000 $2,000,000 6% convertible 31.12.2002
Productions preferred stock of and
Lighthouse 31.12.2004
UK C&FD 06.11.2000 (pound)585,000 5850 redeemable 31.12.2004
preference shares in
Lighthouse Holdings
UK Limited - can be
exchanged for 6%
convertible preferred
stock of Lighthouse
USA Morgen-Walke 12.01.2000 $5,250,000 6% convertible 31.12.2002 and
preferred stock of 31.12.2002
Lighthouse
USA Ideascope 07.02.2000 $3,500,000 6% convertible 3 yrs after
preferred stock of closing
Lighthouse
UK Clarion 10.03.2000 (pound)339,000 plus 9870 preference 31.12.2002
(pound)987,000 to be shares in Lighthouse
satisfied by Holdings UK Limited -
issue of 9870 can be exchanged into
preference 6% convertible
shares preferred stock of
Lighthouse
USA Wang 02.03.2000 $100,000 6% convertible 31.12.2002
preferred stock of
Lighthouse
USA Fantastic 04.03.1999 $1,675,000 6% convertible 04.03.2004
Sports plus interest preferred stock of
Lighthouse
USA Primo Angeli 25.06.1999 $3,150,000 6% convertible 01.07.2004
plus interest preferred stock of
and dividends Lighthouse
Schedule 9.1.12-1
USA Davidson 07.07.1999 $3,000,000 6% convertible 31.05.2003
preferred stock of
Lighthouse
UK Financial 23.07.1999 (pound)11,200,000 6% convertible 31.12.2002
Dynamics preferred stock of
Lighthouse
Schedule 9.1.12-2
Schedule 9.1.14
CASH POOLING ARRANGEMENTS
Cash Pooling Arrangements in Germany with
Deutsche Bank AG and between Scholz &
Friends AG and its Subsidiaries
existing at the Effective Date with
are incorporated in Germany.
Schedule 9.1.14-1
Schedule 10.1.1
PERMITTED ENCUMBRANCES
- ------------------------------------------------------------------------------------------------------------------------
Country Company Currency Amount Description
- ------------------------------------------------------------------------------------------------------------------------
China Bates China HKD 835,000 Cash collateral to secure rental
agreement
- ------------------------------------------------------------------------------------------------------------------------
France Bates France FRF 1,073,000 Cash collateral to secure rental
guarantee
- ------------------------------------------------------------------------------------------------------------------------
Greece Bates Hellas GRD 50,000,000 Charge on accounts receivable re Xios
bank facility
- ------------------------------------------------------------------------------------------------------------------------
Greece Bates Hellas GRD 75,000,000 Post dated bills re guarantee facility
provided by Xios Bank (renamed Piraeus)
- ------------------------------------------------------------------------------------------------------------------------
India Bates India Ltd INR 25,000,000 Hypothecation of book debts and
equitable mortgage of properties for
bank facilities granted by both HSBC
and Nedungadi Bank (was 75m INR)
- ------------------------------------------------------------------------------------------------------------------------
Netherlands Cordiant Finance BV NLG 18,463 Cash collateral to secure rental
guarantee
- ------------------------------------------------------------------------------------------------------------------------
Sweden Bates Sweden SEK 4,150,000 Charge on assets re
Provinsbanken/Osgota Enskilda Banken
bank and guarantee facility
- ------------------------------------------------------------------------------------------------------------------------
Taiwan Bates Taiwan TWD 15,000,000 Cash collateral for media guarantee
facility
- ------------------------------------------------------------------------------------------------------------------------
UK CCG plc EUR 165,000 Escrow account held with Bankinter for
deferred consideration re minority
purchase of Grupo Bates Spain
(originally 60m ESP)
- ------------------------------------------------------------------------------------------------------------------------
Australia Marketforce Ltd AUD 1,200,000 Secured by Mortgage debenture
- ------------------------------------------------------------------------------------------------------------------------
Brazil Newcomm BRL 4,000,000 Charge over receivables
- ------------------------------------------------------------------------------------------------------------------------
Czech Republic Intercom CZK 4,000,000 Charge over receivables
- ------------------------------------------------------------------------------------------------------------------------
Norway NOK 12,500,000 Charge over receivables for the
provision of an overdraft
- ------------------------------------------------------------------------------------------------------------------------
Schedule 10.1.1-1
0 facility and rental guarantees
- ------------------------------------------------------------------------------------------------------------------------
Thailand Bates Thailand THB 4,250,000 Charge over assets for the provision of
a loan facility
- ------------------------------------------------------------------------------------------------------------------------
Schedule 10.1.1-2
Schedule 10.1.2
PERMITTED GUARANTEES
- -----------------------------------------------------------------------------------------------------------------------
Country Company Currency Amount Description
- -----------------------------------------------------------------------------------------------------------------------
Austria Dr Puttner Bates ATS 600,000 Guarantee given by the company for rent
- -----------------------------------------------------------------------------------------------------------------------
Greece Bates Hellas GRD 200,000,000 Indemnities provided in respect of a
guarantee issued under guarantee facility
provided by Euromerchant bank
- -----------------------------------------------------------------------------------------------------------------------
Greece Bates Hellas GRD 150,000,000 Indemnities provided in respect of a
guarantee issued under guarantee facility
provided by Xios bank, renamed Peraeus bank
(secured 50% on post dated bills)
- -----------------------------------------------------------------------------------------------------------------------
Greece Bates Hellas GRD 250,000,000 Indemnities provided in respect of a
guarantee issued under guarantee facility
provided by ABN AMRO bank
- -----------------------------------------------------------------------------------------------------------------------
Hong Kong Bates Hong Kong HKD 100,000 Guarantee provided to SCMP in respect of
Zenith Media
- -----------------------------------------------------------------------------------------------------------------------
Italy 141 Italia ITL 17,725,000 Indemnities provided in respect of a
guarantee provided by BCI to Zurigo
Assurance
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 131,450,000 Indemnities provided in respect of a
guarantee provided by BCI to Zurigo
Assurance
- -----------------------------------------------------------------------------------------------------------------------
Italy Plan Design ITL 5,893,750 Guarantee in favour of Italian Finance
Ministry
- -----------------------------------------------------------------------------------------------------------------------
Italy Ted Bates WW ITL 104,055,000 Guarantee in favour of Italian Finance
Ministry
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 5,000,000 Indemnities provided in respect of a
guarantee provided by BCI on behalf of
Italian Police department
- -----------------------------------------------------------------------------------------------------------------------
Malaysia Bates Malaysia MYR 4,000,000 Indemnities provided in respect of a
guarantee issued under guarantee facility
provided by HSBC (1.5m MYR overdraft
facility and 50% of 5m MYR guarantee
facility)
- -----------------------------------------------------------------------------------------------------------------------
Norway Bates Gruppen AS NOK 5,500,000 Indemnities provided in respect of a Bank
guarantee provided by Sparbanken in favour
of landlords for office rents (originally
7.8m NOK)
- -----------------------------------------------------------------------------------------------------------------------
Spain Delvico Bates ESP 100,000,000 Indemnities provided in respect of
guarantees issued under a guarantee
facility provided by Banco Santander
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc USD Lease Guarantee given to Landlord of Hudson
obligations Street (with Saatchi)
- -----------------------------------------------------------------------------------------------------------------------
Schedule 10-1.2-1
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc GBP Lease Guarantee given to Landlord of Berkeley
obligations Square (with Saatchi)
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc GBP Lease Guarantee given to Landlord of Dukes Road
obligations (with Saatchi)
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc GBP Variable Forward foreign exchange contracts
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc JPY 700,000,000 Guarantee given by plc in respect of Bates
Japan
- -----------------------------------------------------------------------------------------------------------------------
UK Bates Overseas PTE 30,000,000 Guarantee provided by BOH for the Banco
Holdings Totta & Acores bank facility for Bates
Portugal JV
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc USD 2,000,000 Guarantee given to Chase Manhattan Bank
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc ZAR Run-off Guarantee given by plc to PN Barrett
liabilities Company (Prop) Ltd
- -----------------------------------------------------------------------------------------------------------------------
UK/US CCG plc USD Lease Guarantee given to Landlord of Bates
obligations premises at 498 Seventh Avenue
- -----------------------------------------------------------------------------------------------------------------------
USA Bates US USD Guarantee given by Cordiant Compton WW to
Holdings Inc Niederhoffer, Cross & Zeckhauser
- -----------------------------------------------------------------------------------------------------------------------
USA Bates US USD Guarantee given by Cordiant Compton WW to
Holdings Inc Orenstein, Musoff & Orenstein
- -----------------------------------------------------------------------------------------------------------------------
USA Bates US USD 10,000,000 Guarantee given by Cordiant Compton WW to
Holdings Inc KCIN re lease
- -----------------------------------------------------------------------------------------------------------------------
Argentina CCG plc ARP 610,000 Plc guarantee on behalf of Grandes
Pinturerias del Centro SA
- -----------------------------------------------------------------------------------------------------------------------
Argentina CCG plc ARP 500,000 Plc guarantee on behalf of La Nacion
- -----------------------------------------------------------------------------------------------------------------------
Argentina CCG plc ARP 1,500,000 Plc guarantee on behalf of Arte
Radiotelevisivo Argentino SA
- -----------------------------------------------------------------------------------------------------------------------
Argentina CCG plc ARP 1,500,000 Plc guarantee on behalf of Television
Federal SA
- -----------------------------------------------------------------------------------------------------------------------
Argentina Zenith Media USD 1,500,000 Bank guarantee to Clarin SA
Argentina
- -----------------------------------------------------------------------------------------------------------------------
Belgium LDV Bates EUR 54,291 Bank guarantee given to landlord for rent
- -----------------------------------------------------------------------------------------------------------------------
Germany Sholz & Friends DEM 1,536,000 Bank guarantee given to landlord for rent
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 44,500,000 Bank guarantees on behalf of Zurigo
Assurance (Ex Medical)
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 665,000,000 Bank guarantees on behalf of Min Del Lavoro
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 175,000,082 Bank guarantees on behalf of Min
Dell'Interno
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 423,333,000 Bank guarantees on behalf of Regione
Lombardia
- -----------------------------------------------------------------------------------------------------------------------
Italy Bates Italia ITL 250,000,000 Bank guarantees on behalf of Ministero
Della Salute
- -----------------------------------------------------------------------------------------------------------------------
Schedule 10.1.2-2
- -----------------------------------------------------------------------------------------------------------------------
Netherlands Bates Not Just EUR 93,000 Bank guarantee given to landlord for rent
Film
- -----------------------------------------------------------------------------------------------------------------------
New Zealand CCG plc NZD 5,000,000 Plc guarantee provided to TVNZ
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc GBP 735,712 Bank guarantee given to landlord of Holborn
Gate
- -----------------------------------------------------------------------------------------------------------------------
UK CCG plc GBP 207,575 Bank guarantee given to landlord of
Clerkenwell Road
- -----------------------------------------------------------------------------------------------------------------------
Schedule 10.1.1-3
Schedule 10.1.6
Permitted Acquisitions
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.
- ---------------------------------------------------------------------------------------------------------------------
Acquisition Country Basis of Payout
- ---------------------------------------------------------- ------------------- --------------------------------------
Churchill Group Inc/Churchill Advertising Group Inc US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Bates Travel & Tourism Inc (Criterion) US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Konoret AS Reklamebyra Norway Cash Put/call option
- ---------------------------------------------------------------------------------------------------------------------
Not Just Film BV Netherlands Cash Put call option
- ---------------------------------------------------------------------------------------------------------------------
Cronert & Co Sweden Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Corps 117 & LdV Belgium Cash Put/call option
- ---------------------------------------------------------------------------------------------------------------------
Interactive Edge Inc US Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Mainostoimisto Sarrka Oy Finland Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Diamond Ad Ltd Korea Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
PSD Associates Ltd UK Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Arcom Group Ltd UK Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Camarote ZP S.L. Spain Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Impressionist International Communications Oy Finland Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Interprofil APS (Plan Design) Denmark Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Pack Design AB Sweden Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Bamber Forsyth Ltd UK Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Donino White & Parners Inc US Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
CKMP Ltd UK Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Hermann Beasley Advertising Ltd UK Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Intercom KG Germany Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Big Island International Pty Ltd Australia Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Ideaworks (Holdings) Pty Ltd Australia Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Schedule 10.1.6-1
- ---------------------------------------------------------------------------------------------------------------------
Marketforce Ltd Australia Cash Earnout & contractual
purchase of shares
- ---------------------------------------------------------------------------------------------------------------------
Professional Public Relations Pty Ltd Australia Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Generator Communications Ltd New Zealand Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Newcomm Bates Comunicacao Integrada Ltda Brazil Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
E.S.C. Comunicacion Eisen, San Martin, Camine S.A.L. Spain Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Clarion Communications (PR) Ltd UK Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Davidson Marketing Inc (Communicator US) US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
The Terpin Group of Companies Inc US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Sports Producers Hawaii Inc US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Associates in Architecture & Design Inc US Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Propose Two Ltd/Secure Two Ltd (Communicator UK) UK Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Consultants in Pharmacuetical Advertising Espana S.L. Spain Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
H.F.T. Group France Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Microarts Corporation US Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Bulletin International Ltd UK Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Presentation Communications International Ltd/Ultimate UK Stock Earnout
Events Ltd
- ---------------------------------------------------------------------------------------------------------------------
Gallagher & Kelly Public Relations Ltd Ireland Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
Diseno & Gestion S.L. Spain Cash Earnout & pull/
call option
- ---------------------------------------------------------------------------------------------------------------------
Testardo Public Relations Sp.o.o. Poland Cash Put/call option
- ---------------------------------------------------------------------------------------------------------------------
Harrisonhuman (Proprietary) Ltd South Africa Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Schwab & Piquette Communications Inc Canada Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Antonini & Associati S.r.l./Naviter S.r.l. Italy Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
United Visions Entertainments AG Germany Cash Put/call option
- ---------------------------------------------------------------------------------------------------------------------
Verdino Bates S.A. de Publicidad (Fernando Fernandez) Argentina Cash Earnout
- ---------------------------------------------------------------------------------------------------------------------
Schedule 10.1.6-2
- ---------------------------------------------------------------------------------------------------------------------
International Business Information Inc Japan Stock Earnout
- ---------------------------------------------------------------------------------------------------------------------
141 France SA France Cash Put/call option
- ---------------------------------------------------------------------------------------------------------------------
Shelf Company subsidiary of Bates Germany Werbeagentur Germany Cash
GmbH
- ---------------------------------------------------------------------------------------------------------------------
Schedule 10.1.6-3