EXHIBIT 10.17
DATED 2 DECEMBER 2002
IDEAL HARDWARE LIMITED
BELL MICROPRODUCTS EUROPE EXPORT LIMITED
AS ORIGINAL BORROWERS
AND
BM EUROPE PARTNERS C.V.
BELL MICROPRODUCTS EUROPE BV
BANK OF AMERICA, NATIONAL ASSOCIATION
AS ARRANGER, ISSUER, SWINGLINE LENDER, AGENT AND SECURITY TRUSTEE
AND
CERTAIN BANKS AND FINANCIAL INSTITUTIONS
AS LENDERS
L75,000,000
SYNDICATED CREDIT AGREEMENT
AS AMENDED BY SUPPLEMENTAL AGREEMENTS
DATED 3 DECEMBER 2003, 22 SEPTEMBER
2004 AND __________ 2004
CONTENTS
PAGE
----
CLAUSE
1 INTERPRETATION................................................ 6
2 THE REVOLVING FACILITY........................................ 35
3 ADDITIONAL BORROWERS AND UNSECURED GUARANTORS................. 36
4 ADDITIONAL CHARGING COMPANIES................................. 38
5 CONDITIONS PRECEDENT.......................................... 39
6 UTILISATION OF THE REVOLVING FACILITY......................... 39
7 INTEREST AND INTEREST PERIODS................................. 48
8 MARKET DISRUPTION............................................. 51
9 REPAYMENT, PREPAYMENT AND CANCELLATION........................ 52
10 TAXES......................................................... 54
11 INCREASED COSTS............................................... 56
12 ILLEGALITY.................................................... 57
13 GUARANTEE..................................................... 58
14 REPRESENTATIONS AND WARRANTIES................................ 62
15 FINANCIAL CONDITION........................................... 67
16 COVENANTS..................................................... 71
17 DEFAULT....................................................... 88
18 DEFAULT INTEREST.............................................. 92
19 INDEMNITIES AND CURRENCY OF ACCOUNT........................... 93
20 PAYMENTS...................................................... 95
21 SET-OFF....................................................... 98
22 FEES.......................................................... 99
23 PRO RATA SHARING.............................................. 101
24 COSTS, EXPENSES AND STAMP DUTIES.............................. 102
25 CALCULATIONS AND EVIDENCE OF DEBT............................. 103
26 THE AGENT, THE ARRANGER, THE SECURITY TRUSTEE AND THE
LENDERS.................................................... 105
27 TRUSTEE PROVISIONS............................................ 110
28 ASSIGNMENTS AND TRANSFERS..................................... 116
29 TERM AND TERMINATION.......................................... 118
30 AMENDMENTS, WAIVERS AND REMEDIES.............................. 119
31 PARTIAL INVALIDITY............................................ 120
32 NOTICES....................................................... 120
33 COUNTERPARTS.................................................. 122
34 DUTCH PARALLEL DEBT........................................... 122
35 LAW AND JURISDICTION.......................................... 123
SCHEDULE
1 LENDERS AND COMMITMENTS....................................... 124
2 CONDITIONS PRECEDENT.......................................... 125
3 FORM OF OBLIGOR'S CERTIFICATE................................. 127
4 FORM OF UTILISATION NOTICE.................................... 129
5 MANDATORY COST FORMULAE....................................... 131
6 FORM OF TRANSFER CERTIFICATE.................................. 134
7 THE DORMANT COMPANIES THE CHARGING COMPANIES AND
THE BABY BELLS............................................. 137
8 FORM OF ACCESSION NOTICE...................................... 139
9 DOCUMENTS TO ACCOMPANY ACCESSION NOTICE OR SUPPLEMENTAL
DEED....................................................... 140
10 THE MATERIAL CONTRACTS........................................ 142
THIS AGREEMENT is made on 2 December 2002, as amended and restated on __________
2004
BETWEEN:
(1) IDEAL HARDWARE LIMITED a company incorporated in England and Wales with
registered number 03969946 whose registered office is at Fountain Court,
Cox Lane, Chessington, Surrey KT9 1SJ ("IDEAL") and BELL MICROPRODUCTS
EUROPE EXPORT LIMITED a company incorporated in England and Wales with
registered number 03711148 whose registered office is at Fountain Court,
Cox Lane, Chessington, Surrey KT9 1SJ ("BMEE") (each an "ORIGINAL BORROWER"
and together, the "ORIGINAL BORROWERS");
(2) BM EUROPE PARTNERS C.V. a limited partnership (commanditaire vennootschap)
established under the laws of the Netherlands, having its official seat in
Emmen, the Netherlands and its registered office at Veluwezoom 42-50, 1327
AH Almere, the Netherlands and registered in the Commercial Register under
number 04065637 ("BMEP");
(3) BELL MICROPRODUCTS EUROPE B.V. a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under
the laws of the Netherlands, having its official seat in Emmen, the
Netherlands and its registered office at Veluwezoom 42-50, 1327 AH Almere,
the Netherlands and registered in the Commercial Register under number
04064633 ("BMEBV");
(4) BANK OF AMERICA, NATIONAL ASSOCIATION acting through its London branch at 5
Canada Square, London, E14 5AQ in its capacity as arranger (the
"ARRANGER"), in its capacity as agent for the Lenders (the "AGENT"), in its
capacity as the Lender making Swingline Loans (the "SWINGLINE LENDER"), in
its capacity as the Lender issuing any Letter of Credit or Guarantee (the
"ISSUER") and in its capacity as security trustee under the Security
Documents (the "SECURITY TRUSTEE"); and
(5) THE BANKS AND FINANCIAL INSTITUTIONS named in Schedule 1 (the "ORIGINAL
LENDERS").
IT IS AGREED as follows:
1 INTERPRETATION
1.1 DEFINITIONS
Save as otherwise provided in this Agreement, the following words and
phrases have the following meanings throughout this Agreement:
6
ACCESSION NOTICE: a notice substantially in the form set out in Schedule 8
pursuant to which a Group Company may accede to this Agreement as an
Additional Borrower or, as the case may be, an Unsecured Guarantor;
ACCOUNT: in relation to each Trading Company, its right to payment for a
sale or lease and delivery of goods or rendering of services;
ACCOUNT DEBTOR: each person having any obligation on or in connection with
an Account;
ACCOUNTS TRANSFER CONDITIONS: the accounts transfer conditions incorporated
into the Invoice Discounting Agreements entered into by each IDF Company
from time to time;
ADDITIONAL BORROWER: a Group Company which has acceded to this Agreement as
an Additional Borrower by executing and delivering to the Agent an
Accession Notice in accordance with clause 3;
ADDITIONAL COST RATE: has the meaning given to it in paragraph 2 of
Schedule 5;
ADDITIONAL MONITORING AND ADMINISTRATION FEE: the meaning given to it in
clause 22.7;
ADJUSTED TANGIBLE ASSETS: the meaning given to it in clause 15.4;
ADJUSTED TANGIBLE NET WORTH: the meaning given to it in clause 15.4;
AFFILIATE:
(i) a person which, directly or indirectly, controls or is controlled by
or is under common control with, a Borrower;
(ii) a person which beneficially owns or holds, directly or indirectly, 5%
or more of any class of voting shares of a Borrower; or
(iii) a person in which 5% of any class of voting shares is beneficially
owned or held, directly or indirectly, by a Borrower;
AGENT LOAN: the meaning given to it in clause 6.15.1;
AGENT'S SPOT RATE OF EXCHANGE: the Agent's spot rate of exchange for the
purchase of the relevant currency with sterling in the London foreign
exchange market at or about 11.00 am on a particular day;
AGGREGATE EXPOSURE: at any time, the aggregate at such time of the Total
Outstandings and the Invoice Discounting Facility Exposure at such time;
7
ANNIVERSARY DATE: each anniversary of the Closing Date;
APPLICABLE GAAP:
(i) save as provided in paragraph (ii) of this definition, in respect of
any person, the generally accepted accounting principles and policies
in the country in which such person is incorporated or under whose
laws it is otherwise established, consistently applied; and
(ii) in connection with the preparation of the Pro-Forma Balance Sheet and
the Management Accounts and for the purposes of determining compliance
by Ideal with the financial ratio set out in clause 15.4, generally
accepted accounting principles and policies in the United States of
America, consistently applied ("US GAAP");
APPLICABLE MARGIN: unless by virtue of the operation of clause 7.6 a lower
rate applies, two and one half of one per cent. (2.50%) per annum;
APPROVED ACQUISITION CONDITIONS: each of the following conditions:
(i) that the relevant acquisition (the "RELEVANT ACQUISITION") is to be
funded by the relevant Group Company (a "PURCHASER") entirely out of
Excess Availability and that at the time of the relevant acquisition,
the amount of Excess Availability was not less than L5,000,000 and the
projections, forecasts and other information supplied to the Agent
pursuant to clause 15.2 demonstrate that an average Excess
Availability of not less than L5,000,000 will be maintained for a
continuous period of three (3) months commencing on the date of
completion of the relevant acquisition;
(ii) that the costs of the relevant acquisition do not exceed L5,000,000
(or the equivalent in any other currency) and when aggregated with the
costs of all other Pre-Approved Acquisitions made or in the process of
being made by that or any other purchaser do not or, as the case may
be, will not, exceed L10,000,000 (or the equivalent in any other
currency) during the term of this Agreement;
(iii) that the relevant purchaser (or Ideal on its behalf) has given
written notice to the Agent (such notice to be served not less than 15
business days prior to the proposed date of completion of the relevant
acquisition), such notice to include, without limitation, (A) the name
of the company and/or a brief description of the assets being
purchased and/or the nature of such company's business; (B) a
breakdown of the total consideration payable (including any element of
deferred consideration and/or the details of any earn-out or possible
additional consideration payable); (C) the business case or other
reason(s) underlying the relevant acquisition; (D) the basic terms and
conditions of the relevant acquisition; (E) a brief business plan and
a historic financial statement in relation to any company being
8
purchased (to include a profit and loss account, balance sheet and
cash flow statement relating to the immediately preceding 12 months);
(iv) in the case of any relevant acquisition of shares in a company, such
acquisition has been approved or recommended by the board of directors
of such company;
(v) that the finance director of Ideal has delivered a certificate to the
Agent (together with such additional information or evidence as the
Agent may have reasonably required) confirming, among other matters,
(A) that no Default has occurred and is continuing or will occur as a
result of the completion of the relevant acquisition or would have
occurred if the relevant acquisition had been completed on the last
day of the Financial Quarter most recently ended; (B) the level of
current creditors' days outstanding together with confirmation that
the largest twenty (20) trade creditors of the Group are being paid in
accordance with the credit terms prevailing between such parties; and
(C) that each of the foregoing conditions set out in paragraphs (i) to
(iv) (inclusive) has been satisfied and will continue to be complied
with as at each relevant date prescribed in this definition of
"APPROVED ACQUISITION CONDITIONS".
For the purpose of this definition of "APPROVED ACQUISITION CONDITIONS",
the expression "COSTS" shall be construed to mean the total initial,
deferred or additional consideration paid or payable to any person(s) in
connection with any relevant acquisition, together with all reasonable
costs, fees and expenses (including legal or other professional advisers'
fees) properly paid or payable in connection with the relevant acquisition;
APPROVED ACQUISITION DOCUMENTS: any (i) sale agreement, (ii) share exchange
agreement, (iii) offering circular or (iv) any other documents or
instruments (howsoever described) relating to a Pre-Approved Acquisition or
any other acquisition of assets approved by the Agent;
AUDIT FEE: the meaning given to it in clause 22.4;
AUDITORS: PricewaterhouseCoopers, chartered accountants, or any other firm
of chartered accountants of similar standing selected by Ideal and
satisfactory to the Agent;
AVAILABLE COMMITMENT: in relation to a Lender at any time, the Commitment
of that Lender less the sum at such time of the Original Sterling Amount of
(i) the aggregate amount which it has advanced and (ii) (in the case of the
Issuer) the aggregate of its contingent liabilities under any Letters of
Credit or Guarantees issued by it;
AVAILABLE FACILITY: at any time, the aggregate of the Available
Commitments;
9
AVAILABLE REVOLVING FACILITY AMOUNT: at any time, in relation to the
Revolving Facility and any proposed Utilisation thereof by any Borrower,
the Revolving Facility Amount as reduced by the sum at such time of the
Original Sterling Amount of:
(i) the aggregate principal amount of all Revolving Loans and Swingline
Loans then outstanding;
(ii) the aggregate face amount of all Letters of Credit and of the
aggregate maximum contingent liability under all Guarantees issued by
the Issuer;
(iii) the amount by which the Commitment of any Bank is or is due to be
permanently cancelled or reduced in accordance with the terms of this
Agreement;
(iv) all reserves for accrued interest on the Revolving Loans and Swingline
Loans;
(v) the Invoice Discounting Facility Exposure at such time;
(vi) any IDF Portfolio Loss; and
(vii) all other reserves which the Agent in its discretion deems necessary
or desirable to maintain with respect to any Borrower's account
(including, without limitation, in respect of any day-to-day
fluctuations in the value of sterling against any Foreign Currency and
in respect of any liability of any Borrower under any Hedging
Agreement or in respect of any cash management or foreign exchange
services) and any amounts which the Agent, the Security Trustee, any
Lender or any other Beneficiary may be obliged to pay in the future
for the account of any Borrower;
BABY BELLS: each IDF Company and each of the other companies listed in Part
3 of Schedule 7 and "BABY BELL" means any one of them;
BELGIAN IDF COMPANY: Bell Microproducts BVBA, a corporation incorporated
under the laws of Belgium with registered number 0474128872 and having its
registered office at Mechelen Campus, Schalienhoevedreef 20 1, B-2800
Mechelen, Belgium;
BELGIAN INVOICE DISCOUNTING AGREEMENT: the invoice discounting agreement
dated on or about the date of the Third Supplemental Agreement and made
between the Belgian IDF Company and Bank of America, National Association
acting through its Antwerp branch at Uitbreidingstraat 180, Box 6, B2600,
Antwerp, Belgium;
BELGIAN PLEDGE: any pledge in respect of the Company Accounts and the
Non-Vesting Accounts of the Belgian IDF Company, in form and substance
satisfactory to the Agent and the Receivables Purchaser;
10
BENEFICIARY: each of the Agent, the Arranger, any Hedge Provider (provided
always that such Hedge Provider is the Arranger), the Swingline Lender, the
Issuer, the Security Trustee and any Lender or, in relation to the Invoice
Discounting Agreements, Bank of America, National Association in its
capacity as Receivables Purchaser under such Invoice Discounting
Agreements;
BMEH: Bell Microproducts Europe (Holdings) B.V., a private company with
limited liability (besloten vennootschap met beperkte aansprakelijkheid)
incorporated under the laws of the Netherlands, having its official seat in
Almere, the Netherlands and its registered office at Veluwezoom 42-50, 1327
AH Almere, the Netherlands and registered in the Netherlands with the Trade
Register under number: 39087200;
BORROWERS: each Original Borrower and each Additional Borrower and
"BORROWER" means any one of them;
BORROWING BASE CERTIFICATE: a certificate in such form as the Agent may
from time to time reasonably require and completed by Ideal setting out,
amongst other things, details of Accounts and with effect from the
Inventory Eligibility Date, if applicable, Inventory (as specified in
clause 16.4.1) and of preferential creditors so as to enable the Agent to
determine the Available Revolving Facility Amount;
BORROWINGS: a sum equal to the aggregate amount for the time being of the
principal, capital or nominal amount (determined on a consolidated basis)
of all financial indebtedness of any member of the Group (other than monies
borrowed or raised from another member of the Group) and, without prejudice
to the generality of the foregoing, shall be deemed to include the
following:
(a) the principal amount of any debenture, bond, note, loan stock,
preference share capital, commercial paper or similar instrument of
any member of the Group;
(b) any amounts raised by any member of the Group under any bill of
exchange (but excluding any bill drawn or accepted in the ordinary
course of trade of the relevant member of the Group and which is
payable at sight or not more than 90 days after sight or has a final
maturity of not more than 90 days from the date thereof and is not
refinancing another bill whether or not relating to the same
underlying transaction) and the indebtedness of any member of the
Group under any acceptance credit, bill discounting, note purchase or
documentary credit facility;
(c) the aggregate amount remaining to be paid by any member of the Group
under any credit agreement save for amounts remaining to be paid which
cannot properly be attributed to capital in accordance with Applicable
GAAP;
11
(d) the capitalised value (determined in accordance with Applicable GAAP)
of the outstanding commitments of any member of the Group under any
finance lease;
(e) indebtedness under any receivables purchase, factoring or discounting
arrangement including, without limitation, the Invoice Discounting
Agreements (to the extent there is any recourse against any member of
the Group);
(f) the aggregate amount remaining to be paid in respect of any credit
(other than normal trade credit which has been outstanding for a
period of less than 90 days) granted to, or of any deferred payments
due from, any member of the Group in respect of the acquisition or
construction price of assets acquired or constructed or the purchase
price of services supplied;
(g) indebtedness of any member of the Group in respect of any other
transaction having the commercial effect of a borrowing or other
raising of money entered into by it in order to finance its business
or operations or capital requirements; and
(h) (without double counting) indebtedness of any member of the Group
under any guarantee or other assurance against financial loss in
respect of the financial indebtedness of any person.
For the purpose of determining the amount of "BORROWINGS" at any time, any
amount which is on a particular day outstanding or repayable in a currency
other than sterling shall on that day be taken into account (i) if that day
is the last day of a Financial Year or Management Accounting Period, at its
equivalent in sterling at the rate of exchange used for the purpose of
preparing the balance sheet forming part of the Relevant Accounting
Information prepared as at such date and (ii) in any other case, at its
sterling equivalent as determined by the Agent by reference to the Agent's
Spot Rate of Exchange;
BORROWING COSTS: in relation to any financial period, a sum equal to the
aggregate amount of all continuing, regular or periodic costs (excluding
any prepayment or termination fee), charges and expenses incurred by the
IHL/BB Group in respect of such period (and whether paid or not) in
effecting, servicing or maintaining Borrowings including (but without
double-counting):
(a) interest (whether the same shall be payable immediately or be
capitalised or otherwise deferred);
(b) any fixed or minimum premium or dividend paid or payable on the
maturity of any Borrowings;
(c) consideration given whether by way of discount or otherwise in
connection with finance by way of acceptance credit, bill discounting,
note purchase, receivables purchase, debt factoring or other like
12
arrangement including, without limitation, the discount charge payable
under the Invoice Discounting Agreements; and
(d) the gross amount payable under any finance lease or credit agreement
less so much as can properly be attributed to capital,
the amount of any such costs, charges and expenses to be allocated to each
such period over the term of any Borrowings in accordance with Applicable
GAAP;
CAPITAL EXPENDITURE: all payments due (whether or not paid) in respect of
the cost of any fixed asset or any improvement, replacement, substitution
or addition thereto, which has a useful life of more than one year,
including, without limitation, those arising in connection with the direct
or indirect acquisition of such assets by way of increased product or
service charges or offset items or in connection with finance leases;
CAPITAL MARKETS TRANSACTION: any direct or indirect public offering or
private placement of any debt or equity securities of (including any
capital contribution to) any Borrower, BMEP, BMEH or BMEBV;
CASH OUTFLOW: in relation to any financial period and without double-
counting, the aggregate for that period of:
(i) Borrowing Costs;
(ii) taxes paid;
(iii) dividends paid or other distributions made;
(iv) Capital Expenditure;
(v) amortisation payments on Borrowings and the capital element of any
rental payments or instalments under any credit agreement or finance
lease;
(vi) any expenditure which results in a corresponding release of any
provision in the balance sheet;
CHARGING COMPANY: the companies listed in Part 2 of Schedule 7 and any
other Group Company which has executed the Debenture or any other Security
Document or which has acceded to the Debenture or any other Security
Document by executing a Supplemental Deed in accordance with clause 4;
CHESSINGTON MORTGAGEE: as at the Effective Date, National Westminster Bank
Plc as lender to Bell Microproducts Limited and as mortgagee of the
Chessington Property in connection with such borrowings or such other bank
or financial institution which may at any time refinance all or any part of
such borrowings, provided that such bank or financial institution shall
have entered into an intercreditor deed or other priority arrangement on
terms and conditions mutually
13
acceptable to such bank or financial institution, Bell Microproducts
Limited and the Agent;
CHESSINGTON PROPERTY: all that freehold property registered under title
number SGL 638201 and more particularly known as land and buildings at
Fountain Court, Cox Lane, Chessington, Surrey KT9 1SJ;
CLOSING DATE: 2 December 2002;
COLLATERAL: the meaning given to it in the Debenture;
COLLATERAL MANAGEMENT FEE: the meaning given to it in clause 22.3;
COMMITMENT: in relation to a Lender at any time, the amount in sterling set
opposite its name in Schedule 1 (and/or, as the case may be, the amount in
sterling specified as the portion transferred in the Transfer Certificate
pursuant to which such Lender increased its Commitment or became a party to
this Agreement) as the same may at any time be cancelled or reduced in
accordance with this Agreement;
COMMITMENT PERIOD: the period commencing on the Closing Date and ending on
the date falling one month prior to the Termination Date;
COMPANY ACCOUNTS: has, as the context requires, the meaning ascribed to it
in the applicable Invoice Discounting Agreement;
DEBENTURE: the composite guarantee and debenture creating one or more
encumbrances in favour of the Security Trustee on behalf of the
Beneficiaries, dated 2 December 2002 and executed as a deed by each
Charging Company to secure the obligations of the Obligors under the
Finance Documents;
DEFAULT: an Event of Default or any condition, act or event which (with the
giving of notice, lapse of time, making of any determination, fulfilment of
any condition or any combination of any of the foregoing) may become an
Event of Default;
DISCHARGE: a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a
Hazardous Substance into the indoor or outdoor environment or into or out
of any real estate or other property, including the movement of Hazardous
Substances through or in the air, soil, surface water, groundwater or real
estate or other property;
DISTRIBUTION: any dividend or other distribution (whether in cash or in
kind) in respect of share capital, including any bonus issue or return of
capital (whether at a premium or otherwise);
DORMANT COMPANY: a company which is a "DORMANT" company as defined in
section 249AA Companies Act 1985 and which does not at any time have assets
(other than intercompany indebtedness) in excess of L5,000 (or the
equivalent in any other currency) and which expression shall include, for
the purposes of this
14
Agreement, each of the companies whose names are set out in Part 1 of
Schedule 7;
DUTCH IDF COMPANY: Bell Microproducts BV, a corporation incorporated under
the laws of the Netherlands, having its official seat in Almere, the
Netherlands and its registered office at Veluwezoom 42-50 1327 AH Almere,
Netherlands, the Netherlands and registered in the Commercial Register
under number 04041697;
DUTCH INVOICE DISCOUNTING AGREEMENT: the invoice discounting agreement
dated on or about the date of the Third Supplemental Agreement and made
between the Dutch IDF Company and Bank of America, National Association
acting through its branch at 5 Canada Square, London, E14 5AQ;
DUTCH BANK ACCOUNTS PLEDGE: any pledge in respect of the Company Accounts
of the Dutch IDF Company, in form and substance satisfactory to the Agent
and the Receivables Purchaser;
DUTCH NON-VESTING ACCOUNTS PLEDGE: a pledge in respect of the Non-Vesting
Accounts of the Dutch IDF Company, in form and substance satisfactory to
the Agent and the Receivables Purchaser;
EBITDA: in relation to any financial period, a sum equal to the IHL/BB
Group's profit on ordinary activities before taxation (save to the extent
that such profit is attributable to any interest received) after adding
back Borrowing Costs, depreciation and amortisation and deducting any
release to profits of negative goodwill in respect of such period but
excluding:
(a) profits or losses on the sale or termination of an operation;
(b) profits or losses on the disposal of fixed assets; and
(c) extraordinary items;
EC INSOLVENCY REGULATION: Council Regulation (EC) No. 11346/2000 of 29 May
2000 on insolvency proceedings;
EFFECTIVE DATE: means the date on which the notice referred to in Clause
6.1 of the Supplemental Agreement is given to the Agent;
ELIGIBLE ACCOUNTS: the Accounts of a Borrower which the Agent in the
exercise of its commercial discretion determines to be Eligible Accounts.
Without limiting the discretion of the Agent to establish other criteria of
ineligibility, Eligible Accounts shall not, unless the Agent in its
commercial discretion elects, include any Account:
(a) with respect to which more than ninety (90) days have elapsed since
the date of the original invoice or sixty (60) days have elapsed since
the due date therefor;
15
(b) with respect to which any of the representations, warranties,
covenants and agreements contained in the Debenture are incorrect or
have been breached;
(c) with respect to which Account (or any other Account due from the
applicable Account Debtor), in whole or in part, a cheque, promissory
note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment, and returned
uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as to
which the applicable Borrower has extended the time for payment
without the consent of the Agent (for the purposes hereof, "PROGRESS
BILLING" means any invoice for goods sold or leased or services
rendered under a contract or agreement pursuant to which the Account
Debtor's obligation to pay such invoice is conditional upon such
Borrower's completion of any further performance under such contract
or agreement);
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: (i) death or judicial
declaration of incompetency of such Account Debtor who is a natural
person; (ii) the filing by or against such Account Debtor of a
request, notice of intention to appoint or petition for winding-up,
dissolution, liquidation or bankruptcy of such person or for the
appointment of an administrative receiver, receiver, manager or
administrator in respect of such person or its assets or any other
bankruptcy, insolvency or similar laws of the United Kingdom or any
foreign jurisdiction now or hereafter in effect; (iii) the making of
any general assignment by such Account Debtor for the benefit of its
creditors; (iv) the appointment of a receiver or trustee of such
Account Debtor or of any of the assets of the Account Debtor; (v) the
institution by or against such Account Debtor of any other type of
insolvency proceeding or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or
winding up of affairs of, such Account Debtor; (vi) the non-payment
generally of such Account Debtor of its debts as they become due; or
(vii) the cessation of the business of such Account Debtor as a going
concern;
(f) if fifty per cent. (50%) or more of the aggregate sterling equivalent
of outstanding Accounts owed at such time by the Account Debtor
thereon is classified as ineligible pursuant to the other provisions
of this definition;
(g) owed by an Account Debtor which (i) does not maintain its registered
office or principal place of business in the United States, Canada
(other than the Province of Newfoundland), the United Kingdom or
another country within the European Union prior to 1 May 2004, (ii) is
not organised under the laws of the United States, Canada, part of the
United Kingdom or another country within the European Union prior to 1
May 2004 or any political subdivision, state or province thereof, or
(iii) is the
16
government of any foreign country or sovereign state, or of any state,
province municipality or other political subdivision thereof, or of
any department, agency, public corporation, or other instrumentality
thereof, except to the extent that such Account is secured or payable
by a letter of credit satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of such
Borrower or an Account which the Agent determines is an Intercompany
Account or an internal account;
(i) with respect to Accounts of a Borrower, with respect to which either
the perfection, enforceability or validity of the security over such
Account constituted by the Debenture, or the Security Trustee's or the
Agent's right or ability to obtain direct payment to the Agent or, as
appropriate, the Security Trustee, of the proceeds of such Account, is
governed by any laws other than the local state or federal laws of the
United States of America (including the UCC) or the laws of Canada,
any part of the United Kingdom or another member of the European Union
prior to 1 May 2004;
(j) owed by an Account Debtor to which a Borrower or any Affiliate thereof
is indebted in any way, or which is subject to any right of set-off or
recoupment by the Account Debtor (or otherwise a contra account),
unless the Account Debtor has entered into an agreement acceptable to
the Agent to waive set-off rights, or if the Account Debtor thereon
has disputed liability or made any claim with respect to any other
Account due from such Account Debtor;
(k) [intentionally omitted];
(l) which represents a sale on a bill-and-hold, guaranteed sale, sale and
return, sale on approval, consignment or other repurchase or return
basis;
(m) which is evidenced by a promissory note or other similar instrument;
(n) with respect to which the Agent believes, in the exercise of its
commercial judgment, that the prospect of collection of such Account
is impaired or that such Account may not be paid by reason of the
Account Debtor's financial inability to pay;
(o) which arises out of a sale not made in the ordinary course of such
Borrower's business;
(p) with respect to which the goods giving rise to such Account have not
been shipped and delivered to and accepted by, or have been rejected
or objected to by, the Account Debtor or the services giving rise to
such Account have not been fully performed by such Borrower, and, if
17
applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(q) owed by an Account Debtor or group of affiliated Account Debtors which
is obligated to the Borrowers, or any of them, representing Accounts
the aggregate unpaid balance of which exceeds ten per cent. (10%) of
the aggregate unpaid balance of all Accounts owed to the Borrowers at
such time by all of the Borrowers' Account Debtors;
(r) which is not subject to a first priority, perfected Security Interest
in favour of the Security Trustee, for the benefit of the
Beneficiaries established in a manner satisfactory to the Agent;
(s) owed by an Account Debtor incorporated outside the United Kingdom with
whom such Borrower is trading in excess of its agreed credit limits;
(t) with respect to which such Borrower or the Agent has deemed such
Account as uncollectible or has any reason to believe that such
Account is uncollectible; and
(u) which the Agent determines, in its commercial discretion, is
ineligible for any other reason.
The Agent will consider a request from Ideal for the inclusion of Accounts
in excess of ten per cent. (10%) of the total Eligible Accounts (as
described in paragraph (q)) on a case by case basis, upon production by
Ideal of such financial or other information regarding the business
condition (financial or otherwise) of the Borrowers and the Group as the
Agent may require and upon Ideal demonstrating to the satisfaction of the
Agent, an improvement in its trading and financial position since the
Effective Date.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of the Maximum
Eligibility Amount and the Revolving Facility Amount;
ELIGIBLE INVENTORY: with effect from the Inventory Eligibility Date, if
any, Inventory valued at the lower of cost (on a FIFO basis) or market
value, which is eligible as the basis for Revolving Loans, based on such
criteria as the Agent may from time to time establish in its reasonable
commercial discretion;
ENVIRONMENTAL AUTHORISATION: any authorisation, permit, licence, consent,
registration or other approval required by or pursuant to any Environmental
Law;
ENVIRONMENTAL LAWS: all applicable laws, regulations, codes of practice,
circulars, statutory guides, guidance notes and the like (whether in the
United Kingdom or in any other jurisdiction in which any Obligor carries on
its business or in which its assets may be situated) relating to
contamination, human health, safety or the environment including but not
limited to those relating to
18
Discharges, waste, nuisance, health and safety, noise, packaging or the
manufacture, processing, use, handling, treatment, storage, labelling,
recovery, recycling, transport or disposal of Hazardous Substances;
EQUIPMENT: in relation to each Trading Company, all of its now owned and
hereafter acquired machinery, equipment, furniture, furnishings, fixtures
and other tangible personal property of any kind (except Inventory), as
well as all of such types of property leased by it and all of its rights
and interest with respect thereto under such leases together with all
present and future additions and accessions thereto and replacements
therefor, component and auxiliary parts and supplies used or to be used in
connection therewith and all substitutes for any of the foregoing, and all
manuals, drawings, instructions, warranties and rights with respect
thereto, wherever any of the foregoing is located;
EVENT OF DEFAULT: any of those events specified in clause 17.1;
EXCESS AVAILABILITY: at any time, the amount, if any, by which the
Revolving Facility Amount exceeds the Aggregate Exposure at such time;
FACILITY OFFICE: in relation to a Lender at any time, the office set out
under its name at the end of this Agreement or, in the case of a
Transferee, in the Transfer Certificate to which it is a party as
Transferee or, in the case of a Lender which is an assignee or other
successor of any other Lender, the office notified to the Agent by the
assignee or other successor on or before the date it becomes a Lender or
such other office as such Lender may from time to time notify to the Agent;
FEE LETTER: means any letter or letters dated on or about the date of this
Agreement and/or the Effective Date and/or the date of the Third
Supplemental Agreement between the Arranger and Ideal (or the Agent and
Ideal) setting out and/or relating to any of the fees referred to in clause
22;
FINANCE DOCUMENTS: this Agreement, the Invoice Discounting Agreements, any
Fee Letter, any Accession Notice, any Hedging Agreement, the Security
Documents, the Supplemental Agreement, the Second Supplemental Agreement,
the Third Supplemental Agreement and any other agreement, deed, notice,
document or certificate designated as such by the Agent and Ideal;
FINANCIAL QUARTER: any period of three months in any Financial Year, ending
on the day which is, respectively, three, six or nine months after the
first day of that Financial Year or on the last day of that Financial Year;
FINANCIAL STATEMENTS: according to the context in which it is used, the
Pro-Forma Balance Sheet or any financial statements required to be
delivered to the Agent pursuant to clause 15.2 and complying with the
provisions of clause 15.3;
FINANCIAL YEAR: any period of twelve months ending on 31 December;
19
FOREIGN CURRENCY: dollars, euros or such other currency which is freely
transferable and freely convertible into sterling as may at any time be
specifically agreed by the Agent;
FRENCH IDF COMPANY: Bell Microproducts Sarl, a corporation incorporated
under the laws of France with registered number 43474497500013 and having
its registered office at 23 avenue General Leclerc, 92340, Bourg La Reine,
Paris, France;
FRENCH INVOICE DISCOUNTING AGREEMENT: the invoice discounting agreement
dated on or about the date of the Third Supplemental Agreement and made
between the French IDF Company and Bank of America, National Association
acting through its Paris branch at 43-47 Avenue de la Grande Armee, 75116
Paris, France;
FRENCH BANK ACCOUNTS PLEDGE: any pledge in respect of the Company Accounts
of the French IDF Company, in form and substance satisfactory to the Agent
and the Receivables Purchaser;
GROUP: BMEH and its Subsidiaries at any time including, whether or not a
Subsidiary of BMEH, each IDF Company (but excluding, in each case, unless
the Agent otherwise agrees, any member of the Solutions Group) and "GROUP
COMPANY" shall mean any one of them;
GUARANTEE: any guarantee (which has been specifically agreed between the
relevant Borrower and the Agent) of the obligations of any person issued by
the Issuer at the request of that Borrower pursuant to the terms of clause
6.4;
GUARANTORS: each Secured Guarantor and each Unsecured Guarantor and
"GUARANTOR" means any one of them;
HAZARDOUS SUBSTANCE: any radioactive emissions and any natural or
artificial substance (whether in solid or liquid form or in the form of a
gas or vapour and whether alone or in combination with any other substance)
capable of causing harm to the environment, human health or welfare or to
any organism, including (without limitation) any type of waste or any form
of energy;
HEDGE PROVIDER: the Arranger, any Lender or any other bank or financial
institution of international standing whose long term unsecured debt
securities are, on the date that it enters into any Hedging Agreement,
rated at least A+ by S&P or A1 by Moody's;
HEDGING AGREEMENT: any agreement or instrument between a Borrower and a
Hedge Provider relating to the hedging of an interest rate or a currency
exposure (including a swap, option, cap, collar or floor);
20
IDEAL PRO-FORMA BALANCE SHEET: the pro-forma consolidated (and
consolidating) balance sheet of the IHL Group as at 31 August 2003 prepared
by Ideal in accordance with Applicable GAAP;
IDF COMPANIES: means the Belgian IDF Company, the Dutch IDF Company, the
French IDF Company, the Italian IDF Company, the Swedish IDF Company and
any other company which has entered into an Invoice Discounting Agreement
and which has consequently been designated an IDF Company by the
Receivables Purchaser from time to time and "IDF COMPANY" means any one of
them;
IDF GUARANTEE: the guarantee by the Borrowers contained in clause 7
(Guarantee) of the Third Supplemental Agreement;
IDF PORTFOLIO LOSS: an amount equal to the amount by which the Remittances
(as defined in the Accounts Transfer Conditions) received in respect of an
Account (as defined in the Accounts Transfer Conditions) purchased by the
Receivables Purchaser pursuant to an Invoice Discounting Agreement fall
short of the Purchase Price (as defined in the Accounts Transfer
Conditions) paid by the Receivables Purchaser pursuant to that Invoice
Discounting Agreement less the amount (if any) received by the Receivables
Purchaser by way of repurchase consideration or indemnity from the relevant
IDF Company, or from any other Obligor, in respect of that Account;
IHL/BB GROUP: collectively, the IHL Group and each of the Baby Bells;
IHL GROUP: Ideal and its Subsidiaries (which term includes, for the
avoidance of doubt, OpenPSL Holdings Limited, OpenPSL Limited and Open
Computing Limited) for the time being;
INFORMATION MEMORANDUM: the document in the form approved by Ideal
concerning the Group which, at Ideal's request, and on its behalf, was
prepared by the Arranger in relation to the transactions contemplated by
this Agreement and distributed to selected financial institutions;
INTERCOMPANY ACCOUNTS: all assets and liabilities, however arising, which
are due to any Trading Company from, which are due from any Trading Company
to, or which otherwise arise from any transaction by any Trading Company
with, any Affiliate;
INTEREST PERIOD: any of those periods referred to in clause 7 (by reference
to which interest is calculated on any LIBOR Revolving Loan) or in clause
18.2 (by reference to which interest is calculated on an unpaid sum)
provided that, save in respect of any Interest Periods relating to an
unpaid sum, no Interest Period shall extend beyond the Termination Date;
INVENTORY: in relation to each Trading Company, all of its now owned and
hereafter acquired inventory, goods and merchandise, wherever located, to
be furnished under any contract of service or held for sale or lease, all
raw materials,
21
work-in-progress, finished goods, returned goods and materials and supplies
of any kind, nature or description which are or might be used or consumed
in its business or used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise and
other personal property, and all documents of title or other documents
representing them;
INVENTORY ELIGIBILITY DATE: the date, if any, upon which the Lenders shall
have agreed, and the Agent shall have advised Ideal to that effect, that
Eligible Inventory may be eligible as the basis for Revolving Loans;
INVOICE DISCOUNTING AGREEMENTS: the Belgian Invoice Discounting Agreement,
the Dutch Invoice Discounting Agreement, the French Invoice Discounting
Agreement, the Italian Invoice Discounting Agreement and the Swedish
Invoice Discounting Agreement including, in each case, the Account Transfer
Conditions incorporated therein in accordance with their respective terms
together with any other Invoice Discounting Agreement entered into from
time to time by an IDF Company, including in each case, the Accounts
Transfer Conditions incorporated therein in accordance with their
respective terms;
INVOICE DISCOUNTING FACILITIES: the invoice discounting facilities made
available or to be made available to the IDF Companies under the Invoice
Discounting Agreements;
INVOICE DISCOUNTING FACILITY EXPOSURE: at any time, the aggregate of the
Total MDL Balance (as defined in the Accounts Transfer Conditions) at such
time, the sterling equivalent of any Prepayments to be made on the date on
which the computation falls to be made and the sterling equivalent of all
other amounts owing, actually or contingently, by the IDF Companies under
the Invoice Discounting Agreements at such time, as notified to the Agent
from time to time by each Receivables Purchaser;
ITALIAN IDF COMPANY: Bell Microproducts S.r.l, a corporation incorporated
under the laws of Italy with registered number 13456670150 and having its
registered office at Via V Pisani 12/a, 20124 Milan, Italy;
ITALIAN INVOICE DISCOUNTING AGREEMENT: the invoice discounting agreement
dated on or about the date of the Third Supplemental Agreement and made
between the Italian IDF Company and Bank of America, National Association
acting through its Milan branch at Corso Matteotti 10,20121 Milan, Italy;
ITALIAN BANK ACCOUNTS PLEDGE: any pledge in respect of the Company Accounts
of the Italian IDF Company, in form and substance satisfactory to the Agent
and the Receivables Purchaser;
JURISDICTION: the jurisdiction of incorporation of the relevant Baby Bell;
LATEST PROJECTIONS: (i) until the Agent receives new projections pursuant
to clause 15.2.3, the projections provided by Ideal of the consolidated
(and
22
consolidating) monthly financial condition, results of operations and cash
flow of Ideal and the Baby Bells for the period ending 31 December 2005
(and showing separate projections for the period up to 31 December 2004 and
the subsequent period from 1 January 2005 until 31 December 2005) and (ii)
thereafter, the projections most recently received by the Agent pursuant to
clause 15.2.3;
LENDER: means:
(i) any Original Lender; and
(ii) any bank, financial institution, trust, fund or other entity which has
become a party to this Agreement in accordance with clause 28.3,
which in each case has not ceased to be a party to this Agreement in
accordance with the terms of this Agreement;
LETTER OF CREDIT: any standby letter of credit (which has been specifically
agreed between a Borrower and the Agent) issued by the Issuer at the
request of a Borrower pursuant to the terms of clause 6.4;
LETTER OF CREDIT AND GUARANTEE FEE: the meaning given to it in clause 22.5;
LIBOR: in relation to any LIBOR Revolving Loan or any unpaid sum and any
Interest Period relating to it:
(i) the applicable Screen Rate; or
(ii) (if no Screen Rate is available for the currency or Interest Period of
that Loan or unpaid sum) the arithmetic mean of the rates (rounded up
to 4 decimal places) as supplied to the Agent at its request quoted by
the Reference Banks to leading banks in the London Interbank Market,
at or about 11.00 a.m. in London on the Quotation Date for a period
comparable to the relevant Interest Period;
LIBOR REVOLVING LOAN: a revolving loan made or to be made by the Lenders in
relation to which interest thereon is to be calculated by reference to
LIBOR;
LOANS: each Revolving Loan and Swingline Loan and "LOAN" means any one of
them;
MAJORITY LENDERS: Lenders whose Outstandings together exceed sixty-six and
two-thirds per cent (66 2/3%) of the Outstandings of all the Lenders (or,
if there are no Outstandings, Lenders whose Commitments together exceed
sixty-six and two-thirds per cent (66 2/3%) of the Total Commitments)
provided that, if at any time there are only two Lenders party to this
Agreement "MAJORITY LENDERS" shall mean both of them together;
23
MANAGEMENT ACCOUNTING PERIOD: each period of one calendar month ending on
the last day of that month;
MANAGEMENT ACCOUNTS: the then latest unaudited but consolidated and
consolidating management accounts of BMEH, BMEP, BMEBV, BMEE, Ideal and the
Group (other than the members of the Solutions Group but including in any
event each IDF Company) in respect of each Management Accounting Period to
be prepared in accordance with Applicable GAAP and in a format agreed by
the Agent required to be delivered to the Agent pursuant to clause 15.2.2;
MANDATORY COST: the percentage rate per annum calculated by the Agent in
accordance with Schedule 5;
MATERIAL CONTRACTS: each of the contracts details of which are set out in
Schedule 10 and any other contract from time to time designated as a
Material Contract by the Agent and Ideal;
MAXIMUM ELIGIBILITY AMOUNT: the amount which is equal to the sum of:
(a) 80% of the Net Amount of Eligible Accounts (the "ACCOUNTS ADVANCE
RATE"). If at any time the Agent determines that the Dilution
Percentage for the Borrowers (as a whole) has been equal to or less
than 5% for a continuous period of three (3) months ending on the date
of such determination, the Agent, in its absolute discretion (upon
completing a field exam and such other reviews as it deems
appropriate), may increase the Accounts Advance Rate to 85%. "DILUTION
PERCENTAGE" means the percentage figure obtained by dividing (A) all
credits, allowances, discounts, write-offs, contra-accounts and other
set-offs incurred in any month which reduce the value of Accounts for
the Borrowers (as a whole) by (B) the gross amount of all cash
received and retained in the Receivables Accounts from all Accounts
created by the Borrowers (as a whole) in such month: notwithstanding
but without prejudice to the foregoing, the Agent shall have the right
to reduce the Accounts Advance Rate or to establish reserves, if the
Agent at any time determines that the Dilution Percentage has
increased; plus
(b) after the Inventory Eligibility Date, if applicable, up to 60% of the
value of Eligible Inventory;
MAXIMUM REVOLVING CREDIT LINE: the amount of L75,000,000 or such other
amount as may be agreed between the Agent and Ideal;
NET AMOUNT OF ELIGIBLE ACCOUNTS: the gross amount of Eligible Accounts less
sales, excise or similar taxes, and less returns, discounts, claims,
credits and allowances of any nature at any time issued, owing, granted,
outstanding, available or claimed in respect of such Eligible Accounts;
24
NON-VESTING ACCOUNTS: has the meaning given to it in the Accounts Transfer
Conditions;
NOTICE OF CONVERSION/CONTINUATION: the meaning given to it in clause 7.5.2;
OBLIGORS: each Borrower, each Charging Company, each Guarantor, BMEP, BMEH
and each other member of the Group which has, or may be required by the
Agent to have, any liability from time to time, whether actual or
contingent, present or future, for the payment of any amounts outstanding
or capable of becoming outstanding under any of the Finance Documents and
"OBLIGOR" means any one of them;
ORIGINAL STERLING AMOUNT: in relation to a Loan, the amount specified in
sterling in the Utilisation Notice relating to that Loan (or, if the amount
requested is denominated in a Foreign Currency, that amount converted into
sterling at the Agent's Spot Rate of Exchange on the date which is three
business days before the Utilisation Date or, if later, on the date the
Agent received the Utilisation Notice);
OUTSTANDINGS: in relation to a Lender at any time, the Original Sterling
Amount of the aggregate principal amount of its share of all (if any)
Utilisations, including (in relation to the Issuer) the Original Sterling
Amount of the aggregate of its contingent liabilities in respect of any
such Utilisations consisting of the issue of any Letters of Credit or
Guarantees outstanding at that time;
PARENT: Bell Microproducts Inc.;
PARTICIPATING PROPORTION: in relation to a Lender and a sum payable to or
by it on any date, the proportion which the Commitment of that Lender bears
to the Total Commitments on that date;
PERMITTED ENCUMBRANCE: any encumbrance permitted under clause 16.3.1;
PERMITTED INDEBTEDNESS: any indebtedness permitted under clause 16.3.5;
PLEDGE AGREEMENTS: the Belgian Pledge, the Dutch Bank Accounts Pledge, the
Dutch Non-Vesting Accounts Pledge, the French Bank Accounts Pledge, the
Italian Bank Accounts Pledge and the Swedish Bank Accounts Pledge and any
other pledge agreement entered into by an IDF Company pursuant to the terms
of an Invoice Discounting Agreement;
PRE-APPROVED ACQUISITION: any acquisition of any business, shares or other
assets of any kind by any Group Company which does not require the prior
consent or approval of the Agent or the Lenders by virtue of the fact that
both prior to and at the time of its completion, each of the Approved
Acquisition Conditions were satisfied;
PREPAYMENT: has the meaning given to it in the Accounts Transfer
Conditions;
25
PRIORITY AGREEMENT: the priority agreement dated 2 December 2002 between
(1) Bell Microproducts Limited, (2) the Security Trustee and (3) National
Westminster Bank Plc in its capacity as existing Chessington Mortgagee;
PRO-FORMA BALANCE SHEET: the pro-forma consolidated (and consolidating)
balance sheet of the Group and each Group Company as of 31 October 2002
prepared by Ideal in accordance with Applicable GAAP;
QUALIFYING LENDER: a lender which either:
(i) is a bank as defined in section 840A of the Taxes Act which, for the
purposes of section 349 of the Taxes Act, is within the charge to
corporation tax as regards all interest payable to it under this
Agreement; or
(ii) is a lender (a "TREATY LENDER") which has the benefit of a double tax
treaty which provides a complete exemption from UK income tax on
interest; or
(iii) is a lender (a "UK NON-BANK LENDER") which is beneficially entitled
to interest payable to that lender in respect of a Loan under this
Agreement and is:
(a) a company resident in the United Kingdom for United Kingdom tax
purposes;
(b) a partnership each member of which is a company resident in the
United Kingdom for United Kingdom tax purposes; or
(c) a company not so resident in the United Kingdom which carries on
a trade in the United Kingdom through a branch or agency and
which is required to bring that interest into account in
computing its chargeable profits (within the meaning given by
section 11(2) of the Taxes Act),
and has given a Tax Confirmation to the Borrowers;
QUOTATION DATE: in relation to any period for which an interest rate is to
be determined, the day on which quotations would ordinarily be given by
prime banks in the London Interbank Market for deposits in the currency in
relation to which such rate is to be determined for delivery on the first
day of that period provided that, if, for any such period, quotations would
ordinarily be given on more than one date, the Quotation Date for that
period shall be the last of those dates;
RECEIVABLES ACCOUNT: has the meaning given to it in the Security Documents;
RECEIVABLES PURCHASER: has the meaning given to it in the Third
Supplemental Agreement;
26
REFERENCE BANKS: such banks as may be appointed by the Agent in
consultation with Ideal;
REFERENCE RATE: in relation to any Loan or unpaid sum denominated in
sterling or any Foreign Currency (as the case may be) on which interest is
to be calculated by reference to Reference Rate, the Agent's reference rate
for sterling or such Foreign Currency being the rate from time to time set
by the Agent based on various factors including the Agent's cost of funds,
desired return and general economic conditions and which is used as a
reference point for pricing loans made by it in sterling or such Foreign
Currency;
REFERENCE RATE REVOLVING LOAN: a revolving loan made or to be made by the
Lenders in relation to which interest thereon is to be calculated by
reference to the Reference Rate;
RELEVANT ACCOUNTING INFORMATION: the meaning given to it in clause 15.4;
RELEVANT AGREEMENTS: the Finance Documents, the Material Contracts and any
Approved Acquisition Documents;
RESERVATIONS: the principle that equitable remedies are remedies which may
be granted or refused at the discretion of the court, the limitation of
enforcement by laws relating to bankruptcy, insolvency, liquidation,
reorganisation, court schemes, moratoria, administration and other laws
generally affecting the rights of creditors, the time barring of claims
under the Limitation Act 1980, the possibility that an undertaking to
assume liability for or to indemnify against non-payment of United Kingdom
stamp duty may be void, the unenforceability of penalty provisions and
defences of set-off or counterclaim and similar principles arising under
the laws of any other jurisdiction in which relevant obligations must be
performed;
RESTRICTED INVESTMENT: any acquisition of any assets by any Group Company
in exchange for cash or other assets, whether in the form of an acquisition
of shares, debt securities or other indebtedness or obligation, or the
purchase or acquisition of any other assets, or a loan, advance, capital
contribution or subscription, except the following:
(i) acquisitions of fixed assets to be used in the business of such Group
Company, so long as the acquisition costs thereof constitute Capital
Expenditure permitted hereunder; and
(ii) acquisitions of goods held for sale or lease or to be used in the
rendering of services by such Group Company in the ordinary course of
business;
(iii) any acquisition of shares, debt securities or other indebtedness or
obligation, or the making of any loan, advance, capital contribution
or subscription by any Group Company in or to any other Group Company
which is loss-making and solely for the purpose of recapitalising such
27
loss-making Group Company, provided always that, unless (A) the funds
(the "INVESTMENT FUNDS") employed by the investing Group Company have
been made available to it wholly by the Parent (directly or through
BMEH) and not by the utilisation of any amounts drawn down under this
Agreement and (B) the investment funds are the proceeds of a new
capital injection (whether by way of debt or equity) into the
investing Group Company occurring after the Effective Date and not
monies already available to such investing Group Company, then such
capital injection by the relevant investing Group Company may not
exceed L 500,000 without the prior consent of the Agent;
(iv) any Pre-Approved Acquisition;
REVIEW DATE: the meaning given to it in Clause 7.6.1;
REVOLVING FACILITY: the facility referred to in clause 2.1;
REVOLVING FACILITY AMOUNT: the lesser of:
(i) the Maximum Revolving Credit Line; and
(ii) the Maximum Eligibility Amount;
REVOLVING LOAN: each LIBOR Revolving Loan and each Reference Rate Revolving
Loan made or to be made by the Lenders pursuant to the Revolving Facility;
SCREEN RATE: the British Bankers Association Interest Settlement Rate for
the relevant currency and period displayed on page 3750 of the Telerate
screen; if the agreed page is replaced or service ceases to be available,
the Agent may specify another page or service displaying the appropriate
rate after consultation with Ideal and the Lenders;
SECOND SUPPLEMENTAL AGREEMENT: the agreement supplemental to this Agreement
dated 22 September 2004 and entered into by, amongst others, the parties to
this Agreement;
SECURED GUARANTOR: each Charging Company;
SECURED OBLIGATIONS: the meaning given to it in the Debenture;
SECURITY DOCUMENTS: the Debenture, the Priority Agreement, the Pledge
Agreements and any document creating an encumbrance over any asset of any
Obligor and/or any IDF Company entered into pursuant thereto or pursuant to
any other Finance Document and any other security document granted to the
Security Trustee as security for the obligations of the Obligors and/or any
IDF Company to the Beneficiaries;
28
SECURITY INTEREST: collectively the encumbrances granted to the Security
Trustee pursuant to the Security Documents or any other agreement or
instrument;
SOLUTIONS GROUP: at any time, Bell Microproducts Solutions BV and its
Subsidiaries at such time and "MEMBER OF THE SOLUTIONS GROUP" means any one
of them but so that an IDF Company shall be deemed not to be a member of
the Solutions Group even if this is in fact the case;
ST. CRISPIN MORTGAGEE: as at the date of the Second Supplemental Agreement,
HSBC Bank PLC as lender to OpenPSL Limited and as mortgagee of the St.
Crispin Property in connection with such borrowing or such other bank or
financial institution which may at any time refinance all or any part of
such borrowings, provided that such bank or financial institution shall
have entered into an intercreditor deed or other priority arrangement on
terms and conditions mutually acceptable to such bank or financial
institution, OpenPSL Limited and the Agent;
ST. CRISPIN PRIORITY AGREEMENT: the priority agreement, in form and
substance satisfactory to the Agent, entered or to be entered into between
(1) OpenPSL Limited, (2) the Security Trustee and (3) HSBC Bank PLC;
ST. CRISPIN PROPERTY: all that freehold property registered under title
number LA596977 and more particularly known as land to the west side of St.
Crispin Way, Haslingden, Rossendale, Lancashire;
SUBSIDIARY: of a person means any company or entity directly or indirectly
controlled by such person;
SUPPLEMENTAL AGREEMENT: the agreement supplemental to this Agreement dated
3 December 2003 entered into by the parties hereto;
SUPPLEMENTAL DEED: a deed supplemental to the Debenture or any other
Security Document, substantially in the form set out in schedule 9 to the
Debenture or, as the case may be, substantially in the form set out in such
Security Document, entered or to be entered into by a Group Company
pursuant to which that Group Company accedes to the Debenture or, as the
case may be, any other Security Document, as a Charging Company;
SWEDISH IDF COMPANY: Bell Microproducts AB, a corporation incorporated
under the laws of Sweden with registered number SE556597-7385 and having
its registered office at Rotebergsvagen 1, 192 78 Sollentuna, Sweden;
SWEDISH INVOICE DISCOUNTING AGREEMENT: the invoice discounting agreement
dated on or about the date of the Third Supplemental Agreement and made
between the Swedish IDF Company and Bank of America, National Association
acting through its branch at 5 Canada Square, London, E14 5AQ;
29
SWEDISH BANK ACCOUNTS PLEDGE: a pledge in respect of the Company Accounts
of the Swedish IDF Company, in form and substance satisfactory to the Agent
and the Receivables Purchaser;
SWINGLINE LOAN: a swingline loan made or to be made by the Swingline Lender
pursuant to clause 6.3;
TAXES ACT: the Income and Corporation Taxes Act 1988;
TAX CONFIRMATION: a confirmation by a person which is a Lender under this
Agreement that the person beneficially entitled to interest payable to that
Lender in respect of a Loan under this Agreement is either:
(i) a company resident in the United Kingdom for United Kingdom tax
purposes; or
(ii) a partnership each member of which is a company resident in the United
Kingdom for United Kingdom tax purposes; or
(iii) a company not so resident in the United Kingdom which carries on a
trade in the United Kingdom through a branch or agency and which is
required to bring that interest into account in computing its
chargeable profits (within the meaning given by section 11(2) of the
Taxes Act);
TERMINATION DATE: subject to clause 9.5, 15 July 2006;
THIRD SUPPLEMENTAL AGREEMENT: the agreement supplemental to this Agreement
dated ____________ between, amongst others, the parties to this Agreement;
TOTAL COMMITMENTS: the aggregate at any time of the Commitments of all the
Lenders;
TOTAL OUTSTANDINGS: the aggregate at any time of the Outstandings of all
the Lenders;
TRADING COMPANY: each Group Company with Eligible Accounts and, if
applicable following the Inventory Eligibility Date, with such Eligible
Inventory as the Agent may agree in writing;
TRANSFER CERTIFICATE: a certificate substantially in the form set out in
Schedule 6 completed in accordance with clause 28;
TRANSFEREE: a Lender or other financial institution which is a Qualifying
Lender to which a Lender seeks to transfer rights and obligations under
this Agreement in accordance with clause 28;
TRUST PROPERTY: all or any of the assets, rights, powers, authorities and
discretions at any time subject to or expressed to be subject to the
security from
30
time to time constituted by or arising pursuant to the Security Documents
or vested in the Security Trustee or given under or pursuant to the
Security Documents including all income and other sums at any time received
or receivable by the Security Trustee in respect thereof;
UNSECURED GUARANTOR: a Group Company which has acceded to this Agreement as
an unsecured guarantor by executing and delivering to the Agent an
Accession Notice in accordance with clause 3 and "UNSECURED GUARANTOR"
means any one of them;
UNUSED LINE FEE: the meaning given to it in clause 22.1;
UTILISATION: a utilisation consisting of the drawdown of a Swingline Loan
or Revolving Loan or the issue by the Issuer of a Letter of Credit or
Guarantee;
UTILISATION NOTICE: a notice of Utilisation substantially in the form set
out in Schedule 4; and
VAT: value added tax or any similar tax substituted therefore.
1.2 CONSTRUCTION
Any reference in this Agreement to:
1.2.1 the "AGENT", the "ARRANGER", the "RECEIVABLES PURCHASER", the
"SECURITY TRUSTEE", the "ISSUER", the "SWINGLINE LENDER" or any
"LENDER" shall be construed so as to include their respective
successors, Transferees and assignees in accordance with their
respective interests;
1.2.2 "THIS AGREEMENT" or to any other agreement or document shall, unless
the context otherwise requires, be construed as a reference to this
Agreement or such other agreement or document as the same may from
time to time be amended, varied, supplemented, novated or replaced and
shall include any document which is supplemental to, is expressed to
be collateral with, or is entered into pursuant to or in accordance
with, the terms of this Agreement or, as the case may be, such other
agreement or document;
1.2.3 the "ASSETS" of any person shall be construed as a reference to all
or any part of its business, operations, undertaking, property,
assets, revenues (including any right to receive revenues) and
uncalled capital;
1.2.4 a "BUSINESS DAY" is a reference to a day (other than a Saturday or
Sunday) on which banks generally are open for business in London and:
31
(a) (in relation to any date for the payment or purchase of a
currency other than euro) in the principal financial centre of
the country of that currency; or
(b) (in relation to any date for the payment or purchase of euro)
which is a TARGET Day;
1.2.5 a "CAPITAL ADEQUACY REGULATION" shall be construed as a reference to
any guideline, request or directive of any central bank or public
authority, or any other law, rule or directive or regulation, whether
or not having the force of law, in each case, regarding capital
adequacy of any bank or of any corporation controlling a bank;
1.2.6 a document being a "CERTIFIED COPY" of another means such document is
certified by a duly authorised officer of the relevant Obligor (or by
reputable solicitors to the relevant Obligor from time to time) as
being a true, complete, accurate and up-to-date copy of the original;
1.2.7 a person being "CONTROLLED" by another means that that other (whether
directly or indirectly and whether by the ownership of share capital,
the possession of voting power, contract or otherwise) has the power
to appoint and/or remove all or the majority of the members of the
board of directors or other governing body of that person or otherwise
controls or has the power to control the affairs and policies of that
person;
1.2.8 a "CREDIT AGREEMENT" shall be construed as a reference to any
conditional sale agreement (as defined in the Consumer Credit Act
1974), hire purchase or credit sale agreement or other similar
agreement entered into primarily as a method of financing the
acquisition of the asset which is the subject of such agreement;
1.2.9 a Default which is "CONTINUING" shall be construed as a reference to
a Default which has not been remedied or waived;
1.2.10 "DOLLARS" and "US$" shall mean the lawful currency of the United
States of America;
1.2.11 "EMU LEGISLATION" means legislative measures of the European
Communities for the introduction of, changeover to or operation of the
euro;
1.2.12 an "ENCUMBRANCE" shall be construed as a reference to a mortgage,
charge, assignment by way of security, pledge, lien, hypothecation,
right of set-off, reservation of title arrangement, preferential right
(save as arising under the general law for the protection of certain
classes of creditors) or any trust, flawed asset or other arrangement
for
32
the purpose of and having a similar effect to the granting of
security, or other security interest of any kind;
1.2.13 "EURO" and "EUR" means the single currency adopted by certain
participating member states of the European Communities in accordance
with EMU legislation;
1.2.14 a "FINANCE LEASE" shall be construed as a reference to any lease or
other similar agreement entered into primarily as a method of
financing the use of the asset which is the subject of such lease or
agreement;
1.2.15 "FINANCIAL INDEBTEDNESS" shall be construed as a reference to any
indebtedness under or in respect of:
(a) monies borrowed or raised (including by way of preference share
capital but excluding by way or ordinary shares);
(b) any debenture, bond, note, loan stock, commercial paper or
similar instrument;
(c) any acceptance credit, bill-discounting, note purchase or
documentary credit facility;
(d) any credit agreement or finance lease;
(e) any receivables purchase, factoring or discounting arrangement
under which there is recourse in whole or in part to any member
of the Group including, without limitation, the Invoice
Discounting Agreements;
(f) credit (other than normal trade credit for a period not exceeding
90 days) or deferred payment arrangements in respect of the
acquisition or construction price of assets acquired or
constructed or the purchase price of services supplied;
(g) any other transaction having the commercial effect of a borrowing
or other raising of money entered into by a person to finance its
business or operations or capital requirements; or
(h) (without double counting) any guarantee or other assurance
against financial loss in respect of the indebtedness of any
person arising under an obligation falling within (a) to (g)
above;
1.2.16 the "FINANCIAL STATEMENTS" or the "MANAGEMENT ACCOUNTS" shall be
construed so as to include any notes, reports, statements or other
documents annexed or attached to any of them;
33
1.2.17 a "GUARANTEE" shall be construed so as to include an indemnity,
bond, standby letter of credit and any other obligation (whatever
called) of any person to pay for, purchase, provide funds (whether by
the advance of money, the purchase or subscription for shares or other
securities, the purchase of assets or services or otherwise) for the
payment of, indemnify against the consequences of default in the
payment of, or otherwise be responsible for, any indebtedness or other
obligation of any other person (and "GUARANTEED" and "GUARANTOR" shall
be construed accordingly);
1.2.18 "INDEBTEDNESS" shall be construed as a reference to any obligation
for the payment or repayment of money, whether as principal or as
surety and whether present or future, actual or contingent;
1.2.19 a document expressed to be "IN THE APPROVED TERMS" is a reference to
a document the terms, conditions and form of which have been
initialled for the purpose of identification by or on behalf of the
Agent;
1.2.20 something having a "MATERIAL ADVERSE EFFECT" on a person shall be
construed as a reference to it having a material adverse effect (i) on
its financial condition, business or operations or on the consolidated
financial condition, business or operations of it and its Subsidiaries
or (ii) on its ability to comply with its payment obligations under
any Finance Document;
1.2.21 a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day in the
next calendar month save that, where any such period would otherwise
end on a day which is not a business day, it shall end on the next
business day, unless that day falls in the calendar month succeeding
that in which it would otherwise have ended, in which case it shall
end on the preceding business day provided that, if a period starts on
the last business day in a calendar month or if there is no
numerically corresponding day in the month in which that period ends,
that period shall end on the last business day in that later month;
1.2.22 a "PARTICIPATING MEMBER STATE" is a reference to any member state of
the European Communities which adopts or has adopted the euro as its
lawful currency in accordance with EMU legislation;
1.2.23 a "PERSON" shall be construed as a reference to any individual,
firm, company, corporation, public authority or any association or
partnership (whether or not having separate legal personality) of two
or more of the foregoing;
1.2.24 a "PUBLIC AUTHORITY" shall be construed as a reference to any
government of any country or sovereign state or any political
sub-
34
division thereof or any department, agency, public corporation or
other instrumentality of any of the foregoing;
1.2.25 a "REGULATION" shall be construed so as to include any regulation,
rule, by-law, official directive, requirement, request or guideline
(whether or not having the force of law) of any governmental body,
agency, department or regulatory, self-regulatory or other authority
or organisation;
1.2.26 "STERLING" and "L" denotes the lawful currency of the United
Kingdom;
1.2.27 the "STERLING EQUIVALENT" of (i) any amount denominated in a Foreign
Currency shall mean the equivalent in sterling of such amount as
determined by the Agent by reference to the Agent's Spot Rate of
Exchange and of (ii) any amount denominated in sterling shall mean
such sterling amount;
1.2.28 "TARGET" is a reference to Trans-European Automated Real-time Gross
Settlement Express Transfer payment system;
1.2.29 "TARGET DAY" is a reference to any day on which TARGET is open for
the settlement of payments in euro;
1.2.30 "TAX" shall be construed so as to include any present and future
tax, levy, impost, deduction, withholding, duty or other charge of a
similar nature (including, without limitation, any penalty or interest
payable in connection with any failure to pay or any delay in paying
any of the same);
1.2.31 "TAX ON OVERALL NET INCOME" of a person shall be construed as a
reference to tax (other than tax deducted or withheld from any
payment) imposed on that person by the jurisdiction in which its
principal office (and/or, in the case of a Lender, its Facility
Office) is located on (i) the net income, profits or gains of that
person world-wide or (ii) such of its net income, profits or gains as
arise in or relate to that jurisdiction;
1.2.32 an "UNPAID SUM" is a reference to an unpaid sum as that term is
defined in clause 18.1;
1.2.33 the "WINDING-UP", "DISSOLUTION", "ADMINISTRATION", "RECEIVERSHIP" or
"BANKRUPTCY" of a person and references to the "LIQUIDATOR",
"ADMINISTRATOR", "RECEIVER", "ADMINISTRATIVE RECEIVER", "RECEIVER AND
MANAGER", "MANAGER" or "TRUSTEE" of a person shall be construed so as
to include any equivalent or analogous proceedings or, as the case may
be, insolvency representative or officer under the law of the
jurisdiction in which such person or, as the case may be, insolvency
representative or officer is incorporated or constituted or of any
jurisdiction in which such person or, as the case may be,
35
insolvency representative or officer is incorporated or constituted or
of any jurisdiction in which such person or, as the case may be,
insolvency representative or officer, carries on business.
1.3 Any reference in this Agreement to any statute or statutory provision
shall, unless the context otherwise requires, be construed as a reference
to such statute or statutory provision (including all instruments, orders
or regulations made thereunder or deriving validity therefrom) as in force
at the date of this Agreement and as subsequently re-enacted or
consolidated.
1.4 Any reference in this Agreement to a time of day shall, save where the
context otherwise requires, be construed as a reference to London time.
1.5 In construing this Agreement general words introduced by the word "OTHER"
shall not be given a restrictive meaning by reason of the fact that they
are preceded by words indicating a particular class of acts, matters or
things and general words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples intended to be
embraced by the general words.
1.6 The illegality, invalidity or unenforceability of any provision of this
Agreement under the law of any jurisdiction shall not affect its legality,
validity or enforceability under the law of any other jurisdiction nor the
legality, validity or enforceability of any other provision of this
Agreement.
1.7 This Agreement supersedes any previous agreement, whether written or oral,
express or implied, between the Original Borrowers, the Arranger, the
Agent, the Security Trustee and the Lenders, or any of them, in relation to
the subject matter of this Agreement.
1.8 The headings in this Agreement are for convenience only and shall not
affect its meaning and references to a clause, Schedule or paragraph are
(unless otherwise stated) to a clause of, or schedule to, this Agreement
and to a paragraph of the relevant Schedule.
1.9 This Agreement may be signed in any number of counterparts, all of which
taken together shall constitute one and the same instrument. Any party may
enter into this Agreement by signing any such counterpart.
1.10 Save where the context otherwise requires, the plural of any term includes
the singular and vice versa.
1.11 Except as provided in clause 27.13, the terms of this Agreement may only be
enforced by a party to it and the operation of the Contracts (Rights of
Third Parties) Act 1999 is excluded. Notwithstanding such clause, the
parties to this Agreement do not require the consent of any third party to
rescind or vary this Agreement or any Finance Document at any time.
36
1.12 Nothing in this Agreement or envisaged hereby shall operate, whether
directly or indirectly, to constitute a partnership between any Obligor and
any of the Beneficiaries.
1.13 The liabilities and obligations of the Obligors under the Finance Documents
to which each of them is expressed to be a party are and shall be construed
as being, joint and several.
2 THE REVOLVING FACILITY
2.1 THE REVOLVING FACILITY
Subject to the terms and conditions of this Agreement, the Lenders shall
make available to the Borrowers a revolving credit facility (the "REVOLVING
FACILITY") of up to L75,000,000. The Revolving Facility (as described
in clause 6) shall consist of Revolving Loans (to be denominated in
sterling and/or, if agreed between the relevant Borrower and the Agent,
dollars, euro or one or more other Foreign Currencies) to be made by the
Lenders and, if specifically agreed by the Agent (on the instructions of
the Issuer), Letters of Credit and/or Guarantees to be issued by the Issuer
(subject to reimbursement by the relevant Borrower and each of the Lenders
on the terms set out in this Agreement) and Swingline Loans (to be
denominated in sterling and/or dollars, euros or such one or more other
Foreign Currencies as may be agreed between the relevant Borrower and the
Swingline Lender), to be made by the Swingline Lender (subject to
reimbursement by the Lenders on the terms set out in this Agreement) in a
maximum aggregate principal Original Sterling Amount not exceeding the
Revolving Facility Amount.
2.2 PURPOSE
The Revolving Facility is to be applied to meet each Borrower's general
working capital purposes and each Borrower shall apply all amounts raised
by it under this Agreement accordingly provided that none of the Agent, the
Security Trustee or any of the Lenders shall be obliged to concern itself
with the application of amounts raised by any Borrower under this
Agreement.
2.3 OBLIGATIONS SEVERAL
The obligations of each Lender under this Agreement are several. The
failure by any Lender to perform its obligations under this Agreement shall
not affect the obligations of any Obligor towards any other party to this
Agreement nor shall any such other party be liable for the failure by such
Lender to perform its obligations.
2.4 RIGHTS SEVERAL
The rights of each Lender are several. The amount at any time owing by any
Borrower to any party under this Agreement shall be a separate and
independent debt from the amount owing to any other party.
37
2.5 FINANCIAL ASSISTANCE
None of the proceeds of any Utilisation of the Revolving Facility under
this Agreement may be used in any way which infringes section 151 Companies
Act 1985 or any similar or other statutory obligation whether in the United
Kingdom or elsewhere unless the provisions of sections 155 to 158 thereof
are actually complied with.
2.6 CONTINUING OBLIGATIONS
The obligations of any party under or in respect of clauses 10, 11, 18, 19,
20.7, 24 and 26.9 shall continue even after the date (the "DISCHARGE DATE")
upon which the Total Commitments have been cancelled or otherwise reduced
to zero and the Outstandings of all the Lenders have been permanently
repaid or prepaid, to the extent of and in respect of any cost, expense,
loss, liability or claim indemnifiable under any such clause and suffered
or incurred by any Beneficiary on or prior to the Discharge Date.
3 ADDITIONAL BORROWERS AND UNSECURED GUARANTORS
3.1 REQUEST OR REQUIREMENT
Ideal may request that any Group Company shall become an Additional
Borrower or, as applicable, the Agent may require that any Group Company
shall become an Unsecured Guarantor by giving to the Agent or, as
applicable, to Ideal not less than 10 business days' notice. For the
avoidance of doubt, any Additional Borrower shall, unless the Agent
otherwise agrees, automatically be required also to become a Charging
Company pursuant to clause 4, without the need for the Agent to serve a
further notice in accordance with clause 4.
3.2 ACCESSION
The Group Company in respect of which the request or, as the case may be,
requirement is made pursuant to clause 3.1 shall become an Additional
Borrower or, as applicable, an Unsecured Guarantor:
3.2.1 if the Lenders approve or, as applicable, require the addition of
that Group Company as an Additional Borrower or, as applicable, as an
Unsecured Guarantor;
3.2.2 upon Ideal delivering to the Agent a duly completed and executed
Accession Notice;
3.2.3 in the case of a request to appoint an Additional Borrower, if no
Default has occurred or is likely to occur as a result of that Group
Company becoming an Additional Borrower;
38
3.2.4 if the Agent has received all of the documents and other evidence
specified in Schedule 9 in relation to that Group Company and each is
in form and substance satisfactory to the Agent.
For the avoidance of doubt, no Accounts or Inventory of any Group Company
which is to become an Additional Borrower shall be considered as Eligible
Accounts or Eligible Inventory, unless the Agent has completed a field
examination and such other due diligence as the Agent may require and such
Accounts and Inventory satisfy the applicable conditions set forth in this
Agreement.
3.3 TIMING
The Agent shall notify Ideal and the Lenders promptly upon being satisfied
that it has received all of the documents and other evidence specified in
Schedule 9 in relation to the relevant Group Company and that each is in
form and substance satisfactory to it, whereupon subject always to clauses
3.2.1, 3.2.2 and, in the case of a proposed Additional Borrower, clause
3.2.3, the relevant Group Company shall become an Additional Borrower or,
as applicable, an Unsecured Guarantor.
3.4 IDEAL AS AGENT
Each Borrower and each Unsecured Guarantor shall be deemed to appoint Ideal
as its agent for the purposes of the Finance Documents by its execution of
an Accession Notice. The Agent may rely on a document signed by Ideal as if
it had been signed by any other Borrower or any Unsecured Guarantor. Ideal
may give a good receipt for any sum payable by any Finance Party to any
other Borrower or an Unsecured Guarantor. Any communication delivered to
Ideal shall be deemed to have been delivered to each of the Borrowers and
each Unsecured Guarantor. Any communication made by Ideal to the Agent or
any other Finance Party shall, to the extent permissible by law, be deemed
to have been made with the consent of each other Borrower and each
Unsecured Guarantor.
3.5 REPETITION OF REPRESENTATIONS
Delivery of an Accession Notice constitutes confirmation by the relevant
Additional Borrower or, as applicable, Unsecured Guarantor that the
representations and warranties set out in clause 14.1 which are required to
be repeated pursuant to clause 14.3 are true and correct in all material
respects in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.
3.6 INVOICE DISCOUNTING AGREEMENTS
By executing an Accession Notice an Additional Borrower shall accede to,
and be bound by, the IDF Guarantee as if it had been named in clause 7
(Guarantee) of the Third Supplemental Agreement as a Borrower.
39
4 ADDITIONAL CHARGING COMPANIES
4.1 REQUIREMENT
The Agent (acting on the instructions of the Lenders) may require that any
Group Company becomes a Charging Company by giving to Ideal not less than
10 business days' notice, provided that any Group Company which has acceded
to this Agreement as an Additional Borrower shall, unless the Agent
otherwise agrees, automatically be required to become a Charging Company
without the need for the Agent to serve a notice under this clause 4.
4.2 ACCESSION
The Group Company in respect of which the requirement is made (or, in the
case of an acceding Additional Borrower, is deemed to have been made)
pursuant to clause 4.1 shall become a Charging Company:
4.2.1 (other than in the case of a Group Company acceding to this Agreement
as an Additional Borrower (in which case, accession as a Charging
Company shall, unless the Agent otherwise agrees, be automatic)), if
the Lenders require the addition of that Group Company as a Charging
Company;
4.2.2 upon Ideal delivering to the Agent a duly completed and executed
Supplemental Deed or such other security document as the Agent may
require in form and substance satisfactory to the Agent;
4.2.3 if no Default has occurred or is likely to occur as a result of that
Group Company becoming a Charging Company; and
4.2.4 if the Agent has received all of the following documents and other
evidence in relation to that Group Company specified in Schedule 9
(which shall be required to be delivered within 60 days of receipt (or
deemed receipt) of notice under clause 4.1) and each is in form and
substance satisfactory to the Agent.
4.3 TIMING
The Agent shall notify Ideal and the Lenders promptly upon being satisfied
that it has received all of the documents and other evidence specified in
Schedule 9 in relation to the relevant Group Company and that each is in
form and substance satisfactory to it, whereupon subject always to clauses
4.2.1 to 4.2.3 (inclusive) the relevant Group Company shall become a
Charging Company.
4.4 IDEAL AS AGENT
Each Charging Company shall be deemed to appoint Ideal as its agent for the
purposes of the Finance Documents by its execution of a Supplemental Deed.
The Agent may rely on a document signed by Ideal as if it had been signed
by
40
each other Charging Company. Ideal may give a good receipt for any sum
payable by any Beneficiary to each other Charging Company. Any
communication delivered to Ideal shall be deemed to have been delivered to
each of the Charging Companies. Any communication made by Ideal to the
Agent shall, to the extent permissible by law, be deemed to have been made
with the consent of each other Charging Company.
4.5 REPETITION OF REPRESENTATIONS
Delivery of a Supplemental Deed constitutes confirmation by the relevant
Charging Company that the representations and warranties set out in clause
14.1 which are required to be repeated pursuant to clause 14.3 are true and
correct in all material respects in relation to it as at the date of
delivery as if made by reference to the facts and circumstances then
existing.
5 CONDITIONS PRECEDENT
The Lenders shall be under no obligation to make the Revolving Facility
available under this Agreement unless the Agent has received, or the
Lenders are satisfied that the Agent will receive at the same time as or
immediately prior to the making available of the Revolving Facility, in
form and substance satisfactory to it, all of the documents and evidence
referred to in Schedule 2 (save to the extent that the Agent may at any
time waive such receipt).
6 UTILISATION OF THE REVOLVING FACILITY
6.1 GENERAL CONDITIONS OF UTILISATION
The Lenders shall not be obliged to make the Revolving Facility available
and no Utilisation Notice in respect of the Revolving Facility shall become
effective unless the provisions with respect to Excess Availability
outlined at clause 16.2.14 are complied with;
and either:
6.1.1 no Default has occurred and is continuing or would occur if the
Revolving Facility was made available and the representations set out
in clauses 14.1 and 14.2 to be repeated on and as of the proposed date
for the making available of the Revolving Facility are true and
correct in all material respects on and as of such date; or
6.1.2 the Lenders have agreed (notwithstanding any such matter) to make the
Revolving Facility available and no notice of termination of this
Agreement has been given by Ideal as referred to in clause 29.
6.2 REVOLVING LOANS
Subject to the terms of this Agreement, a Revolving Loan will be made by
the Lenders to a Borrower on its request if:
41
6.2.1 not later than 11.00 am on the business day immediately prior to the
day which is the proposed date for the making of such Revolving Loan
(or three business days in the case of any Revolving Loan to be
denominated in a Foreign Currency), or such lesser period as the Agent
may agree prior to the proposed date for the making of such Revolving
Loan, the Agent has received from the relevant Borrower a Utilisation
Notice in respect of such Revolving Loan;
6.2.2 the proposed date for the making of such Revolving Loan is a business
day during the Commitment Period;
6.2.3 the Original Sterling Amount of the proposed amount of such Revolving
Loan is a minimum amount of L3,000,000 and an integral multiple
of L1,000,000 (or, where the Revolving Loan is to be made
pursuant to clause 6.8.3, an amount equal to the Original Sterling
Amount of the aggregate principal amount of the Swingline Loans then
outstanding) which is less than or equal to the lesser of the amount
of the Available Facility and the Available Revolving Facility Amount;
and
6.2.4 the proposed Interest Period in respect of such Revolving Loan is a
period of one, two or three months (or such other period as the Agent
may agree) ending on or before the Termination Date.
6.3 SWINGLINE LOANS
Subject to the terms of this Agreement, a Swingline Loan (which may be
denominated in sterling, dollars, euro or such other Foreign Currency as
the Swingline Lender may agree) will be made by the Swingline Lender to a
Borrower on its request if:
6.3.1 not later than 11.00 am on the day which is the proposed date for the
making of such Swingline Loan, the Agent has received from the
relevant Borrower a Utilisation Notice in respect of such Swingline
Loan;
6.3.2 the proposed date for the making of such Swingline Loan is a business
day during the Commitment Period.
6.4 LETTERS OF CREDIT AND GUARANTEES
Subject to the terms of this Agreement, if the Agent agrees with a Borrower
(acting on the instructions of the Issuer), the Issuer shall, at that
Borrower's request (contained in a Utilisation Notice) issue one or more
documentary letters of credit (each a "LETTER OF CREDIT") or Guarantees
(each a "GUARANTEE"), in each case denominated in sterling or any Foreign
Currency as the Issuer may agree, for that Borrower's account. The Issuer
will not issue any Letter of Credit or Guarantee:
42
6.4.1 if the Original Sterling Amount of the maximum face amount of the
requested Letter of Credit or of the maximum contingent liability
under the requested Guarantee, in each case plus all commissions, fees
and charges due from the relevant Borrower in connection with its
issue, would cause its Available Commitment or the Available Revolving
Facility Amount to be exceeded at such time;
6.4.2 if the expiry date of the Letter of Credit or Guarantee would be
later than 30 days prior to the Termination Date or a date falling
more than 12 months from its date of issue;
6.4.3 if the Original Sterling Amount of the maximum face amount of the
requested Letter of Credit or of the maximum contingent liability
under the requested Guarantee, when aggregated with the Original
Sterling Amount of the maximum face value of all Letters of Credit and
of the maximum contingent liability under all Guarantees, in each case
then in issue, would exceed L5,000,000,
unless the Issuer has specifically agreed with that Borrower that it is
prepared to do so.
6.5 UTILISATION NOTICES
6.5.1 Subject to the terms of this Agreement, each Utilisation Notice shall
be irrevocable and shall oblige the relevant Borrower to borrow the
amount so requested or, as the case may be, to give effect to the
Utilisation so requested on the date specified in such Utilisation
Notice upon the terms and subject to the conditions set out in this
Agreement.
6.5.2 The first Utilisation Notice delivered hereunder shall include a
request to draw down as part of the relevant Revolving Loan an amount
equal to the amount of any fees then due and payable to the Arranger,
the Agent and the Lenders and to such other valuers and professional
advisers as shall have been agreed with the Agent and the Lenders as
being payable therefrom and an authorisation and direction to the
Agent to appropriate for such purpose the proceeds of so much of the
relevant Revolving Loan as is required to satisfy the payment in full
of such fees.
6.6 TERMINATION OF COMMITMENTS
If it has not already been cancelled or otherwise reduced to zero prior to
such time the Commitment of each of the Lenders shall be reduced to zero at
close of business in London on the last day of the Commitment Period.
6.7 SPECIAL PROVISIONS RELATING TO REVOLVING LOANS
The Agent, in its discretion, may elect to allow the limits of the
Available Revolving Facility Amount to be exceeded on one or more
occasions, provided
43
that the Agent may never exceed the Maximum Revolving Credit Line. If the
Agent does exceed the limits of the Available Revolving Facility Amount, it
may not do so by an amount which exceeds five (5) per cent. of the amount
of the Maximum Revolving Credit Line and if it does exceed the limits of
the Available Revolving Facility Amount on any occasion, the Agent shall
not be deemed thereby to have changed such limits or to be obliged to
exceed such limits on any other occasion.
6.8 SPECIAL PROVISIONS RELATING TO SWINGLINE LOANS
6.8.1 NOTIFICATION: The Swingline Lender shall notify the Agent and the
Lenders at the end of each week of the net amount of Swingline Loans
then outstanding.
6.8.2 REPAYMENT OF SWINGLINE LOANS: The principal amount of the Swingline
Loans denominated in any currency shall be repaid on a daily basis by
the transfer of the full credit balance on each Receivables Account to
any loan account denominated in that currency maintained by each
Borrower with the Agent as contemplated in clause 20.8 or otherwise on
demand by the Swingline Lender, any such credit balance denominated in
any particular currency to be applied first to the unpaid principal
amount of Swingline Loans denominated in the same currency and
thereafter in or towards repayment of the unpaid principal amount of
any Swingline Loans denominated in any other currency, the manner and
extent of such application to be at the Agent's discretion.
6.8.3 REFUNDING OF SWINGLINE LOANS BY THE LENDERS: The Agent will not less
than weekly and may, at any time in its sole and absolute discretion
or upon request of the Swingline Lender, on behalf of the Borrowers
(each of which hereby irrevocably directs the Agent to act on its
behalf in this respect), give notice to the Lenders (including the
Swingline Lender) requiring that they make a Reference Rate Revolving
Loan to the relevant Borrower in an amount equal to the aggregate
principal amount of the Swingline Loans then outstanding together with
all interest accrued thereon but unpaid. Interest on any such
Reference Rate Revolving Loan shall be calculated and payable in
accordance with the provisions of clause 7.2.2.
6.8.4 APPLICATION OF REFERENCE RATE REVOLVING LOANS: Regardless of whether
the conditions in this Agreement for the making of Revolving Loans are
then satisfied, each Lender shall make its share of any Reference Rate
Revolving Loan referred to in clause 6.8.3 available to the Agent for
the benefit of the Swingline Lender on the date notice of the
requirement for any such Reference Rate Revolving Loan is given to the
Lenders.
6.9 SPECIAL CONDITIONS FOR ISSUE OF LETTERS OF CREDIT AND GUARANTEES
In addition to being subject to the satisfaction of the applicable
conditions precedent referred to in clause 5, the obligation of the Issuer
to issue any Letter of Credit or Guarantee is subject to the following
conditions having been satisfied in a manner satisfactory to the Agent:
44
6.9.1 the relevant Borrower shall have delivered to the Agent, at such
times and in such manner as the Agent may prescribe, an application in
form and substance satisfactory to the Agent for the issue of the
Letter of Credit or Guarantee and such other documents as may be
required pursuant to the terms thereof;
6.9.2 the form and terms of the proposed Letter of Credit or Guarantee
shall be satisfactory to the Agent and the Issuer; and
6.9.3 as of the date of issue, no order of any court, arbitrator or public
authority shall purport by its terms to prohibit or restrain the
Issuer or banks generally from issuing letters of credit or guarantees
of the type and in the amount of the proposed Letter of Credit or
Guarantee (as the case may be), and no law, rule or regulation
applicable to the Issuer or banks generally and no request or
directive (whether or not having the force of law) from any central
bank or public authority with jurisdiction over the Issuer or banks
generally shall prohibit, or request that the Issuer refrain from, the
issue of letters of credit or guarantees generally or the issue of
such Letter of Credit or Guarantee.
6.10 GENERAL CONDITIONS FOR ISSUE OF LETTERS OF CREDIT AND GUARANTEES
6.10.1 REQUESTS FOR ISSUE OF LETTERS OF CREDIT OR GUARANTEES: A Borrower
shall give to the Agent four business days' prior written notice of
that Borrower's request for the issue of any Letter of Credit or
Guarantee. In the case of a Guarantee, such notice shall specify the
maximum contingent liability to be guaranteed, the beneficiary in
whose favour the Guarantee is to be issued, the effective date of
issue of such Guarantee (which shall be a business day), details of
the obligation in respect of which the contingent liability might
arise and the date on which such obligation is due to mature or
expire. In the case of a Letter of Credit, such notice shall specify
the original face amount and currency denomination of the Letter of
Credit requested, the effective date of issue of such Letter of Credit
(which shall be a business day), whether such Letter of Credit may be
drawn in a single or partial draws, the date on which such Letter of
Credit is to expire and the beneficiary of such Letter of Credit.
6.10.2 NO EXTENSIONS OR AMENDMENT: The Issuer shall not be obliged to
extend or amend or cause to be extended or amended any Letter of
Credit or Guarantee it has issued.
6.10.3 EVENTS OF DEFAULT: The Issuer need not, before issuing a Letter of
Credit or Guarantee, make any enquiry or otherwise concern itself as
to whether any event has occurred which, under the terms hereof, would
relieve the Issuer from its obligations to issue that Letter of Credit
or Guarantee and accordingly none of the Borrowers nor any of the
Lenders shall have any right to resist any claim under clause 6.12 nor
otherwise on the ground that any such event had occurred before the
issue of the Letter of Credit or Guarantee, provided that, before
issuing a
45
Letter of Credit or Guarantee, the Issuer shall inform each of the Lenders
of any Event of Default of which it has actual notice.
6.11 COMPENSATION FOR LETTERS OF CREDIT AND GUARANTEES
Each Borrower agrees to pay to the Agent for the account of the Issuer with
respect to each Letter of Credit or Guarantee, the Letter of Credit and
Guarantee Fee and such other reasonable fees and other charges as are
charged by the Issuer for letters of credit or guarantees issued by it
including, without limitation its standard fees for issuing, administering,
amending, renewing, paying and cancelling letters of credit and guarantees
and all other fees associated with issuing or servicing letters of credit,
as and when assessed, all as specified in clause 22.5.
6.12 PAYMENTS PURSUANT TO LETTERS OF CREDIT AND GUARANTEES
6.12.1 DEMANDS UNDER A LETTER OF CREDIT OR GUARANTEE: If a demand for
payment is made under a Letter of Credit or Guarantee on the Issuer,
the Issuer shall promptly notify the Agent of such demand and pay the
sum demanded in accordance with the terms of the relevant Letter of
Credit or Guarantee, whereupon:
(a) the Agent shall not later than four hours after receipt of such
demand, if such demand is made prior to 1.00 pm (London time) on
any business day, or otherwise by 10.00 am (London time) on the
next succeeding business day, notify each Lender of the amount of
such demand and such Lender's proportion thereof which such
Lender shall be obliged to pay; and
(b) each Lender shall on the date of such notification make its share
of the amount demanded available to the Agent for the benefit of
the Issuer in immediately available funds.
If any Lender is unable to make its share of such amount available on
such date, it shall nevertheless do so as soon as possible thereafter
and in any event by no later than two business days after the date
notice of such requirement was given to it by the Agent, together with
interest thereon from the date of such notice to the date of payment
at the rate specified by the Agent as representing the Issuer's cost
of funds.
6.12.2 INDEMNITY: Each Borrower agrees to indemnify and hold harmless the
Issuer in sterling or sterling equivalent from and against all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable legal fees) which the Issuer may incur or
sustain as a consequence of the issue of any Letter of Credit or
Guarantee or the performance of its obligations thereunder (save where
the same are caused by the Issuer's gross negligence or wilful
misconduct). This is a continuing indemnity, extends to the ultimate
balance of each Borrower's obligations and liabilities under clause 6
and shall continue in force
46
notwithstanding any intermediate payment in whole or in part of those
obligations or liabilities.
6.12.3 PAYMENT OF LETTER OF CREDIT OR GUARANTEE OBLIGATIONS: Without
limiting or affecting any of the provisions of this clause 6.12, each
Borrower agrees to reimburse the Agent and each Lender for any draw
under any Letter of Credit or Guarantee immediately upon demand, and
to pay the Agent the amount of all other obligations and other amounts
payable to it under or in connection with any Letter of Credit or
Guarantee immediately when due, irrespective of any claim, set-off,
defence or other right which that Borrower may have at any time
against the Agent, the Lenders, the Issuer or any other person.
6.12.4 REFERENCE RATE REVOLVING LOANS TO SATISFY REIMBURSEMENT OBLIGATIONS:
If the Issuer honours a draw under any Letter of Credit or makes a
payment under a Guarantee and the relevant Borrower shall not have
repaid such amount to the Agent pursuant to clause 6.12.3, the
honouring of such draw or the making of such payment by the Issuer
shall of itself cause there to arise a Reference Rate Revolving Loan
by the Lenders of the amount of such draw or payment which Reference
Rate Revolving Loan that Borrower shall be obliged to repay
immediately. In the event of non-payment of such Reference Rate
Revolving Loan, interest thereon shall be calculated by reference to
successive periods of such duration as the Agent may select at a rate
per annum which is the sum of (i) two per cent (2%) (ii) the
Applicable Margin and (iii) the Reference Rate and shall be paid by
the relevant Borrower at the end of the period by reference to which
it is calculated or on such other date as the Agent may specify by
written notice to that Borrower. If not paid on the due date, the
interest shall be added to and form part of the Reference Rate
Revolving Loan on which interest shall accrue and be payable in
accordance with the provisions of this clause 6.12.4.
6.13 LETTERS OF CREDIT AND GUARANTEES - ASSUMPTION OF RISK
6.13.1 AUTHORISATIONS: Each of the Borrowers and the Lenders
unconditionally and irrevocably:
(a) authorise and direct the Issuer to pay any request or demand for
payment under and in accordance with any Letter of Credit or
Guarantee issued by it without requiring proof of the relevant
Borrower's agreement that any amount so demanded or paid is or
was due and notwithstanding that the relevant Borrower may
dispute the validity of any such request, demand or payment;
(b) confirms that the Issuer deals in documents only and shall not be
concerned with the legality of any claim under any Letter of
Credit or Guarantee or any other underlying transaction or any
set-off, counterclaim or defence as between the relevant Borrower
and any beneficiary of any Letter of Credit or Guarantee; and
47
(c) agrees that the Issuer need not have any regard to the
sufficiency, accuracy or genuineness of any such request or
demand or any certificate or statement in connection therewith or
any incapacity of or limitation upon the powers of any person
signing or issuing any such request, demand, certificate or
statement which appears on its face to be in order and agrees
that the Issuer shall not be obliged to enquire as to any such
matters and may assume that any such request, demand, certificate
or statement which appears on its face to be in order is correct
and properly made.
6.13.2 RIGHTS OF CONTRIBUTION AND SUBROGATION: Until all amounts which are
or may become payable by the Obligors under or in connection with the
Finance Documents have been irrevocably paid in full and the Agent,
the Issuer, the Swingline Lender and/or the Lenders are under no
liability hereunder, whether actual or contingent, no Borrower shall,
by virtue of any payment made by it under or in connection with or
referable to this clause 6 or otherwise be subrogated to any rights,
security or monies held or received by the Agent, the Lenders and/or
the Security Trustee or be entitled at any time to exercise, claim or
have the benefit of any right of contribution or subrogation or
similar right against any of them and each Borrower irrevocably waives
all rights of contribution or similar rights against each of them.
6.13.3 WAIVER OF DEFENCES: Each Borrower's obligations under this clause 6
shall not be affected by any act, omission, matter or thing which, but
for this provision, might reduce, release or prejudice any of its
obligations hereunder in whole or in part, including without
limitation and whether or not known to it:
(a) any time or waiver granted to or composition with any beneficiary
or any other person;
(b) any taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights, remedies or securities available to the Issuer or other
person or arising under any Letter of Credit or Guarantee; or
(c) any unenforceability, illegality or invalidity of any Letter of
Credit or Guarantee to the intent that each Borrower's
obligations under this clause 6 shall remain in full force and be
construed as if there were no such effect.
6.14 SUPPORTING LETTER OF CREDIT; CASH COLLATERAL
If, notwithstanding the provisions of this clause 6 and clause 29 any
Letter of Credit or Guarantee is outstanding upon the termination of this
Agreement, then upon such termination each Borrower shall deposit with the
Security Trustee, at its discretion, with respect to each Letter of Credit
or Guarantee then outstanding, in its favour and at its request either:
48
6.14.1 a standby letter of credit (a "SUPPORTING LETTER OF CREDIT") in form
and substance satisfactory to the Agent and the Security Trustee,
issued by an issuer satisfactory to the Lenders in an amount equal to
the greatest amount for which such Letter of Credit may be drawn (or,
as the case may be, the maximum contingent liability under such Letter
of Credit or Guarantee) together with all fees, expenses and charges
in respect thereof (together the "MAXIMUM LIABILITY") under which
Supporting Letter of Credit the Security Trustee is entitled to draw
amounts necessary to reimburse the Issuer (through the Agent) for
payments made by the Issuer under such Letter of Credit or Guarantee;
or
6.14.2 cash in an amount equal to such maximum liability.
Such Supporting Letter of Credit or deposit of cash shall be held by the
Security Trustee as security for, and to provide for the payment of, the
aggregate face amount of all Letters of Credit or, as the case may be, the
aggregate maximum contingent liability under all Guarantees, remaining
outstanding.
6.15 AGENT LOANS
6.15.1 AUTHORISATION: Subject to the provisions of this clause 6.15, the
Agent is hereby authorised by each Borrower and the Lenders, from time
to time in the Agent's reasonable discretion, after the occurrence of
a Default or an Event of Default which is continuing unremedied or
unwaived or at any time that any of the other conditions to the making
available of any Loans hereunder have not been satisfied (and provided
in any such case that it is impractical to contact the Lenders), to
make Reference Rate Revolving Loans (but in any event not to exceed
the Available Facility) to a Borrower on behalf of the Lenders which
the Agent, in its reasonable business judgement, deems necessary or
desirable (i) to preserve or protect any Collateral, (ii) to enhance
the likelihood of, or maximise the amount of, repayment of any of the
Outstandings or (iii) to pay any other amount chargeable to that
Borrower pursuant to the terms of this Agreement, including without
limitation any costs, fees and expenses (any such Reference Rate
Revolving Loan described in this clause 6.15 being an "AGENT LOAN").
6.15.2 REVOCATION OF AUTHORISATION: The Lenders may at any time revoke the
Agent's authorisation contained in clause 6.15.1 to make Agent Loans,
any such revocation to be in writing and to become effective only upon
the Agent's actual receipt thereof.
6.15.3 REPAYMENT: Agent Loans shall constitute Reference Rate Revolving
Loans under this Agreement repayable by the relevant Borrower on
demand and shall bear interest at the rate per annum applicable to
Reference Rate Revolving Loans plus 2%. The Agent shall notify each
Lender in writing of each Agent Loan that it makes.
49
6.15.4 SETTLEMENT: It is agreed that each Lender shall participate in each
such Reference Rate Revolving Loan constituted by an Agent Loan in an
amount equal to its Participating Proportion of the amount of such
Reference Rate Revolving Loan. Notwithstanding such agreement, the
Agent and the Lenders agree (which agreement shall not be for the
benefit of or enforceable by the Borrowers) that in order to
facilitate the administration of this Agreement settlement of Agent
Loans shall take place on a periodic basis on such date or dates as
the Agent may specify by written notice to the Lenders. On receipt of
any such notice, each Lender shall make an amount equal to its
Participating Proportion of the outstanding principal amount of the
Agent Loans in respect of which settlement is requested available to
the Agent in immediately available funds to such account of the Agent
as the Agent may designate, not later than 2.00 pm on the proposed
settlement date (which shall be not less than three business days
following the date of such notice). If any such amount is not made
available to the Agent by any Lender on such settlement date, such
Lender shall pay such amount to the Agent on demand together with
interest thereon from such settlement date to the date of actual
payment calculated at a rate per annum which is the sum of (i) two per
cent (2%) (ii) the Applicable Margin and (iii) the Reference Rate.
6.16 PARTICIPATION AND NOTIFICATION
6.16.1 PARTICIPATION BY LENDERS: Each Lender will participate through its
Facility Office in each Utilisation hereunder, comprising the making
of the Revolving Loans, or in any amount to be reimbursed to the
Swingline Lender or the Issuer following any non-payment by any
Borrower of any amount due from it in respect of a Swingline Loan or,
as appropriate, a Letter of Credit or Guarantee, in the proportion
which its Commitment bears to the Total Commitments immediately prior
to the making available of that Utilisation or, as the case may be, at
the time of any such non-payment.
6.16.2 NOTIFICATION TO LENDERS: The Agent shall, promptly after receipt by
it of a Utilisation Notice, notify each Lender of the details of such
notice and of the amount of that Lender's share of the Utilisation to
be made available to the relevant Borrower.
6.17 AGGREGATE EXPOSURE
The Aggregate Exposure shall at no time exceed the Maximum Revolving Credit
Line and if at any time this limit is exceeded as a consequence of currency
fluctuations, the Borrowers shall provide cash cover in an amount equal to
such excess.
7 INTEREST AND INTEREST PERIODS
7.1 DATES OF PAYMENT OF INTEREST
Each Revolving Loan shall bear interest on its unpaid principal amount from
the date made until paid in cash at a rate determined by reference to the
Reference
50
Rate or to LIBOR, as applicable, and the relevant Borrower shall pay
accrued interest on each such Revolving Loan (i) in the case of each
Reference Rate Revolving Loan, on the first day of each month thereafter
and (ii) in the case of each LIBOR Revolving Loan, on the last day of each
Interest Period relating to such LIBOR Revolving Loan.
7.2 RATE OF INTEREST
7.2.1 The rate of interest applicable to a LIBOR Revolving Loan from time
to time during an Interest Period relating to it shall be the rate per
annum which is the sum of (i) the Applicable Margin at such time, (ii)
LIBOR relating to such LIBOR Revolving Loan for such Interest Period
and (iii) the Mandatory Cost, if any, applicable to that LIBOR
Revolving Loan.
7.2.2 The rate of interest applicable to a Swingline Loan and each
Reference Rate Revolving Loan shall be a fluctuating rate per annum
which is the sum of the Reference Rate and the Applicable Margin. Each
change in the Reference Rate shall be reflected in such interest rate
as of the effective date of such change.
7.3 INTEREST PERIODS - LIBOR REVOLVING LOANS
Save as otherwise provided in this Agreement, the duration of each Interest
Period relating to a LIBOR Revolving Loan shall be the period selected by
the relevant Borrower in the Utilisation Notice relating to that LIBOR
Revolving Loan.
7.4 MAXIMUM NUMBER OF INTEREST PERIODS
A Borrower may not select an Interest Period in respect of any LIBOR
Revolving Loan of such a duration that there shall at any time be more than
five Interest Periods in existence at the same time.
7.5 CONVERSION AND CONTINUATION OF REVOLVING LOANS
7.5.1 Ideal (on behalf of the Borrowers) may, upon irrevocable written
notice to the Agent in accordance with clause 7.5.2:
(a) at any time after the Outstandings in respect of Reference
Revolving Rate Loans are equal to or exceed an amount equal to an
Original Sterling Amount of L20,000,000 elect, as of any business
day, in the case of Reference Rate Revolving Loans, to convert
any such Reference Rate Revolving Loans (or any part thereof) in
an amount or integral multiple of not less than L1,000,000 into
LIBOR Revolving Loans;
(b) elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Revolving Loans having Interest Periods
expiring on such day (or any part thereof) in an amount or
integral multiple of not less than L1,000,000.
51
7.5.2 If any Revolving Loans are to be converted into or continued as LIBOR
Revolving Loans, Ideal shall deliver a notice of conversion or
continuation (a "NOTICE OF CONVERSION/CONTINUATION") to be received by
the Agent not later than 11.00 a.m. at least 1 business day (in the
case of any Revolving Loan denominated in sterling) and at least 3
business days (in the case of any Revolving Loan denominated in a
Foreign Currency), in advance of the proposed date of conversion or
continuation specifying:
(a) the proposed date of such conversion or continuation;
(b) the aggregate amount of Revolving Loans to be converted or
continued; and
(c) the type of Revolving Loans resulting from the proposed
conversion or continuation.
7.5.3 If upon drawdown of any Revolving Loan or upon the expiry of any
Interest Period applicable to any LIBOR Revolving Loan, Ideal has
failed to select a new Interest Period to be applicable thereto or if
any Default or Event of Default then exists, Ideal shall be deemed to
have elected to convert such LIBOR Revolving Loan into a Reference
Rate Revolving Loan as of the expiry date of such Interest Period.
7.5.4 During the existence of a Default or an Event of Default, Ideal may
not elect to have a Revolving Loan converted into or continued as a
LIBOR Revolving Loan.
7.6 MARGIN RATCHET
7.6.1 If EBITDA to Cash Outflow exceeds a ratio of 1.00:1 for the Financial
Quarter ending 31 December 2003, the Applicable Margin shall, with
effect from 1st February 2004, be reduced to two and one quarter of
one per cent (2.25%) per annum. In addition, the Agent and the Lenders
agree with the Borrowers that the level of the Applicable Margin will
be reviewed by the Agent on the date upon which the Agent receives all
of the signed, audited Financial Statements of every member of the
IHL/BB Group for the Financial Year ended 31 December 2004, required
to be delivered pursuant to clause 15.1 (such date being, the "REVIEW
DATE") together with a consolidation, in accordance with Applicable
GAAP, of such Financial Statements. Each Borrower acknowledges and
agrees that notwithstanding any extension(s) of the Termination Date
which may be agreed to pursuant to clause 9.5, the Agent will not
review the Applicable Margin and the Applicable Margin may not be
reduced on more than one occasion. The Agent and the Lenders agree
with Ideal and each other Borrower that, provided that the conditions
set out in clause 7.6.2 are satisfied on the Review Date, the
Applicable Margin shall be adjusted in accordance with this clause 7.6
with effect from the date determined in accordance with clause 7.6.5.
7.6.2 If on the Review Date, the Agent's review of the financial
performance of the IHL/BB Group during the immediately preceding
Financial Year indicates that
52
actual EBITDA achieved in such Financial Year exceeded the projected
EBITDA for such Financial Year (as set out in the projections
delivered to the Agent prior to the Effective Date) by an amount equal
to or greater than twenty per cent. (20%) of such projected EBITDA,
then the Applicable Margin shall be reduced by 0.125 per cent per
annum.
7.6.3 For the avoidance of doubt, the original or most recently adjusted
Applicable Margin for the Revolving Facility shall continue to apply
if the condition set out in clause 7.6.2 is not met.
7.6.4 Any decrease of the Applicable Margin pursuant to this clause 7.6
shall be determined by the Agent by reference to the signed, audited
Financial Statements for the relevant period delivered to the Agent
under clause 15.1.
7.6.5 Any adjustment of the Applicable Margin in accordance with clause
7.6.2 shall take effect in respect of any Reference Rate Revolving
Loan, LIBOR Revolving Loan or Swingline Loan, with effect from the
Review Date.
7.6.6 At any time while a Default has occurred and is continuing, the
original Applicable Margin for the Revolving Facility shall apply with
immediate effect, notwithstanding any previous reduction of such
Applicable Margin made pursuant to this clause 7.6 and no reduction
shall be instituted while a Default has occurred and is continuing.
8 MARKET DISRUPTION
8.1 CIRCUMSTANCES
If at or about 11.00 am on the Quotation Date for an Interest Period in
respect of any LIBOR Revolving Loan the Agent (in consultation with the
Lenders) determines it is not possible by reason of circumstances affecting
the London Interbank Market generally (i) to determine LIBOR in accordance
with its definition, or (ii) for the Lenders to obtain requisite matching
deposits in the required currency in the London Interbank Market at the
relevant time to fund their respective shares during such Interest Period,
or (iii) for the Majority Lenders to obtain such deposits for such period
at a cost less than or equal to the rate offered to the Agent in accordance
with the definition of LIBOR, then the Agent shall forthwith notify Ideal
and the Lenders and notwithstanding the provisions of clause 7, the
Interest Period in respect of that LIBOR Revolving Loan and the amount of
interest payable in respect of that LIBOR Revolving Loan during its
Interest Period shall be determined in accordance with the following
provisions of this clause 8.
8.2 APPLICABLE INTEREST RATE
If clause 8.1 applies in relation to a LIBOR Revolving Loan the duration of
the Interest Period relating to that Loan shall be one month or, if less,
such that it shall end on the Termination Date and the rate of interest
applicable to that
53
LIBOR Revolving Loan during its Interest Period shall be the rate per annum
which is the sum of (i) the Applicable Margin, (ii) the Mandatory Cost, if
any, and (iii) the rate determined by the Agent (and notified to Ideal) to
be that which expresses as a percentage rate per annum the weighted average
of the cost to each of the Lenders of funding its share of such LIBOR
Revolving Loan during such Interest Period from whatever sources and in
whatever manner each such Lender may reasonably select.
8.3 REVIEW OF CIRCUMSTANCES
So long as any alternative basis for the calculation of interest as
provided in clause 8.2 is in force the Agent shall from time to time review
whether or not the circumstances referred to in clause 8.1 still prevail
with a view to returning to the normal provisions of this Agreement
relating to the determination of the rates of interest applicable to any
LIBOR Revolving Loan.
8.4 DISTRIBUTION OF INTEREST
Interest on a LIBOR Revolving Loan during an Interest Period relating to it
calculated at the rates specified in clause 8.1 or 8.2 shall be distributed
by the Agent to the Lenders in proportion to the amounts which represent
the cost to each Lender of funding its share of such LIBOR Revolving Loan
during such Interest Period provided that any such interest which is
attributable to the Applicable Margin shall be distributed by the Agent to
the Lenders in proportion to their respective shares in such LIBOR
Revolving Loan.
9 REPAYMENT, PREPAYMENT AND CANCELLATION
9.1 REPAYMENT OF REVOLVING LOANS
Each Borrower shall repay each LIBOR Revolving Loan made to it, together
with accrued but unpaid interest thereon, on the last day of the Interest
Period applicable to that Loan. Each Borrower may repay each Reference Rate
Revolving Loan and each Swingline Loan made to it, together with accrued
but unpaid interest thereon, at any time. Each Borrower shall, in any
event, repay the outstanding principal balance of all Revolving Loans made
to it, plus all accrued but unpaid interest thereon, upon the termination
of this Agreement for any reason. In addition, and without limiting the
generality of each foregoing, each Borrower shall pay to the Agent, on
demand, the amount by which the Original Sterling Amount of the unpaid
principal balance of any Revolving Loans and any Swingline Loans when
aggregated with the Original Sterling Amount of the maximum face amount of
all Letters of Credit and the maximum contingent liability under all
Guarantees then in issue (together "CONTINGENCY OUTSTANDINGS") at any time
exceeds the Available Facility in respect of the Revolving Facility or the
Available Revolving Facility Amount, the Available Facility and Available
Revolving Facility Amount being determined for this purpose as if the
amount of the Revolving Loans, Swingline Loans and
54
contingency outstandings were zero. Subject to the other terms of this
Agreement and to availability, Revolving Loans and Swingline Loans may be
reborrowed.
9.2 CANCELLATION OF TOTAL COMMITMENTS
Any Borrower may, by giving to the Agent not less than 30 business days'
prior notice to that effect, permanently cancel the whole (but subject to
clause 29) or any part (being a minimum amount of L5,000,000 and an
integral multiple of L1,000,000) of the Total Commitments, provided
that both on the date of such notice and upon the effective date of
cancellation, the amount to be so cancelled does not exceed an amount equal
to the difference between the Maximum Revolving Credit Line and the
Aggregate Exposure and the Agent has not, pursuant to clause 6.7, permitted
the limits of the Available Revolving Facility Amount to have been
exceeded. Any such cancellation shall reduce the Commitment of each Lender
pro rata. If a Borrower cancels any part (but not the whole) of the Total
Commitments, Ideal shall (or shall procure that such other Borrower shall)
pay to the Agent (for the rateable benefit of the Lenders), on or prior to
the date of such cancellation:
9.2.1 2% of the amount of the Total Commitments so cancelled, if such
cancellation is made on or prior to the first Anniversary Date;
9.2.2 1% of the amount of the Total Commitments so cancelled, if such
cancellation is made on or prior to the second Anniversary Date; and
9.2.3 0.5% of the amount of the Total Commitments so cancelled, if such
cancellation is made at any time after the second Anniversary Date but
on or before the third Anniversary Date.
9.3 PREPAYMENT AND CANCELLATION OF INDIVIDUAL LENDERS
If a Borrower becomes obliged to pay an increased amount pursuant to
clauses 10.1 or 11.1 or any Lender claims indemnification from Ideal under
clause 10.2 or clause 11.1 and the Agent receives from Ideal at least
fifteen days' prior notice of the intention of the Borrowers to prepay such
Lender's Outstandings, such Lender shall, upon receipt by the Agent of such
notice, cease to be obliged to participate in any further Loans, its
Commitment shall be permanently cancelled and reduced to zero and each
Borrower shall on the last day of each of the then current Interest Periods
or earlier, if the Agent or such Lender so requires, prepay such Lender's
portion of the Loan to which such Interest Period relates together with any
applicable break costs payable under clause 19.2 but otherwise without
premium or penalty.
9.4 NOTICES IRREVOCABLE
Any notice of cancellation or prepayment given by a Borrower (or Ideal on
its behalf) pursuant to clause 9.2 or clause 9.3 shall be irrevocable,
shall specify the date upon which such prepayment is to be made and the
amount of such
55
prepayment and shall oblige that Borrower to make such prepayment on such
date. A Borrower shall not be entitled to reborrow any amount so prepaid.
9.5 EXTENSION OF TERMINATION DATE
9.5.1 Not earlier than 90 but not later than 60 days prior to the second
Anniversary Date (and if the Termination Date is extended in
accordance with this clause 9.5, prior to any subsequent Anniversary
Date), Ideal may deliver a request to the Agent (which the Agent shall
promptly forward to the Lenders), requesting that the Lenders shall
extend the maturity of the Revolving Facility for a further period of
twelve (12) months from the then applicable Termination Date (as the
same may be extended from time to time under this clause 9.5).
9.5.2 The decision whether or not to extend the Termination Date shall be
in the absolute discretion of the Agent to determine (acting on the
instructions of all of the Lenders) and shall be based upon such
factors as the Agent may deem relevant (including, without limitation,
the business condition (financial or otherwise) of the Group at the
relevant time and after reviewing such forecasts, projections and
financial and other information regarding the Borrowers and the Group
as the Agent may require. The Borrowers acknowledge that the Agent and
the Lenders shall not be under any obligation to extend the
Termination Date.
9.5.3 If extended pursuant to this clause 9.5, references to the
"TERMINATION DATE" in this Agreement and the other Finance Documents
shall be construed as a reference to the Termination Date as from time
to time extended.
10 TAXES
10.1 REQUIREMENT TO GROSS-UP
All payments to be made by any of the Obligors to any person under this
Agreement shall be made free and clear of and without deduction for or on
account of tax unless such Obligor is required by law to make such a
payment subject to the deduction or withholding of tax, in which case the
sum payable by such Obligor in respect of which such deduction or
withholding is required to be made shall be increased to the extent
necessary to ensure that, after the making of such deduction or withholding
(including any deduction or withholding applicable to additional sums
payable under this clause), such person receives and retains (free from any
liability in respect of any such deduction or withholding) a net sum equal
to the sum which it would have received and so retained had no such
deduction or withholding been made or been required to be made.
10.2 INDEMNITY
Without prejudice to the provisions of clause 10.1, if any person or the
Agent is required to make any payment on account of tax (other than tax on
its overall net income) on or calculated by reference to the amount of any
Loan made or to be made under this Agreement or by reference to any Letter
of Credit or Guarantee
56
issued under this Agreement and/or by reference to any sum received or
receivable under this Agreement by such person or the Agent on its behalf
(including, without limitation, any sum received or receivable under this
clause 10) or any liability in respect of any such payment is asserted,
imposed, levied or assessed against such person or the Agent on its behalf,
the relevant Obligor shall, upon demand of the Agent, promptly indemnify
such person against such payment or liability, together with any interest,
penalties and expenses payable or incurred in connection therewith provided
that the foregoing shall not apply to the extent that the payment or
liability (a) is compensated for by an increased payment under clause 10.1
or (b) would have been so compensated but was not so compensated, solely
because one of the exclusions in clause 10.6 applied.
10.3 NOTIFICATION
A Lender intending to make a claim pursuant to clause 10.2 shall notify the
Agent of the event by reason of which it is entitled to do so whereupon the
Agent shall notify the relevant Obligor.
10.4 TAX RECEIPTS
Without prejudice to the provisions of clause 10.1, if any Obligor makes
any payment under this Agreement in respect of which it is required by law
to make any deduction or withholding it shall pay the full amount to be
deducted or withheld to the relevant taxation or other authority within the
time allowed for such payment under applicable law and shall deliver to the
Agent (no later than one week after the end of the time allowed for such
payment under applicable law) an original receipt or other appropriate
evidence issued by such authority evidencing the payment to such authority
of all amounts so required to be deducted or withheld from such payment.
10.5 TAX CREDITS
If any Obligor makes an increased payment under clause 10.1 for the account
of any person and such person in its sole opinion and based on its own
interpretation of any relevant laws or regulations (but acting in good
faith) determines that it has received or been granted a credit against or
relief or remission for or in respect of any tax paid or payable by it in
respect of or calculated by reference to the deduction or withholding
giving rise to such payment, such person shall, to the extent that it
determines that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or payment and, to the extent it
is reasonably identifiable and quantifiable, as soon as practicable pay to
such Obligor an amount equal to such part or all of such credit, relief,
remission or repayment as can be made available to such Obligor in such a
way as to leave such person (after such payment) in no better or worse
position than it would have been in if such Obligor had not been required
to make such deduction or withholding. Nothing contained in this clause
10.5 shall interfere with the right of a person to arrange its tax affairs
in whatever manner it thinks fit nor oblige any
57
person to disclose any information relation to its tax affairs or any
computation in respect thereof.
10.6 LIMITATION ON REQUIREMENT TO GROSS-UP
10.6.1 If any Lender ceases to be a Qualifying Lender, no Obligor shall be
liable to pay to such Lender under clause 10.1 any amount in excess of
the amount it would have been obliged to pay if such Lender had not
ceased to be a Qualifying Lender provided that this clause 10.6 shall
not apply and each Obligor shall continue to be obliged to comply with
its obligations under clause 10 if and to the extent that after the
date of this Agreement there shall have been any change in, or in the
interpretation, administration or application of, any relevant law or
double taxation treaty or any published practice or concession of any
relevant taxing authority and as a result of such change (i) such
Lender ceases to be a Qualifying Lender or (ii) such Obligor would be
required to make a deduction or withholding on account of tax
irrespective of whether the recipient of the relevant payment was or
was not a Qualifying Lender.
10.6.2 No Obligor shall be liable to make a payment to a Lender under
Clause 10.1 if on the date on which the payment falls due the relevant
Obligor is able to show that the payment could have been made to such
Lender without any deduction or withholding had such Lender complied
with its obligations under clause 10.7.
10.7 DOUBLE TAXATION RELIEF
If, and to the extent that, the effect of clause 10.1 or 10.2 can be
mitigated by virtue of the provisions of any applicable double tax treaty
entered into by the United Kingdom (whether by a claim to repayment of any
taxes referred to in clause 10.1 or 10.2 or otherwise) each Lender agrees
to co-operate (to the extent reasonably required) with affected Obligor(s)
with a view to submitting any forms required for the purpose of ensuring
the application of such double tax treaty so far as relevant, provided that
no Lender shall be required pursuant to this clause 10.7 to complete or
co-operate in completing any form which is not substantially similar to any
form in use at the date of this Agreement for the purpose of claiming
exemption or relief from or repayment of taxes envisaged hereunder pursuant
to a double taxation treaty between the United Kingdom and such Lender's
jurisdiction of residence and which requires the Lender to undertake
obligations which, in its reasonable opinion, are more onerous than those
imposed upon it as at the date of this Agreement.
11 INCREASED COSTS
11.1 INCREASED COSTS AND REDUCTION OF RETURN
If the Agent or, as the case may be, any Lender, in its sole discretion
determines that, as a result of (i) the introduction of, or any change in
any law or in any treaty, directive or regulation (whether or not having
the force of law but if not having the force of law, only if such treaty,
directive or regulation is generally
58
applicable to banks and of the type with which the relevant Lender is
accustomed to comply) or the interpretation or application thereof, in each
case after the date hereof, or (ii) compliance with any request from or
requirement (whether or not having the force of law but if not having the
force of law, only if such request or requirement is generally applicable
to banks and of the type with which the relevant Lender is accustomed to
comply) of any central bank or other fiscal, monetary or other authority
made or imposed after the date hereof:
11.1.1 it incurs a cost in assuming or maintaining all or any part of any
Commitment under this Agreement and/or in making, maintaining or
funding all or any part of its Outstandings or any unpaid sum and/or
assuming or maintaining a contingent liability under or pursuant to
this Agreement (whether under any Letter of Credit or Guarantee or
otherwise), or that cost is increased; or
11.1.2 any sum received or receivable by it under this Agreement or the
effective return to it under this Agreement is reduced; or
11.1.3 it suffers a reduction in the rate of return on its overall capital
below that which might reasonably have been anticipated at the date of
this Agreement and which it would have been able to achieve but for
having entered into and/or performing its obligations and/or assuming
or maintaining a commitment or contingent liability under or pursuant
to this Agreement; or
11.1.4 it makes any payment or forgoes any interest or other return on or
calculated by reference to the amount of any sum received or
receivable by it under or pursuant to this Agreement; or
11.1.5 it incurs a cost or increased cost, or suffers a reduction in any
amount payable to it or in the effective return on its capital, or
forgoes any interest or any other return as a result of the
introduction of, changeover to or operation of the euro in the United
Kingdom,
and in any such case, the same is attributable to its liabilities or
obligations under this Agreement, then the person concerned shall notify
the Agent of the relevant event (setting out in reasonable detail the basis
on which its claim has been computed) promptly upon its becoming aware of
the same, whereupon the Agent shall notify Ideal and, upon demand of the
Agent, Ideal shall pay, or shall procure that there is paid, on demand to
the Agent for the account of the person concerned an amount sufficient to
indemnify that person against the relevant cost, increased cost, reduction,
reduction in the rate of return, payment or forgone interest or other
return or such proportion thereof as is, in the opinion of such person,
attributable to its obligations under or pursuant to this Agreement.
59
11.2 CAPITAL ADEQUACY
If the Agent, or as the case may be, any Lender, in its sole discretion
determines that (i) the introduction of, or any change in, any capital
adequacy regulation or in the interpretation or application thereof, in
each case after the date hereof, or (ii) compliance by such person or any
corporation controlling it with any capital adequacy regulation, affects or
would affect the amount of capital, reserves or special deposits required
or expected to be maintained by such person or any corporation controlling
it and (taking into consideration such person's or such corporation's
policies with respect to capital adequacy) determines that the amount of
such capital, reserves or special deposits is increased as a consequence of
its loans, contingent liabilities or obligations under this Agreement then,
upon demand of the Agent (having been so notified by such person) to Ideal,
Ideal shall pay, or shall procure that there is paid, to the Agent for the
account of the person concerned, from time to time as specified by the
Agent, additional amounts sufficient to compensate such person for such
increase.
11.3 EXCEPTIONS
Clauses 11.1 and 11.2 do not apply to any cost, increased cost, reduction,
reduction in the rate of return, payment or forgone interest or other
return compensated for by (a) payment of the Mandatory Cost, (b) by the
operation of clause 10, (c) by a change in the rate of tax on the overall
net income of the Agent or any Lender or (d) which is attributable to the
wilful breach by the relevant Lender or any of its Affiliates of any law or
regulation.
12 ILLEGALITY
12.1 CONSEQUENCES OF ILLEGALITY
If at any time it is unlawful, or contrary to any directive or request of
any applicable central bank or other fiscal, monetary or other authority,
or impossible for a Lender to make, fund or allow to remain outstanding any
Loan made or to be made under this Agreement or to assume or remain under
any obligations hereunder in relation to or under any Letter of Credit or
Guarantee, then the Agent shall, promptly after becoming aware of the same,
deliver to Ideal a certificate to that effect and:
12.1.1 such Lender shall not thereafter be obliged to make or participate
in any Loan under this Agreement or (in the case of the Issuer) issue
any Letter of Credit or Guarantee and its Commitment shall immediately
be cancelled and reduced to zero; and
12.1.2 if the Agent on behalf of such Lender so requires, each Borrower
shall on the last day of the Interest Period for each such Loan
occurring after the Agent has notified Ideal or (if earlier) on such
date as the Agent shall have specified (being no earlier than the last
day upon which the Lender is legally able to permit such Loans to
remain
60
outstanding) repay such Lender's Outstandings together with accrued
interest thereon (any such repayment to be without premium or penalty
or the payment of any amount to be calculated in accordance with
clause 29.2.3) and all other amounts owing to such Lender under this
Agreement, and, with respect to any Letter of Credit or Guarantee then
outstanding, deposit with the Security Trustee for the benefit of the
Issuer a Supporting Letter of Credit or cash, in either such case in
the same manner as contemplated in clause 6.14.
12.2 MITIGATION OF ADVERSE CIRCUMSTANCES
If, in respect of any Lender, circumstances arise which would, or would
upon the giving of notice, result in additional amounts becoming payable
under clause 10 or clause 11.1 or result in a cancellation of its
Commitment pursuant to clause 12.1.1 then, without in any way limiting,
reducing or otherwise qualifying the obligations of any Borrower hereunder
such Lender will, at the request of Ideal, consider means of mitigating the
effects of such circumstances provided that such Lender shall be under no
obligation to take any such action if to do so would or might in its
opinion have an adverse effect on its business, operations or financial
condition.
13 GUARANTEE
13.1 GUARANTEE
Each Unsecured Guarantor, jointly and severally, unconditionally and
irrevocably guarantees to the Beneficiaries the due and punctual payment,
performance and discharge by the Obligors of all the monies, obligations
and liabilities (whether present or future, actual or contingent) on the
part of the Obligors to be paid, performed or discharged, whether directly
or indirectly, under or pursuant to the terms of this Agreement and/or in
connection with the Facility and/or otherwise under the Finance Documents
(together in this clause 13 the "GUARANTEED OBLIGATIONS"). If and whenever
any Obligor shall default in the payment, discharge or performance of any
of the guaranteed obligations, each Unsecured Guarantor shall, upon written
demand by the Agent, promptly pay, perform or discharge the guaranteed
obligations in respect of which such default has been made.
13.2 INDEMNITY
Each Unsecured Guarantor agrees to indemnify and hold harmless the
Beneficiaries from time to time on demand for and against any loss incurred
by any of them as a result of any of the guaranteed obligations being or
becoming void, voidable or unenforceable for any reason whatsoever, whether
known to such person or persons or not. The amount of such loss shall be
the amount which the person or persons suffering it would otherwise have
been entitled to recover from the Obligors.
61
13.3 CONTINUING SECURITY
The obligations of each Unsecured Guarantor under this Agreement are
continuing obligations and shall remain in force until all of the
guaranteed obligations have been satisfied in full. The obligations of each
Unsecured Guarantor under this Agreement shall not be (or be construed so
as to be) discharged by any intermediate discharge or payment of or on
account of any of the guaranteed obligations or any settlement of account
or any other matter (other than the discharge in full of the guaranteed
obligations).
13.4 PROTECTIVE PROVISIONS
Neither the obligations of each Unsecured Guarantor nor the rights and
remedies of the Beneficiaries under this Agreement, any other Finance
Document or otherwise conferred by law shall be discharged, prejudiced or
impaired by reason of:
13.4.1 any variation of any of the guaranteed obligations or of the terms
of conditions of this Agreement, any other Finance Document or of any
encumbrance, guarantee or other assurance held or to be held as
security for the payment, performance or discharge of the guaranteed
obligations (any such encumbrance, guarantee or other assurance
together referred to in this clause 13 as "RELATED SECURITY");
13.4.2 any failure (whether intentional or not) to take, perfect or realise
(whether in full or in part) any related security now or in the future
agreed to be taken in respect of any of the guaranteed obligations;
13.4.3 any incapacity or change in the constitution of any party to this
Agreement, any other Finance Document or to any related security;
13.4.4 any of the guaranteed obligations or any obligation of any person
under any related security being or becoming invalid, illegal, void or
unenforceable for any reason;
13.4.5 any time or other indulgence given or agreed to be given to, or any
composition or other arrangement made with or accepted from, any
Obligor in respect of any of the guaranteed obligations or any other
person in respect of any of its obligations under any related
security;
13.4.6 any waiver or release of any of the guaranteed obligations or of any
obligation of any person under any related security or any failure to
realise, in full or in part, the value of, or any discharge or
exchange of any related security;
13.4.7 any Obligor or any other person party to this Agreement, any other
Finance Document or any related security being wound up, going into
administration or liquidation or making any composition or
62
arrangement with its creditors (whether or not sanctioned by the court
and whether or not the Agent has agreed to such compromise or
arrangement) and so that where, by virtue of any compromise or
arrangement, any of the guaranteed obligations are transferred to any
other person, the guarantee and indemnity of each Unsecured Guarantor
contained in this Agreement shall take effect as if the expression
"Obligor" included such other person; or
13.4.8 any other act, event or omission which, but for this provision,
would or might operate to offer any legal or equitable defence for or
impair or discharge any of the guaranteed obligations or any
obligation of any person under any related security or prejudicially
affect the rights or remedies of the Beneficiaries or any of them
under this Agreement, any other Finance Document or otherwise
conferred by law.
13.5 INDEPENDENT OBLIGATIONS
The obligations of each Unsecured Guarantor under this Agreement are
additional to, and not in substitution for, any related security and the
obligations assumed by each Unsecured Guarantor under this Agreement may be
enforced without first having recourse to any related security and without
making or filing any claim or proof in a winding-up or dissolution of any
Obligor or any other person party to this Agreement or any related security
or first taking any steps or proceedings against any Obligor or any such
person.
13.6 NON-COMPETITION
Until all of the guaranteed obligations have been satisfied in full, no
Unsecured Guarantor shall:
13.6.1 exercise any right of subrogation, indemnity, set-off or
counterclaim against any Obligor, any other Unsecured Guarantor or any
person party to any related security;
13.6.2 claim payment of any other monies for the time being due to it by
any Obligor, any other Unsecured Guarantor or any person party to any
related security by reason of the performance by it of its obligations
under this Agreement or on any account whatsoever or exercise any
other right or remedy or enforce any encumbrance, guarantee or other
assurance which it has in respect thereof;
13.6.3 claim any contribution from any other Unsecured Guarantor or any
person party to any related security;
13.6.4 negotiate, assign, charge or otherwise dispose of any monies,
obligations or liabilities now or at any future time due or owing to
it by any Obligor or any other Unsecured Guarantor or any person party
to
63
any related security or any encumbrance, guarantee or other assurance
in respect thereof; or
13.6.5 claim or prove in a winding up or dissolution of any Obligor or any
other Unsecured Guarantor in competition with the Beneficiaries or any
of them; and
13.6.6 if any Unsecured Guarantor receives any sums in contravention of
this clause 13.6, it shall hold them on trust to be applied promptly
in or towards the satisfaction of its obligations under this
Agreement.
13.7 WARRANTY
Each Unsecured Guarantor warrants that it has not taken, and agrees that
(without the prior written consent of the Agent acting on the instructions
of the Majority Lenders) it will not take, from any Obligor, any other
Unsecured Guarantor or any person party to any related security any
encumbrance, guarantee or other assurance in respect of or in connection
with its obligations under this Agreement. If any Unsecured Guarantor takes
any such encumbrance, guarantee or other assurance in contravention of this
clause 13.7, it shall hold the same on trust for the Beneficiaries until
such time as all of the guaranteed obligations have been satisfied in full
and shall on request promptly deposit the same with and/or charge the same
to the Agent for and on behalf of itself and such persons in such manner as
the Agent may require as security for the due performance and discharge by
the relevant Unsecured Guarantor of the guaranteed obligations
13.8 SUSPENSE ACCOUNT
If any Obligor or any of the Unsecured Guarantors is wound up, goes into
liquidation or makes any composition or arrangement with its creditors,
neither the existence of the guarantee of the relevant Unsecured Guarantor
contained in this Agreement nor any monies received or recovered by the
Beneficiaries or any of them under to pursuant to this Agreement shall
impair the right of such persons to prove in such winding-up, liquidation,
composition, or arrangement for the total amount due from the Obligor or
the relevant Unsecured Guarantor. The Agent may at any time and from time
to time place and, for so long as it thinks fit, keep any monies received
or recovered under this Agreement in a separate or suspense account, in
such name as it thinks fit, without any intermediate obligation on its part
to apply the same in or towards discharge of any part of such total amount,
provided that if the monies are at any time sufficient to discharge the
guaranteed obligations in full, they shall promptly be so applied.
13.9 CONDITIONAL DISCHARGE
Any settlement or discharge between any of the Unsecured Guarantors and the
Arranger, the Agent, the Lenders or any of them shall be conditional upon
no security or payment to the Arranger, the Agent and the Lenders or any of
them by any Obligor or the relevant Unsecured Guarantor or any other person
being
64
avoided or set aside or ordered to be refunded or reduced by or pursuant to
any applicable law or regulation and, if such condition is not satisfied,
the Arranger, the Agent and the Lenders shall each be entitled to recover
from the relevant Unsecured Guarantor on demand the value of any such
security or the amount of any such payment as if such settlement or
discharge had not occurred.
14 REPRESENTATIONS AND WARRANTIES
14.1 GENERAL REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants (in respect of itself and each other
Obligor) to and for the benefit of each other party to this Agreement that,
except as disclosed to and accepted by the Agent in writing:
14.1.1 STATUS: (other than in the case of BMEP) it is a limited liability
company duly incorporated or a corporation duly organised and validly
existing under the laws of its jurisdiction of incorporation and BMEP
is a partnership properly established and validly existing under the
laws of the Netherlands, in each case having the power and authority
to own its assets and to conduct the business and operations which it
conducts or proposes to conduct;
14.1.2 POWERS AND AUTHORITY: it has full power and authority to enter into
and perform each of the Relevant Agreements to which it is or will be
a party and any other document to be entered into by it pursuant
thereto and has taken all necessary corporate or other action to
authorise the execution, delivery and performance of each such
Relevant Agreement and each such other document;
14.1.3 AUTHORISATIONS: save for any necessary registrations which will be
made within the applicable registration period, all actions,
conditions and things required by all applicable laws and regulations
to be taken, fulfilled, obtained or done in order (i) to enable it
lawfully to enter into, exercise its rights under and perform and
comply with its obligations under each of the Relevant Agreements to
which it is or will be a party and any other document to be entered
into pursuant thereto (ii) to ensure that those obligations are valid,
legally binding and enforceable in accordance with their respective
terms and (iii) to make each of the Relevant Agreements and all such
other documents admissible in evidence in England and Wales and, if
different, its jurisdiction of incorporation have been taken,
fulfilled, obtained or done;
14.1.4 NON-VIOLATION: the execution by it of and the exercise by it of its
rights and performance of or compliance with its obligations under
each of the Relevant Agreements to which it is or will be a party do
not and will not violate (i) any law or regulation to which it or any
of its assets is subject or (ii), to an extent or in a manner which
has or could have a
65
material adverse effect on it, any agreement to which it is a party or
which is binding on it or its assets or conflict with its
constitutional documents and in particular will not cause any limit on
its borrowing or other powers or the exercise of such powers by its
board of directors to be exceeded;
14.1.5 OBLIGATIONS BINDING: subject to the Reservations, its obligations
under each of the Relevant Agreements are legal, valid and binding and
enforceable in accordance with their respective terms;
14.1.6 LITIGATION: save as disclosed in writing to and agreed by the Agent
prior to the date of this Agreement, it is not involved or engaged in
any litigation, arbitration or administrative proceedings (whether as
plaintiff or defendant) nor, to the best of its knowledge is any such
litigation, arbitration or administrative proceedings threatened, nor
are there any circumstances likely to give rise to any such
litigation, arbitration or proceedings which in any such case may have
a material adverse effect on it, any other Obligor or on the Group
(taken as a whole);
14.1.7 NO DEFAULT: it is not in breach of or default under any agreement or
arrangement (including, without limitation, under any Relevant
Agreement) or any statutory or legal requirement to an extent or in a
manner which has or could have a material adverse effect on it or on
any other Obligor and no Event of Default has occurred and is
continuing;
14.1.8 EXISTING ENCUMBRANCES: no encumbrance exists over its present or
future assets except for Permitted Encumbrances;
14.1.9 FUTURE ENCUMBRANCES: the execution by it of each of the Relevant
Agreements to which it is or will be a party and the exercise by it of
its rights and performance of or compliance with its obligations
thereunder will not result in the existence of or oblige it to create
any encumbrance over all or any of its present or future assets except
for Permitted Encumbrances;
14.1.10 FINANCIAL STATEMENTS:
(a) its audited consolidated Financial Statements were prepared in
accordance with Applicable GAAP and give a true and fair view of
the financial condition of the Group at the date as of which they
were prepared and the results of the Group's business and
operations during the Financial Year then ended and (in the case
of its Financial Statements) disclose or reserve against all
liabilities (contingent or otherwise) of each Group Company as at
that date and all unrealised or anticipated losses
66
from any commitment entered into by each Group Company and which
existed on that date;
(b) the Latest Projections represent its best estimate of the Group's
future financial performance for the periods referred to in them
and have been prepared on the basis of the stated assumptions,
which it believes are fair and reasonable in the light of current
and reasonably foreseeable business conditions;
(c) the Ideal Pro Forma Balance Sheet presents fairly and accurately
the financial condition of the IHL Group as at such date, and has
been prepared in accordance with Applicable GAAP;
14.1.11 CAPITALISATION: the Adjusted Tangible Net Worth is not less than
L26,936,000, BMEBV's authorised share capital consists of EUR90,000 of
which 200 shares of EUR100 are validly issued and fully paid and are
owned beneficially by BMEP and Ideal's authorised share capital
consists of 5,000,000 ordinary shares of L1 per share and 5,000,000
preference shares of L1 per share, of which 4,000,500 ordinary shares
and 1,225,963 preference shares are validly issued and fully paid and
are beneficially owned by BMEBV, in the case of the ordinary shares,
and the Parent, in the case of the preference shares;
14.1.12 INDEBTEDNESS: no Group Company has any indebtedness except for
Permitted Indebtedness;
14.1.13 DISTRIBUTIONS: since 1 January 2002 no Distribution has been
declared, paid, or made upon or in respect of any shares or other
securities of any Group Company other than in accordance with the
provisions of clause 16.3.3;
14.1.14 TITLE TO ASSETS: except for assets which are leased, it is the
beneficial owner free from all encumbrances (other than Permitted
Encumbrances) of all its other assets including, without limitation,
the assets reflected on the most recent Financial Statements delivered
to the Agent, except as disposed of since the date thereof in the
ordinary course of trading;
14.1.15 LABOUR DISPUTES: there is no pending or, to the best of its
knowledge, threatened strike, work stoppage, material unfair labour
practice claim, or other material labour dispute against or affecting
its or its employees;
14.1.16 ENVIRONMENTAL LAWS: to the best of its knowledge and belief (having
made all due and reasonable enquiry) it has not breached any
Environmental Law and no condition exists or act or event has occurred
which will or might reasonably be expected to give rise to
67
any breach of, or any liability of any kind under, any Environmental
Law;
14.1.17 ENVIRONMENTAL AUTHORISATIONS: to the best of its knowledge and
belief (having made all due and reasonable enquiry) it is in
possession of all Environmental Authorisations required for the
conduct of its business or operations (or any part thereof) and it has
not breached any of the terms or conditions of any such Environmental
Authorisation;
14.1.18 NOTICES OF ENVIRONMENTAL BREACHES: (i) it has not received any
summons, complaint, order or similar written notice that it is not in
compliance with, or any public authority is investigating its
compliance with, any Environmental Law or that it is or may be liable
to any other person as a result of a potential or actual Discharge of
a Hazardous Substance and (ii) none of its present or past operations
is the subject of any investigation by any public authority evaluating
whether any remedial action is needed to respond to a potential or
actual Discharge of a Hazardous Substance;
14.1.19 NO DEPOSIT OF HAZARDOUS SUBSTANCES: to the best of its knowledge
and belief (having made all due and reasonable enquiry) no Hazardous
Substance has at any time been used, disposed of, generated, stored,
transported, dumped, released, deposited, buried, discharged or
emitted at, on, from or under any premises owned, leased, occupied or
controlled by it;
14.1.20 LIABILITY FOR ENVIRONMENTAL CLAIMS: it has not entered into any
negotiations or settlement agreements with any person (including,
without limitation, any prior owner of its property) imposing material
obligations or liabilities on it with respect to any remedial action
in response to the potential or actual Discharge of a Hazardous
Substance or environmentally related claim;
14.1.21 TAXES: it has filed all tax returns and other reports required to
be filed and has paid all taxes imposed on it or upon any of its
assets that are due and payable (save for any that are being contested
in good faith and by appropriate action and in respect of which it has
provided or maintained adequate reserves to meet any such liability);
14.1.22 MATERIAL ADVERSE CHANGE: there has been no material adverse change
in its financial condition or the financial condition of the Group
(taken as a whole) since the date of the Pro-Forma Balance Sheet nor
in the consolidated financial condition, business, assets or
operations of the Group nor in the Collateral since that date which
will nor might reasonably be expected to result in a material adverse
effect;
14.1.23 INFORMATION: all factual information delivered by it or on its
behalf to the Agent in connection with the business, operations and
assets of the
68
Group or in connection with any of the Relevant Agreements from time
to time was, in each such case at the date of its delivery, true and
correct in all material respects and not misleading and all
expressions of opinion, forecasts and projections have been arrived at
in good faith and have been based upon reasonable grounds;
14.1.24 INFORMATION MEMORANDUM: (a) all statements of fact contained in the
Information Memorandum relating to the Group are, or will be, true in
all respects material to the Revolving Facility, (b) all expressions
of opinion or expectations and all forecasts and projections provided
in the Information Memorandum, have been, or will be, arrived at in
good faith and have been, or will be, based upon reasonable grounds
(in each case as at the date at which they are, or will be, made or
expressed to be made and in final form), and (c) it is not aware,
having made all due and reasonable enquiry, of any facts or
circumstances that have not been disclosed to the Agent, the Arranger
and the Lenders which would, if disclosed, be reasonably likely to
affect the decision of a person considering whether or not to provide
finance to the Borrowers;
14.1.25 DEDUCTIONS AND WITHHOLDINGS: it is not required to make any
deduction or withholding from any payment it may make under this
Agreement;
14.1.26 WINDING-UP: neither it nor any other Group Company has taken any
corporate action nor have any other steps been taken or legal
proceedings been started or (to the best of its knowledge and belief)
threatened against it or any Group Company for its winding-up,
dissolution or re-organisation (other than for the purposes of a bona
fide solvent scheme of reconstruction or amalgamation previously
approved in writing by the Agent) or for the appointment of a
receiver, administrator, administrative receiver, trustee or similar
officer of it or of any or all of its assets.
14.2 ACCOUNTS
Each Obligor represents and warrants to and for the benefit of each other
party to this Agreement that, except as disclosed to and accepted by the
Agent in writing:
14.2.1 ACCOUNTS:
(a) each existing Account represents, and each future Account will
represent, a bona fide sale or lease and delivery of goods by a
Trading Company, or the rendering of services by a Trading
Company, in the ordinary course of such Trading Company's
business;
(b) each existing Account is, and each future Account will be, for a
liquidated amount payable by the Account Debtor thereon on the
terms
69
set forth in the invoice therefor or in the schedule thereof
delivered to the Agent, without set-off, deduction, defence, or
counterclaim;
(c) no payment will be received with respect to any Account, and no
credit, discount, or extension, or agreement therefor will be
granted on any Account, except as reported to the Agent in
accordance with this Agreement;
(d) each copy of an invoice delivered to the Agent will be a genuine
copy of the original invoice sent to the Account Debtor named in
it; and
(e) all goods described in any invoice representing a sale of goods
will have been delivered to the Account Debtor and all services
of any Trading Company described in any invoice will have been
performed;
14.2.2 INVENTORY: with effect from any Inventory Eligibility Date, in
relation to each Trading Company, all of its Inventory is and will be
held for sale or lease, or to be furnished in connection with the
rendering of services in the ordinary course of its business and is
and will be fit for such purpose and will be kept by it, at its own
expense, in good and marketable condition (save for damaged or
obsolete items as notified to and agreed by the Agent).
14.3 REPETITION
Each of the representations and warranties in clauses 14.1 and 14.2 will be
correct and complied with on the date of this Agreement and the Effective
Date and (other than the representations in clauses 14.1.10(c), 14.1.13,
14.1.24 and 14.1.25) will also be correct and complied with on each date on
which a Loan is requested or to be made (or, as the case may be, a Letter
of Credit or Guarantee is issued or requested to be issued) as if repeated
then by reference to the then existing circumstances.
15 FINANCIAL CONDITION
15.1 BOOKS AND RECORDS
15.1.1 MAINTENANCE: BMEH shall maintain, and shall procure that each Group
Company shall maintain, at all times, books, records and accounts
which are complete and correct in all material respects and in
relation to which timely entries are made of their transactions in
accordance with Applicable GAAP. BMEH shall, and shall procure that
each Group Company shall, by means of appropriate entries, reflect in
such accounts and in all Financial Statements proper liabilities and
reserves for all taxes and proper provision for depreciation and
amortisation of any property or asset and bad debts, all in accordance
with Applicable GAAP. BMEH shall, and shall procure that each Group
Company shall, maintain at all times books and records pertaining to
any applicable Collateral in such detail, form and scope as the Agent
shall reasonably require, including without limitation records of (i)
all payments received and all credits
70
and extensions granted with respect to the Accounts; (ii) the return,
rejection, repossession, stoppage in transit, loss, damage or
destruction of any Inventory; and (iii) all other dealings affecting
the Collateral.
15.1.2 ACCESS: BMEH and/or, as applicable, Ideal shall, upon receiving not
less than two business days' notice from the Agent (or without notice
following a Default which is continuing), permit and procure that each
Group Company permits the Agent or any person authorised by the Agent
at any reasonable time to have access to its premises and books,
records and accounts and to make extracts from and take copies of such
books, records and accounts.
15.2 PROVISION OF FINANCIAL INFORMATION
BMEH, BMEP, BMEBV, BMEE and Ideal shall each deliver to the Agent in
sufficient copies for each of the Lenders:
15.2.1 FINANCIAL STATEMENTS: as soon as the same become available, but in
any event within 120 days after the end of each Financial Year, the
audited consolidated Financial Statements of the Group for such
Financial Year together with (i) the audited statutory accounts of
each Group Company for such Financial Year and (ii) a consolidation of
such audited Financial Statements for each member of the IHL/BB Group
and to the extent that any Financial Statements have been prepared in
accordance with or otherwise converted to or conformed with US GAAP,
such Financial Statements shall be accompanied by a note or similar
document prepared by the Auditors (or prepared by the Parent and
signed by the Auditors) which (a) reconciles the Financial Statements
to the Management Accounts delivered for the relevant Financial Year
pursuant to clause 15.2.2 and (b) explains, in reasonable detail, any
changes or adjustments made to the figures contained in such
Management Accounts, to comply with US GAAP;
15.2.2 MANAGEMENT ACCOUNTS: as soon as the same become available, but in
any event within 25 days of the end of each Management Accounting
Period, Management Accounts of itself and each member of the Group
(other than the members of the Solutions Group) (incorporating,
without limitation, a break-out of all intercompany balances) as at
the end of and for that Management Accounting Period and, in relation
to the Management Accounting Periods ending on 31 March, 30 June, 30
September and 31 December in each year, within 45 days of the end of
such Financial Quarter a consolidation of those Management Accounts
showing the consolidated and consolidating financial position for the
Financial Quarter ending on each such date and for the Financial Year
to date and a further consolidation of those Management Accounts
showing the consolidated and consolidating financial position for the
Financial Quarter ending on each such date and for the Financial Year
to date of each member of the IHL/BB Group;
71
15.2.3 LATEST PROJECTIONS: no sooner than 90 days and no later than 15 days
prior to the beginning of each Financial Year, consolidated and
consolidating projected balance sheets, statements of income and
expense and statements of cash flow for the IHL/BB Group and the Group
as at the end of and for each month of such Financial Year;
15.2.4 CAPITAL EXPENDITURE: within 45 days after the end of each Financial
Quarter, a report of the Capital Expenditure of the Group for such
Financial Quarter and forecast of the projected Capital Expenditure
for the remainder of the then current Financial Year or, in the case
of the last Financial Quarter in any Financial Year, for the following
Financial Year;
15.2.5 TAXES AND CLAIMS: together with the Management Accounts delivered
under clause 15.2.2 and a certificate signed by the finance director
of Ideal that all the sums referred to in clause 16.2.6 have been paid
in respect of the period covered by such Management Accounts;
15.2.6 GENERAL INFORMATION: at the same time as sent to its shareholders or
creditors generally, any circular, document or other written
information sent to its shareholders or creditors as such or the
shareholders or creditors of any other Obligor; and
15.2.7 OTHER INFORMATION: from time to time on the request of the Agent,
such information about the business, operations and financial
condition of each Group Company as the Agent may reasonably require,
other than any information disclosure of which will cause such Group
Company to breach any confidentiality undertaking to which it is a
party, in which case it shall and shall procure that any relevant
Group Company shall, use all reasonable efforts to procure the consent
of the counterparty to such undertaking to make disclosure.
15.3 FINANCIAL INFORMATION - BASIS OF PREPARATION
BMEH, BMEP, BMEBV, Ideal and BMEE shall each ensure that:
15.3.1 TRUE AND FAIR VIEW: each set of Financial Statements delivered by it
or at its request pursuant to clause 15.2.1 is prepared (except as
stated therein) using the same accounting principles and policies as
were used in the preparation of the Ideal Pro-Forma Balance Sheet and
gives a true and fair view of the financial condition of the IHL/BB
Group and of the Group, as the case may be, as at the end of the
period to which those Financial Statements relate and of the result of
their respective businesses and operations during such period;
15.3.2 AUDIT: each set of Financial Statements delivered by it or at its
request pursuant to clause 15.2.1 has been audited by the Auditors and
each set of Management Accounts delivered by it pursuant to clause
15.2.2 has
72
been certified as being correct by Ideal (acting through its finance
director), subject to normal year-end adjustments;
15.3.3 CERTIFICATE OF IDEAL: each set of Financial Statements delivered
pursuant to clause 15.2.1 and each set of Management Accounts
delivered by it pursuant to clause 15.2.2 in respect of a Management
Accounting Period ending on the last day of any Financial Quarter (as
consolidated for that Financial Quarter) is accompanied by a
certificate of Ideal (acting through its finance director) setting
forth in reasonable detail the calculations required to establish that
Ideal was in compliance with its covenants set forth in clause 15.4
during the period covered in such Financial Statements (or, as the
case may be, during such Financial Quarter) and stating that, except
as explained in reasonable detail in such certificate:
(a) all of the representations and warranties of each Obligor
contained in this Agreement and the other Finance Documents are
correct and complete as at the date of such certificate as if
made at such time; and
(b) no Event of Default then exists or existed during the period
covered by such Financial Statements or, as the case may be,
Management Accounts,
and describing and analysing in reasonable detail all material trends,
changes and developments in such Financial Statements or Management
Accounts. If such certificate discloses that a representation or warranty
is not correct or complete, or that a covenant has not been complied with,
or that an Event of Default existed or exists, such certificate shall set
forth what action Ideal or the relevant Obligor has taken or proposes to
take with respect thereto.
15.4 FINANCIAL RATIOS
Ideal shall ensure that, at all times, the consolidated financial condition
of the IHL/BB Group shall be such that Adjusted Tangible Net Worth shall
not at any time be less than L26,936,000 as determined at the end of each
Financial Quarter by reference to the accounting information (the "RELEVANT
ACCOUNTING INFORMATION") most recently delivered under this Agreement being
(i) the Financial Statements delivered under clause 15.2.1 and (ii) each
set of Management Accounts (consolidated and consolidating for the relevant
Financial Quarter) delivered under clause 15.2.2.
In this Agreement, unless the context otherwise requires:
"ADJUSTED TANGIBLE ASSETS": means all of the IHL/BB Group's assets except:
(i) deferred assets, other than prepaid insurance and prepaid taxes;
73
(ii) patents, copyrights, trademarks, trade names, franchises, goodwill and
other similar intangibles;
(iii) Restricted Investments;
(iv) unamortised debt discount and expense;
(v) assets constituting Intercompany Accounts; and
(vi) fixed assets to the extent of any write-up in the book value thereof
resulting from a revaluation effective after the date of this
Agreement; and
"ADJUSTED TANGIBLE NET WORTH": means, at any date:
(i) the book value (after deducting related depreciation, amortisation,
valuation and other proper reserves as determined in accordance with
Applicable GAAP) at which the Adjusted Tangible Assets would be shown
on a consolidated balance sheet of the IHL/BB Group at such date
prepared in accordance with Applicable GAAP; less
(ii) the amount at which the IHL/BB Group's liabilities would be shown on
such balance sheet, including as liabilities all reserves for
contingencies and other potential liabilities which would be required
to be shown on such balance sheet.
15.5 CHANGES IN BASIS OF PREPARATION OF RELEVANT ACCOUNTING INFORMATION
Where any Relevant Accounting Information to be delivered under clause 15
has been prepared in a manner which is inconsistent with the accounting
principles or policies in accordance with which the Pro-Forma Balance Sheet
was prepared, whether as a result of any change in such principles or
otherwise, BMEH or Ideal shall provide to the Agent a written explanation
of any such inconsistency, together with details of its effects. If any
such inconsistency would be likely to affect the ability of the Agent to
satisfy itself from the information delivered as Relevant Accounting
Information as to compliance with the provisions of clause 15.4, the Agent
shall have the right to adjust the financial ratios set out in clause 15.4
or the relevant definitions set out in clause 15.5 so as to reflect so far
as is practicable the effect of any such change (provided that the effect
of such adjustments, taking into consideration such change, shall not be
such as to render the said financial ratios more onerous upon Ideal than as
at the date of this Agreement).
16 COVENANTS
16.1 DURATION
The undertakings in this clause 16 shall remain in force from the date of
this Agreement and so long as any amount is outstanding under this
Agreement.
74
16.2 POSITIVE COVENANTS
Each Obligor undertakes that:
16.2.1 CONSENTS: it will, and will procure that each of the Obligors will,
obtain, comply with the terms of and do all that is necessary to
maintain in full force and effect all authorisations, approvals,
licences and consents required by all applicable laws and regulations
to enable it lawfully to enter into, perform and comply with its
obligations under each of the Relevant Agreements to which it is or
will be a party and any document to be entered into pursuant thereto
or to ensure the legality, validity, enforceability or admissibility
in evidence of such Relevant Agreements and each such document in
England and Wales and, if different, its jurisdiction of incorporation
and any jurisdiction in which any of its assets may be situated;
16.2.2 INSURANCE: it will maintain, and procure that each Obligor
maintains, policies of insurance on and in relation to its business
and assets with financially sound and reputable insurers acceptable to
the Agent against such risks and to such extent as is usual for
companies carrying on a business such as that carried on by it and
each Obligor whose practice is not to self insure;
16.2.3 COMPLIANCE WITH LAW: it will comply, and will procure that each
Obligor complies, with all applicable laws and regulations including,
without limitation, any applicable Environmental Law;
16.2.4 ENVIRONMENTAL LAWS: it will, and will procure that each Obligor
will, take prompt and appropriate action to respond to and remedy any
non-compliance with any Environmental Law and shall regularly report
to the Agent on such response and remedying. Without limiting the
generality of the foregoing, whenever Ideal gives notice to the Agent
of such non-compliance pursuant to clause 16.2.7 Ideal will, at the
Agent's request and Ideal's expense:
(a) cause an independent environmental engineer acceptable to the
Agent to investigate and conduct such tests of the site where any
Obligor's non-compliance or alleged non-compliance with any
Environmental Law has occurred and prepare and deliver to the
Agent a report setting forth the results of such tests, a
proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof; and
(b) provide to the Agent a supplemental report of such engineer
whenever the scope of the environmental problems, or Ideal's
response thereto or the estimated costs thereof, changes;
75
16.2.5 CONDUCT OF BUSINESS it has, and will ensure that each Obligor has,
the right to conduct its business and operations as they are conducted
in all applicable jurisdictions and will do, and will procure that
each Obligor does, all things necessary (including compliance with all
terms and conditions of any licences and consents) to obtain, preserve
and keep in full force and effect all rights, licences and consents)
to obtain, preserve and keep in full force and effect all rights,
licences and authorisations (including, without limitation, all
Environmental Authorisations) and consents as are necessary for the
conduct of such business and operations;
16.2.6 PAYMENT OF TAXES AND CLAIMS: (a) it will, and will procure that each
Obligor will, and BMEBV will procure that each Baby Bell will, duly
and punctually pay and discharge (i) all taxes imposed upon it or its
properties (save where the same are being contested in good faith and
by appropriate proceedings and where adequate reserves are being
maintained with respect thereto) and (ii) all lawful claims which, if
unpaid, would by law become encumbrances upon any of its properties;
and
(b) BMEBV will procure that each Baby Bell will duly and punctually
pay and discharge all obligations to:
(i) pay all emoluments and benefits to which its employees are
entitled (including, without limitation, all wages and salaries,
sick pay, maternity pay, pension contributions, bonuses,
commission, any liability to taxation (including income tax and
national insurance contributions deducted or deductible from such
amounts under the PAYE system in the United Kingdom or such
equivalent taxation and social security payments)) in the
relevant Jurisdiction; and
(ii) comply with (in all material respects) all statutes,
regulations and collective agreements relevant to the conditions
of service of its employees or to the relations between it and
its employees (or former employees, as the case may be), any
recognised trade union or works council and the laws applicable
to the employment of the employees in the relevant Jurisdiction;
16.2.7 NOTICES TO AGENT: Ideal will notify the Agent in writing of the
following matters at the following times (each such notice to describe
the subject matter thereof in reasonable detail and to set out the
action that Ideal or the relevant Obligor has taken or proposes to
take with respect thereto):
76
(a) immediately after becoming aware of the existence of any Default;
(b) immediately after becoming aware that any shareholder in, or any
creditor of, any Obligor has given notice or taken any action
with respect to a claimed default by such Obligor and in
circumstances where such shareholder or creditor has taken or is
threatening to take any action or steps which will or might
reasonably be expected to have a material adverse effect;
(c) immediately after becoming aware of any material adverse change
in the assets, business, operations or condition (financial or
otherwise) of any Obligor or of the Group (taken as a whole);
(d) immediately after becoming aware of any pending or threatened
action, suit, proceeding or counterclaim by any person which may
have a material adverse effect on any Obligor, or any pending or
threatened investigation by a public authority;
(e) immediately after becoming aware of any pending or threatened
strike, work stoppage, material unfair labour practice claim, or
other material labour dispute affecting any Obligor;
(f) immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a public authority
applicable to any Obligor or its assets which may have a material
adverse effect on it or on such Obligor;
(g) immediately after becoming aware of any violation by any Obligor
of any Environmental Law or immediately upon receipt of any
notice (including a works notice) delivered pursuant to any
Environmental Law or of any notice that a public authority has
asserted that any Obligor is not in compliance with any
Environmental Law or that its compliance is being investigated;
(h) ten (10) days prior to any Obligor changing its name or the
address of its registered office;
(i) immediately upon becoming aware that any Group Company has
received a notice or other document from any of its suppliers
notifying such Group Company of a breach by such Group Company of
any supply agreement to which it is a party;
77
16.2.8 HEDGING: Ideal and each other relevant Borrower shall, within 60
days of the Closing Date or, in the case of any Additional Borrower,
within 60 days of the date upon which it becomes an Additional
Borrower, enter into such Hedging Agreements with a Hedge Provider as
the Agent may require (after consultation with Ideal) and in such form
as the Agent (acting reasonably) may require;
16.2.9 CHESSINGTON PROPERTY/ST. CRISPIN PROPERTY: Ideal shall or shall
procure that Bell Microproducts Limited or, as the case may be, Open
PSL Limited shall promptly notify the Agent of any proposed
refinancing of all or any part of the financial indebtedness secured
by any encumbrance over the Chessington Property or, as the case may
be, the St. Crispin Property and shall not complete such refinancing
without the relevant Chessington Mortgagee or, as the case may be, St
Crispin Mortgagee having entered into any intercreditor deed or other
priority arrangements in form and substance mutually acceptable to the
relevant replacement Chessington Mortgagee, Bell Microproducts Limited
and the Agent (in the case of the Chessington Property) or the
relevant replacement St. Crispin Mortgagee, Open PSL Limited and the
Agent (in the case of the St. Crispin Property);
16.2.10 AMENDMENT OF MATERIAL CONTRACTS: it will not and will procure that
none of the Trading Companies shall amend or terminate any of the
Material Contracts or agree to waive any material or persistent breach
of any of the Material Contracts without the prior written consent of
the Agent;
16.2.11 AMENDMENT TO OR BREACH OF MATERIAL CONTRACT OR STANDARD TERMS OF
BUSINESS: it will and will procure that each relevant Trading Company
will promptly (a) notify the Agent of any proposed material change in,
or amendment to, the standard terms and conditions of business that it
has entered into with its suppliers or which it requires its customers
to enter into (including, without limitation, any material change to
any retention of title or similar provisions) and will not agree to or
make any such proposed material change without the prior approval of
the Agent (such approval not to be unreasonably withheld or delayed)
and (b) notify the Agent of any material or persistent breach by any
such Trading Company or any other person of any of the Material
Contracts and, if relevant, of any steps being taken or proposed to
remedy such breach and shall further notify the Agent of any proposal
to or purported repudiation or cancellation of, any of the Material
Contracts;
16.2.12 ADDITIONAL SECURITY: without prejudice to the obligations of each
of the Obligors pursuant to the Security Documents to which each of
them it is expressed to be a party, it will grant or procure that
there is granted to the Security Trustee, such new or further security
("ADDITIONAL SECURITY") over any business, shares or other assets
78
which may be acquired pursuant to any Pre-Approved Acquisition or any
other acquisition permitted pursuant to the Finance Documents; any
such additional security shall be in such form and contain such terms
and conditions as the Agent or the Lenders (having carried out all
necessary due diligence) may require having regard to the nature and
location of the assets in question and shall be required to be
effected in favour of the Security Trustee within 90 days (or such
later date as the Agent may agree) of the date of completion of the
relevant acquisition; it will provide the Security Trustee with such
evidence as the Security Trustee may require that all applicable laws
and regulations relating to the execution of such additional security
have been duly complied with (including any statutory declarations
and/or special resolutions required under sections 155 and 156
Companies Act 1985; all costs and expenses (including legal fees)
incurred by any of the Beneficiaries in preparing, negotiating and
perfecting any such additional security shall be for the account of
Ideal;
16.2.13 DORMANT COMPANIES: it will ensure that each of the Dormant
Companies remains dormant and promptly notify the Agent of any
proposal for any of such companies to recommence trading, which they
shall not be permitted to do unless Ideal has received the prior
written consent of the Agent;
16.2.14 EXCESS AVAILABILITY: the Borrowers will ensure that the average
daily Excess Availability (calculated for each month on the last day
of such month) shall be not less than L4,000,000; and
16.2.15 EC INSOLVENCY REGULATION: it will maintain, and procure that all
other members of the IHL Group maintain, its centre of main interests
(within the meaning of the EC Insolvency Regulation) in the United
Kingdom.
16.3 NEGATIVE COVENANTS
Each Obligor undertakes that:
16.3.1 ENCUMBRANCES: it will not, and will ensure that no Obligor will,
without the prior consent of the Agent, create, agree to create or
permit to subsist any encumbrance on or over their respective assets
to secure any indebtedness of any person other than the following:
(a) any encumbrance on or over the assets of any Obligor subsisting
at the date of this Agreement or, in the case of Open PSL
Limited, at the date of the Second Supplemental Agreement and
agreed to by the Agent (and in the case of the encumbrances held
by the Chessington Mortgagee or the St. Crispin Mortgagee, any
replacement thereof) provided that, (save for indebtedness
secured as at the date of this Agreement
79
by any encumbrance created in favour of the Chessington
Mortgagee, which may be increased by up to L500,000), the
principal, capital or nominal amount secured by any such
encumbrance may not be increased beyond the amount currently
secured by the relevant encumbrance as at the date of this
Agreement or, in the case of encumbrances created by Open PSL
Limited, the date of the Second Supplemental Agreement, without
the prior written consent of the Agent;
(b) encumbrances in favour of the Security Trustee;
(c) the Pledge Agreements;
(d) liens or rights of set-off arising solely by operation of law
incurred in the ordinary course of business and not in connection
with the borrowing of money, for sums not more than 30 days
overdue;
(e) encumbrances arising out of title retention provisions in a
supplier's standard conditions of supply in respect of goods
acquired by the relevant person in the ordinary course of
trading;
(f) any other encumbrance created or outstanding with the prior
written consent of the Agent;
(g) agreements and arrangements of the type referred to in clause
16.3.5(d) to the extent that the same constitute security;
(h) any encumbrance over any asset (other than Accounts or Inventory)
acquired by any Obligor after the date of this Agreement and
subject to which such asset is acquired provided that (1) except
with the prior consent of the Agent, the principal, capital or
nominal amount secured by such encumbrance may not be increased
beyond the amount secured thereby at the date of such acquisition
and (2) the same is discharged within 90 days of the date of such
acquisition;
(i) any encumbrance over the assets of any company which becomes a
Subsidiary after the date of this Agreement pursuant to clause
16.3.11 provided that (1) except with the prior written consent
of the Agent, the principal, capital or nominal amount secured by
such encumbrance may not be increased beyond the amount secured
thereby at the date of the acquisition and (2) the same is
discharged within 90 days of the date of such acquisition;
80
provided that, in the case of any encumbrance created or existing
pursuant to sub paragraphs (a) and (f) above, it shall be a
condition to the creation of such encumbrance that Ideal shall,
if so requested by the Agent, procure that the beneficiary of the
relevant encumbrance shall accede to an intercreditor deed or
other priority arrangement on terms acceptable to the Agent;
16.3.2 DISPOSALS: without the prior consent of the Agent, it will not, and
it will ensure that no Group Company will (whether by a single
transaction or a number of related or unrelated transactions and
whether at one time or over a period of time), sell, transfer, assign,
lease out, lend or otherwise dispose of (whether outright, by a sale
and repurchase or sale and leaseback arrangement or otherwise) any
part of its or their assets having an aggregate value in excess
of L750,000 in any one Financial Year except, sales of Inventory
in the ordinary course of trading, sales to Affiliates permitted under
clause 16.3.8 and sales of Equipment permitted under clause 16.4.11
provided that, where any matter relating to any leasing, sub-leasing
or other similar arrangement with respect to the Chessington Property
or the St. Crispin Property requires the consent of the Agent pursuant
to the terms of this clause 16.3.2, such consent shall not be withheld
if the relevant subject matter also requires the consent of the
Chessington Mortgagee or, as the case may be, the St. Crispin
Mortgagee and the relevant Chessington Mortgagee or, as the case may
be, St. Crispin Mortgagee has granted its consent to such matter;
16.3.3 DISTRIBUTIONS AND CHANGES IN CAPITAL STRUCTURE: without the prior
consent of the Agent, it will not, and it will ensure that no Group
Company will:
(a) directly or indirectly declare, make or pay, or incur any
liability to make or pay, any Distribution, or return any capital
to any shareholder by way of capital reduction or otherwise,
provided that:
(i) BMEE may make Distributions or returns of capital to Ideal;
(ii) Ideal and any one or more of the Baby Bells may make
Distributions or returns of capital to BMEBV;
(iii) BMEBV may make Distributions or returns of capital to BMEP;
(iv) BMEP may make Distributions or returns of capital to BMEH;
and
81
(v) BMEH may make Distributions or returns of capital to the
Parent,
all of which payments in aggregate (together with the aggregate
principal amount of all loans made pursuant to clause 16.3.7(a)),
do not exceed L2,000,000 (or the equivalent in any other
currency) in any period of twelve (12) months commencing on the
Closing Date and do not exceed L6,000,000 (or the
equivalent in any other currency) during the term of this
Agreement,
and provided further that the Agent shall have received a certificate
signed by the finance director of Ideal confirming that:
(1) each of the Obligors is in compliance with all of its obligations
under the Finance Documents to which it is a party and no Default
has occurred and is continuing or will result from the payment of
the Distribution or return of capital proposed;
(2) there is Excess Availability under the Revolving Facility of not
less than L5,000,000 as at the date of such certificate and
there will be an average Excess Availability of not less than
L5,000,000 both as at the proposed date of payment of the
relevant Distribution or return of capital and for a continuous
period of six (6) months thereafter; and
(3) in the case of a Distribution to be paid by BMEH to the Parent
only, the largest twenty (20) trade creditors of the Borrowers
(as a whole) are being paid in full when the relevant amounts
become due in accordance with their prevailing credit terms;
OR
(b) make any change in the capital structure of any Group Company
which could have a material adverse effect on any Obligor or the
Group (taken as a whole)
For the avoidance of doubt, no Group Company may make any Distribution
to any member of the Solutions Group;
16.3.4 TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT: it will not, and it
will ensure that no Obligor will, enter into any transaction which has
or might reasonably be expected to have, a material adverse effect on
any Obligor;
82
16.3.5 INDEBTEDNESS: it will not, and it will ensure that no Group Company
will, incur or maintain any indebtedness other than:
(a) indebtedness under the Finance Documents;
(b) trade payables and contractual obligations to suppliers and
customers incurred in the ordinary course of trading;
(c) indebtedness between members of the Group as disclosed to and
permitted by the Agent;
(d) indebtedness under any finance leases disclosed to the Agent
prior to the date of this Agreement or which are fully disclosed
in the Latest Projections and budgets for Capital Expenditure of
the Group as delivered to the Agent pursuant to clauses 15.2.3
and 15.2.4 and as approved by the Agent;
(e) indebtedness due and owing under any foreign exchange or
interest-rate swap, under any option, cap, collar or floor or
under any other hedging agreement or similar arrangement with any
bank or other financial institution and disclosed to the Agent
prior to the date of this Agreement and any replacement thereof
or other hedging arrangement (which is intended to hedge exposure
to interest rate or currency exchange fluctuations and not an
arrangement of a speculative nature) entered into after the date
of this Agreement, in the case of interest rate hedging only,
with the prior consent of the Agent and provided that, if the
relevant Hedge Provider is not the Arranger, any financial
indebtedness due and owing under the relevant hedging arrangement
may not be secured without the consent of the Agent (acting on
the instructions of all of the Lenders); or
(f) indebtedness due and owing by Ideal to the Parent provided that
(a) such indebtedness is unsecured and is incurred on terms no
less favourable to Ideal than would be applicable in a comparable
arm's length transaction with a third party that is not an
Affiliate and (b) the aggregate amount of such indebtedness does
not exceed at any time (i) US$20,000,000 due and owing by Ideal
to the Parent on inter company loan account and (ii)
US$15,000,000 due and owing by Ideal to the Parent on inter
company trading account; or
(g) indebtedness due and owing by Ideal or any of its Affiliates to
the Chessington Mortgagee, provided that the aggregate principal
amount of such indebtedness may not be increased after the date
of this Agreement by an amount, in aggregate, exceeding
L500,000; or
83
(h) indebtedness due and owing by Open PSL Limited to the St. Crispin
Mortgagee, provided that the aggregate principal amount of such
indebtedness may not be increased after the date of the Second
Supplemental Agreement,
and will not, in any event, pay any amount in respect of any financial
indebtedness due to the Chessington Mortgagee or the St Crispin
Mortgagee, save in accordance with the provisions of the Priority
Agreement or, as the context requires, the St. Crispin Priority
Agreement or any subsequent intercreditor deed or priority arrangement
approved by the Agent in accordance with this Agreement;
16.3.6 PREPAYMENT: it will not, and it will ensure that no Group Company
will, voluntarily prepay or redeem any financial indebtedness, save
that each Borrower may make prepayments under this Agreement in
accordance with its terms and save that any Group Company may, in the
ordinary course of business, make early payments to any trade
creditor;
16.3.7 LOANS AND GUARANTEES: it will not, and will ensure that no Group
Company will, make, roll-over or continue to remain outstanding any
loans, grant any credit (save in the ordinary course of trading) or
give any guarantee to or for the benefit of any person (other than any
guarantee permitted pursuant to clause 16.4.13) or otherwise
voluntarily assume any liability, whether actual or contingent, in
respect of any obligation of any other person, save that
(a) BMEH, BMEP, BMEBV, each of the Borrowers and each of the Baby
Bells may make any loans or grant any credit to each other or to
the Parent and to any one or more of the Baby Bells (but, subject
to paragraph (d) and (e) of this clause 16.3.7, not to any member
of the Solutions Group) which, in the case of loans to the Parent
and/or BMEH and/or BMEP and/or BMEBV, in aggregate (and taking
into account the aggregate amount of any Distributions or returns
of capital made by any such persons to the Parent and/or BMEH
and/or BMEP and/or BMEBV in accordance with the terms of clause
16.3.3), do not exceed L2,000,000 (or the equivalent in any
other currency) in any period of twelve (12) months commencing on
the Closing Date and do not exceed L6,000,000 (or the
equivalent in any other currency) during the term of this
Agreement;
(b) a Group Company may make loans to its employees (other than its
directors) provided that the aggregate amount of all such loans
made by all of the Group Companies shall not exceed
L20,000; and
84
(c) a Group Company may roll-over or continue to make available (but
not increase the principal amount thereof, other than through the
capitalisation of accrued interest) any existing loans or
financial accommodation to any other Group Company or, subject to
any other applicable restrictions in this Agreement, to a member
of the Solutions Group (and for the avoidance of doubt the
aggregate amount of loans and accrued interest outstanding to the
Solutions Group as at the date of this Agreement is
EUR8,302,070); and
(d) BMEH may make loans or other financial accommodation to one or
more members of the Solutions Group, provided always that BMEH is
able to provide evidence satisfactory to the Agent (acting
reasonably), whether by way of the provision of Management
Accounts, Financial Statements or otherwise, from which the Agent
is able to determine that such loans or other advances will be
funded wholly out of new funds made available to BMEH after the
Closing Date by loans from the Parent or which have otherwise
been invested in BMEH by the Parent after the Closing Date by way
of the subscription for equity or other capital contribution in
or to BMEH and not funded by any existing funds of BMEH as at the
Closing Date; and
(e) the Borrowers and the IDF Companies may maintain inter company
balances between themselves in an aggregate amount not exceeding
E2,000,000 at any time provided that the same are maintained on
arms' length commercial terms in the ordinary course of business;
16.3.8 TRANSACTIONS WITH AFFILIATES: save to the extent permitted by the
foregoing sub clauses of this clause 16.3, it will not, and will
ensure that no Group Company will:
(a) sell, transfer, distribute or pay any money or assets to any
Affiliate;
(b) lend or advance money or assets to any Affiliate; or
(c) invest in (by capital contribution or otherwise) or purchase or
repurchase any shares or indebtedness or any assets of any
Affiliate,
save that, if no Default has occurred and is continuing, a Group
Company may engage in transactions relating to the sale and purchase
of Inventory (but not, save as otherwise permitted in this Agreement,
involving any sales of Equipment or other fixed assets) with an
Affiliate in the ordinary course of trading in amounts and upon terms
85
fully disclosed to the Agent in the Management Accounts and no less
favourable to that Group Company than would obtain in a comparable
arm's length transaction with a third party which is not an Affiliate,
provided that Accounts generated between the Group Companies and their
Affiliates shall not account for more than three per cent (3%) of the
total number of Accounts generated by the Borrowers and/or any other
Charging Companies;
16.3.9 CHANGE OF BUSINESS OR OPERATIONS: it will ensure that there is no
material change in the nature of its business or operations or the
business or operations of the Group taken as a whole (whether by a
single transaction or a number of related or unrelated transactions,
whether at one time or over a period of time and whether by disposal,
acquisition or otherwise);
16.3.10 ACCOUNTING REFERENCE DATE: it will not, without the prior approval
of the Agent, change, and will procure that no other Group Company
changes, its accounting reference date;
16.3.11 SUBSIDIARIES: save pursuant to any Pre-Approved Acquisition or
otherwise with the Agent's prior written consent, it will not,
directly or indirectly, organise or acquire any Subsidiary (other than
a Dormant Company or those in existence as at the date of this
Agreement and which have been advised to the Agent in writing);
16.3.12 RESTRICTED INVESTMENTS: it will not, and will ensure that no Group
Company will make any Restricted Investment;
16.3.13 CAPITAL EXPENDITURE: it will not, and will ensure that no Group
Company will, without the prior consent of the Agent, make or incur
any Capital Expenditure if, after giving effect thereto, the aggregate
amount of all Capital Expenditure by the Group in any Financial Year
would exceed L1,500,000 (or the equivalent in any other currency);
16.3.14 LEASE OR SIMILAR OBLIGATIONS: save with the prior written consent
of the Agent and save for any finance leases agreed with the Agent
pursuant to clause 16.3.5, it will not, and will ensure that no Group
Company will enter into any lease of real or personal property as
lessee or sublessee or enter into any hire purchase, conditional sale
or other similar arrangement if, after giving effect thereto, the
aggregate amount of Rentals payable by the Group Companies in any
Financial Year in respect of such lease and all other such leases,
hire purchase, conditional sale or similar arrangements would exceed
L500,000. The term "RENTALS" means all payments due from the lessee or
sublessee under a lease or all payments, liabilities or obligations
due from the hirer or other relevant obligor or debtor (howsoever
described) under any hire purchase, conditional sale or similar
arrangement, including,
86
without limitation, rent, service charge, utility or maintenance costs
and insurance premiums together with any VAT thereon;
16.3.15 CAPITAL MARKETS: if any Borrower, BMEP, BMEH or BMEBV or any other
Group Company shall enter into any Capital Markets Transaction then,
subject to the following provisions of this clause 16.3.15, it shall
apply or BMEH shall procure that there is applied, thirty per cent
(30%) of the net proceeds of such Capital Markets Transaction to
prepay (subject to payment of any broken funding costs) a commensurate
amount of the then Total Outstandings, provided that, if the average
Excess Availability during the period of six (6) months ending on the
date upon which the Capital Markets Transaction is completed was in
excess of L5,000,000, then the relevant issuer(s) shall not be obliged
to apply such proceeds in prepayment in the manner prescribed by this
clause 16.3.15; and
16.3.16 VENDOR FINANCING: it will not and will procure that no other Group
Company will enter into any vendor financing programme or similar
arrangement for financing the acquisition of Equipment, any other
fixed asset or Inventory (which has not already been disclosed in its
budget for Capital Expenditure and approved by the Agent), without the
prior written consent of the Agent and without the Agent being
provided with such information as it may require as to the terms and
conditions of such vendor financing programme or other arrangement and
assessing the impact, if any, upon the Collateral and/or the
encumbrances created by the Debenture.
16.4 COVENANTS RELATING TO THE COLLATERAL
Ideal undertakes that:
16.4.1 COLLATERAL REPORTING: it will provide the Agent, in each case in
respect of each Trading Company, and on a consolidated and
consolidating basis, with the following documents at the following
times in form satisfactory to the Agent:
(a) on a weekly basis on each Wednesday based on figures as of the
previous Friday, a Borrowing Base Certificate incorporating,
inter alia, a schedule of credit notes, a summary of collections
of accounts receivable, a schedule of Accounts created since the
last such schedule, with effect from any Inventory Eligibility
Date, a report of the Inventory balance (by location) based on
the perpetual inventory reports and such further details as the
Agent may request;
(b) upon request, copies of invoices, credit notes, shipping and
delivery documents;
87
(c) monthly ageings of accounts receivable to be delivered no later
than the 10th day of each month in respect of the immediately
preceding month;
(d) monthly perpetual inventory reports by category to be delivered
no later than the 10th day of each month in respect of the
immediately preceding month;
(e) on a monthly basis, a report listing the top ten (10) customers
of Ideal during that month, providing (i) details of the level of
sales made to each such customer; (ii) details of any credit
notes issued to each such customer or any other account
adjustments made in respect of such customer; and (iii) the
amount of cash actually received from each such customer during
the relevant month;
(f) with effect from any Inventory Eligibility Date, upon request,
monthly perpetual inventory reports with effect from any
Inventory Eligibility Date, a quarterly report of all Inventory
based on a physical stock count;
(g) monthly ageings of accounts payable no later than the 10th day of
the following month, together with a specific breakdown (in
reasonable detail) of the monthly ageings of accounts payable to
the largest ten supplier creditors of Ideal and details of the
Inventory held by Ideal in respect of such accounts payable and
each such supplier;
(h) with effect from any Inventory Eligibility Date, upon request,
copies of purchase orders, invoices, and delivery documents for
Inventory and Equipment acquired by that Trading Company;
(i) such other reports as to the Collateral and the Accounts (and
each Borrower hereby authorises the Agent to make enquiries of
its customers in this respect) as the Agent shall request from
time to time; and
(j) certificates of an officer of Ideal certifying as to the
foregoing;
16.4.2 INSPECTION: upon receiving not more than two business days' notice
from the Agent (or without notice following a Default which is
continuing), it will, and will procure that each Trading Company will,
permit the Agent or any person authorised by the Agent to have access
to its premises to carry out a periodic inspection of the Collateral,
the regularity of such periodic inspections to be at the Agent's
discretion, but initially to be no more often than every 60 days;
88
16.4.3 ACCOUNTS: it will not, and will ensure that no Trading Company will,
re-date any invoice or sale or make sales on extended credit beyond 45
days from its standard credit terms or modify any Account except with
the prior written consent of the Agent. If Ideal or any other Obligor
becomes aware of any material matter affecting any material Account
(including information regarding any Account Debtor's creditworthiness
and any information in respect of an Account Debtor against whom a
Trading Company has commenced, or is proposing to commence, legal
proceedings), it will promptly so advise the Agent;
16.4.4 ACCEPTANCE OF NOTES OR OTHER INSTRUMENTS: it will not, and will
ensure that no Trading Company will, accept any note or other
instrument (except a cheque or other instrument for the immediate
payment of money) with respect to any Account without the Agent's
written consent. If the Agent consents to the acceptance of any such
note or other instrument, it shall be considered as evidence of the
Account and not payment thereof, and Ideal will promptly deliver such
note or instrument to the Agent appropriately endorsed. Regardless of
the form of presentment, demand, notice of dishonour, protest and
notice of protest with respect thereto, Ideal will remain liable
thereon until such note or instrument is paid in full;
16.4.5 DISPUTES WITH ACCOUNT DEBTORS: it will notify the Agent promptly of
all disputes and claims with Account Debtors in excess of L50,000
and settle or adjust them, or ensure that the relevant Trading Company
settles or adjusts them, at no expense to the Lenders, but no
discount, credit or allowance shall be granted to any Account Debtor
without the Agent's consent, except for discounts, credits and
allowances made or given in the ordinary course of trading when no
Event of Default exists hereunder. Ideal shall send, or procure that
there is sent to, the Agent a copy of each credit note in excess
of L1,000,000 as soon as issued and a list of all credit notes in
excess of L750,000 on a weekly basis, with copies of any such
credit notes to be supplied to the Agent at the Agent's request;
16.4.6 RETURNS OF INVENTORY: if after the Inventory Eligibility Date, an
Account Debtor returns any Inventory to any Borrower or any Trading
Company when no Event of Default exists, then that Borrower shall
promptly determine the reason for such return and shall issue, or
procure that the relevant Trading Company shall issue, a credit note
to the Account Debtor in the appropriate amount. Each Borrower shall
immediately report to the Agent any return involving an amount in
excess of L1,000,000. Each such report shall indicate the reasons
for the returns and the locations and condition of the returned
Inventory. Whenever any Inventory is returned, the related Account
shall be deemed ineligible, and the Available Revolving Facility
Amount shall be adjusted accordingly;
89
16.4.7 INVENTORY: after the Inventory Eligibility Date, it will not, and
will ensure that no Trading Company will, without prior written notice
to the Agent, acquire or accept any Inventory on consignment or
approval;
16.4.8 INVENTORY - REPORTING SYSTEM: after the Inventory Eligibility Date,
it will maintain, and will ensure that each Trading Company maintains,
a perpetual inventory reporting system at all times; it will conduct a
physical count of the Inventory of all the Trading Companies at least
once per Financial Year and after the occurrence of an Event of
Default at such other times as the Agent requests, and shall promptly,
upon completion, supply the Agent with a copy of such count
accompanied by a report of the value of such Inventory (valued at the
lower of cost, on a FIFO basis, or market value); no Borrower will,
and will ensure that no Trading Company will, without the Agent's
prior written consent, sell any Inventory on a sale or return, sale on
approval, consignment or other repurchase or return basis;
16.4.9 CONDITION OF THE EQUIPMENT: it will keep and maintain, and will
ensure that each Trading Company keeps and maintains, its Equipment in
good operating condition and repair (ordinary wear and tear excepted)
and will make all necessary replacements;
16.4.10 ADDITIONS TO THE EQUIPMENT: it will include information regarding
any material additions to or deletions from any Equipment (which, in
the case of any additions, are to be within the agreed Capital
Expenditure budget) within the Management Accounts required to be
delivered pursuant to clause 15.2.2;
16.4.11 DISPOSAL OF THE EQUIPMENT: it will not, and will ensure that no
Trading Company will, without the Agent's prior written consent, sell,
lease as a lessor, or otherwise dispose of any Equipment provided that
obsolete or unusable Equipment having an orderly liquidation value no
greater than L500,000 individually and L1,500,000 in the
aggregate in any Financial Year, may be disposed of without the
Agent's consent, subject to the conditions set forth below. If any of
the Equipment is sold, transferred or otherwise disposed of with the
Agent's prior written consent or as otherwise permitted hereby then:
(a) if such sale, transfer or disposal is effected without
replacement of such Equipment, or such Equipment is replaced by
leased Equipment, or by Equipment purchased subject to a
Permitted Encumbrance, Ideal will, or will procure that the
relevant Trading Company will, deliver all of the cash proceeds
of any such sale, transfer or disposal to the Agent, which
proceeds shall be applied in or towards prepayment of all sums
due from the Borrowers hereunder; or
90
(b) if such sale, transfer or disposal is made in connection with the
purchase of replacement Equipment (other than subject to a
Permitted Encumbrance), Ideal will use the proceeds of such sale,
transfer or disposal to finance the purchase of such replacement
Equipment which shall be free and clear of all liens, claims and
encumbrances, except for the Security Interest and other
Permitted Encumbrances and shall deliver to the Agent written
evidence of the use of the proceeds for such purchase;
16.4.12 CHESSINGTON MORTGAGE: it will procure that Bell Microproducts
Limited does not agree to or complete any refinancing of the
indebtedness relating to the Chessington Property unless:
(a) the Agent shall be afforded a reasonable opportunity (subject to
any applicable confidentiality constraints) to review the terms
and conditions of such refinancing; and
(b) Ideal shall procure (or shall procure that Bell Microproducts
Limited shall procure) that the relevant Chessington Mortgagee
shall enter into an intercreditor deed or priority arrangement
mutually acceptable to the relevant Chessington Mortgagee, Bell
Microproducts Limited and the Agent;
16.4.13 CHESSINGTON PROPERTY GUARANTEE: it will not give and will procure
that no other Group Company shall provide any guarantee, indemnity or
other assurance in respect of the obligations of Ideal or any relevant
Affiliate to the Chessington Mortgagee (other than any guarantees in
existence as at the date hereof) unless the obligations of each
relevant Group Company and the rights and recourse of the Chessington
Mortgagee are fully subordinated to the rights of the Beneficiaries
under the Finance Documents.
16.4.14 ST. CRISPIN MORTGAGE: it will procure that Open PSL Limited does
not agree to or complete any refinancing of the indebtedness relating
to the St. Crispin Property unless:
(a) the Agent shall be afforded a reasonable opportunity (subject to
any applicable confidentiality constraints) to review the terms
and conditions of such refinancing; and
(b) Ideal shall procure (or shall procure that Open PSL Limited shall
procure) that the relevant St. Crispin Mortgagee shall enter into
an intercreditor deed or priority arrangement mutually acceptable
to the relevant St. Crispin Mortgagee, Open PSL Limited and the
Agent;
91
16.4.15 ST. CRISPIN PROPERTY GUARANTEE: it will not give and will procure
that no other Group Company shall provide any guarantee, indemnity or
other assurance in respect of the obligations of Open PSL Limited or
any relevant Affiliate to the St. Crispin Mortgagee unless the
obligations of each relevant Group Company and the rights and recourse
of the St. Crispin Mortgagee are fully subordinated to the rights of
the Beneficiaries under the Finance Documents.
17 DEFAULT
17.1 EVENTS OF DEFAULT
Each of the events set out below is an Event of Default:
17.1.1 NON-PAYMENT: any Obligor or any IDF Company does not pay any sum due
from it under any Finance Document at the time and in the manner
specified in the relevant Finance Document, or where the non-payment
results solely from technical difficulties relating to the transfer of
that amount from the relevant Obligor or IDF Company to the Agent or,
as the case may be, the Receivables Purchaser, within five (5) days of
the due date;
17.1.2 BREACH OF REPRESENTATION OR WARRANTY: any representation or warranty
made or deemed to be repeated by any Obligor or any IDF Company in any
Finance Document or in any document delivered pursuant to it is not
complied with or is or proves to have been incorrect or misleading in
any material respect when made or deemed to be repeated;
17.1.3 BREACH OF UNDERTAKING: any Borrower fails duly to perform or comply
with any obligation expressed to be assumed by it in clause 2.2, 15,
16.2.8 to 16.2.9 inclusive, 16.3 or 16.4 or any Obligor or any IDF
Company fails duly to perform any obligation in, or comply with any of
the terms of, any of the Security Documents;
17.1.4 BREACH OF OTHER OBLIGATION: any Obligor or any IDF Company fails
duly to perform or comply with any other obligation expressed to be
assumed by it in any of the Finance Documents and such failure (if
capable of remedy) is not remedied within ten business days after the
earlier of (i) the date upon which any such Obligor or, as the case
may be, IDF Company becomes aware of such default or (ii) the date
upon which the Agent or, as the case may be, Receivables Purchaser has
notified such Obligor or, as the case may be, IDF Company of such
default or if any such Finance Document shall terminate (other than in
accordance with its terms or with the written consent of the Agent) or
become void or unenforceable;
92
17.1.5 CROSS-DEFAULT: any indebtedness (other than indebtedness to any one
or more trade creditors arising in the ordinary course of business
which is not overdue by more than 60 days and in respect of which the
relevant trade creditor has not sought repayment or otherwise taken
steps to procure or enforce repayment or in respect of which repayment
has been sought and the relevant Obligor or, as the case may be, IDF
Company is contesting in good faith by appropriate means its liability
to make payment thereof) of any Obligor or any IDF Company of an
amount in excess of L1,000,000 (or its equivalent in any other
currency) is not paid when due or is declared to be or otherwise
becomes due and payable prior to its specified maturity or any
creditor of any Obligor or any IDF Company becomes entitled to declare
any such indebtedness due and payable prior to its specified maturity;
17.1.6 INSOLVENCY: any Obligor or Group Company is unable to pay its debts
as they fall due (or is deemed by law or by a court to be unable to
pay its debts), stops, suspends or threatens to stop or suspend
payment of all or any part of its indebtedness or commences
negotiations with any one or more of its creditors with a view to the
general readjustment or re-scheduling of all or any part of its
indebtedness or makes a general assignment for the benefit of, or
composition with, its creditors or a moratorium is agreed or declared
in respect of, or affecting, all or any part of its indebtedness;
17.1.7 ENFORCEMENT PROCEEDINGS: a distress, attachment, execution,
diligence or other legal process is levied, enforced or sued out on or
against all or any part of the assets of any Obligor or Group Company
and is not discharged within five business days;
17.1.8 WINDING-UP: any Obligor or Group Company takes any corporate action
or other steps are taken or legal or other proceedings are started for
its winding-up, dissolution or re-organisation other than for the
purposes of a bona fide, solvent scheme of reconstruction or
amalgamation previously approved in writing by the Agent (other than a
petition for winding up which a Borrower has satisfied the Agent is
vexatious, groundless or an abuse of process and in relation to which
the relevant Group Company has taken steps within seven days of the
petition to restrain the petitioner from advertising the petition and
which in any event has been discharged within thirty days of the
petition) or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or
all of its assets;
17.1.9 ANALOGOUS PROCEEDINGS: anything analogous to or having a
substantially similar effect to any of the events specified in clauses
17.1.6 to 17.1.8 inclusive shall occur under the laws of any
applicable jurisdiction;
93
17.1.10 ENCUMBRANCE ENFORCEABLE: any encumbrance on or over the assets of
any Obligor or Group Company securing indebtedness in excess of
L500,000 becomes enforceable and any step (including the taking
of possession or the appointment of a receiver, manager or similar
person) is taken to enforce that encumbrance;
17.1.11 EXPROPRIATION: all or any material part of the shares or assets of
any Obligor is seized, compulsorily acquired, nationalised or
otherwise expropriated or custody or control of the same is assumed by
any public authority or any court of competent jurisdiction at the
instance of any public authority, except where contested in good faith
by proper proceedings diligently pursued where a stay of enforcement
is in effect;
17.1.12 TERMINATION OF ANY GUARANTEE: any guarantee of any amounts due and
payable under any of the Finance Documents shall be terminated,
revoked or declared void or invalid;
17.1.13 JUDGMENTS: one or more final judgments for the payment of money
aggregating in excess of L50,000 (whether or not covered by
insurance) shall be rendered against any Obligor and such Obligor
shall fail to discharge the same within thirty (30) days from the date
of entry thereof or to appeal therefrom;
17.1.14 LOSS OF COLLATERAL: any loss, theft, damage or destruction of any
item or items of the Collateral occurs which in the opinion of the
Agent (i) could materially and adversely affect the operation of any
Borrower's or any Obligor's business or the business of the Group
(taken as a whole) or (ii) is material in amount and is not adequately
covered by insurance;
17.1.15 CESSATION OF BUSINESS: any Obligor ceases to carry on the business
it carries on today or enters into any unrelated business;
17.1.16 ILLEGALITY: it is or will become unlawful for any Obligor to
perform or comply with any of its obligations under any Relevant
Agreement, or any such obligation is not or ceases to be legal, valid
and binding;
17.1.17 REPUDIATION: any Obligor repudiates, or does or causes to be done
anything evidencing an intention to repudiate any Relevant Agreement;
17.1.18 MATERIAL ADVERSE CHANGE: there occurs any material adverse change
in any Obligor's assets, business, operations or condition (financial
or otherwise);
17.1.19 CHANGE OF CONTROL: any person or group of connected persons which
does not have control at the date of this Agreement acquires control
of
94
BMEH, BMEP, BMEBV or any Obligor and for this purpose "CONNECTED
PERSON" shall be construed in accordance with section 839 Income and
Corporation Taxes Act 1988;
17.1.20 INVOICE DISCOUNTING AGREEMENTS: any Event of Default as defined in
and referred to in the Accounts Transfer Conditions (other than an
Event of Default set out in Condition 17.1(i) (Encumbrance
Enforceable) or Condition 17.1(l) (Judgments) of the Accounts Transfer
Conditions) shall occur.
17.2 ACCELERATION
If at any time and for any reason (and whether within or beyond the control
of any party to any of the Finance Documents) any Event of Default has
occurred, then at any time thereafter, whilst such Event of Default is
continuing, the Agent may, and shall, if so instructed by the Majority
Lenders, by written notice to Ideal do one or more of the following at any
time or times and in any order:
17.2.1 reduce or cancel the Available Facility or any one or more of its
elements or reduce or cancel the Available Revolving Facility Amount;
17.2.2 restrict the amount of or refuse to make available any Revolving
Loan or Swingline Loan or to issue any Letter of Credit or Guarantee;
17.2.3 terminate this Agreement and the Revolving Facility made or to be
made available hereunder;
17.2.4 declare any Revolving Loan or any Swingline Loan, all unpaid accrued
interest or fees and any other sum then payable under this Agreement
to be due and payable on demand or on such date as it may specify in
such notice whereupon all such monies shall become so due and payable
on demand or on such date (as the case may be);
17.2.5 require that the Borrower deposit with the Security Trustee with
respect to any Letter of Credit or Guarantee then outstanding a
Supporting Letter of Credit or cash, in the same manner as
contemplated in clause 6.14;
17.2.6 declare the Revolving Facility to be cancelled, whereupon it shall
be so cancelled and the Commitment of each Lender shall immediately be
reduced to zero;
17.2.7 enforce any or all of its rights or require that the Security
Trustee enforce any or all of its rights under any of the Finance
Documents or under applicable law.
95
17.3 ON DEMAND FACILITY
If, pursuant to clause 17.2.4, the Agent declares any of the Loans (or any
other monies which may become payable hereunder) to be due and payable on
demand of the Agent, then, at any time thereafter, the Agent may by written
notice to Ideal call for repayment of any such Loans (and any other such
monies) on such date as it may specify in such notice (whereupon the same
shall become due and payable on such date together with all unpaid accrued
interest, fees and any other sums then owed by the Borrowers hereunder) or
withdraw its declaration with effect from such date as it may specify in
such notice.
17.4 LETTER OF CREDIT AND GUARANTEE FEE FOLLOWING EVENT OF DEFAULT
From the date of the occurrence of any Event of Default until such Event of
Default is remedied to the satisfaction of the Agent, or until all sums
payable hereunder have been satisfied or discharged in full and none of the
Lenders is under any contingent liability hereunder or under any Letter of
Credit or Guarantee, the Letter of Credit and Guarantee Fee shall be
calculated at the rate per annum equal to an additional 2% per annum to
that referred to in clause 22.5 on the maximum face value of any Letter of
Credit or maximum contingent liability of the Issuer under each Guarantee
then outstanding.
17.5 TERMINATION FEE
If the Agent terminates this Agreement upon an Event of Default, Ideal
shall pay the Agent for the account of the Lenders in their Participating
Proportion, immediately upon termination, a fee equal to the early
termination fee that would have been payable under clause 29 if this
Agreement had been terminated on that date pursuant to Ideal's election.
18 DEFAULT INTEREST
18.1 INTEREST ON UNPAID SUMS
If any relevant Obligor does not pay any sum payable by it under this
Agreement on its due date in accordance with the provisions of clause 20 or
if any sum due and payable by any relevant Obligor under any judgment of
any court in connection with this Agreement is not paid on the date of such
judgment, it shall pay interest on the balance for the time being
outstanding (such balance being referred to in this Agreement as the
"UNPAID SUM") for the period beginning on such due date or, as the case may
be, the date of such judgment, in accordance with the provisions of this
clause 18.
18.2 DEFAULT INTEREST PERIODS
Interest under this clause 18 shall be calculated by reference to
successive periods, each of which (other than the first, which shall begin
on the due date for payment or, as the case may be, the date of judgment as
referred to in clause 18.1)
96
shall begin on the last day of the preceding period. Each such period shall
be of such duration as the Agent may select.
18.3 DEFAULT INTEREST RATES
The rate of interest applicable to an unpaid sum from time to time during
each period relating to that unpaid sum shall be the rate per annum which
is the sum of (i) two per cent (2%) (ii) the Applicable Margin (iii) LIBOR
relative to such period (or, in respect of any Swingline Loans or Reference
Rate Revolving Loans, the Reference Rate) and (iv) the Mandatory Cost, if
any, applicable to that unpaid sum provided that:
18.3.1 if, at or about 11.00 a.m. on the Quotation Date in respect of such
unpaid sum, it is not possible to determine LIBOR in accordance with
the definition of LIBOR there shall be substituted for LIBOR the rate
determined by the Agent (and notified to Ideal) to be the weighted
average of the rates (as notified to the Agent by the Lenders prior to
the first day of the relevant Interest Period) which represent the
cost to each Lender of funding its portion of such unpaid sum during
such period from whatever sources and in whatever manner it may
select; and
18.3.2 if the unpaid sum is of the principal amount of a LIBOR Revolving
Loan which became due and payable other than on the last day of any
Interest Period relating to it, the first default period applicable to
that unpaid sum shall be of a duration equal to the unexpired portion
of that Interest Period and the rate of interest applicable to it
during that Interest Period shall be the rate per annum equal to the
sum of two per cent (2%) and the rate applicable to it immediately
before it became due.
18.4 PAYMENT AND COMPOUNDING OF DEFAULT INTEREST
Any interest accrued due under clause 18.3 in respect of an unpaid sum
shall be due and payable and shall be paid by the relevant Obligor at the
end of the period by reference to which it is calculated or on such other
date as the Agent may specify by written notice to Ideal. If not paid on
the due date, the interest shall be added to and form part of the unpaid
sum on which interest shall accrue and be payable in accordance with the
provisions of this clause 18.
19 INDEMNITIES AND CURRENCY OF ACCOUNT
19.1 GENERAL INDEMNITIES
Ideal shall (or will procure that an Obligor will) indemnify on demand each
of the Beneficiaries against any funding or other cost, loss (including any
foreign exchange contract loss incurred by any of them), expense or
liability which it may sustain or incur, directly or indirectly, as a
result of:
97
19.1.1 a Loan not being made by reason of any of the conditions set out in
Schedule 2 not being satisfied or any Borrower cancelling or
purporting to cancel a Utilisation Notice; or
19.1.2 the occurrence of any Default; or
19.1.3 the receipt or recovery by it (or the Agent on its behalf) of all or
any part of its share of any Loan or unpaid sum other than on the last
day of any Interest Period relating to that Loan or unpaid sum.
19.2 BREAK COSTS
Ideal's liability under clause 19.1.3 shall include the amount (if any) by
which (i) the additional interest which would have been payable under this
Agreement on the amount so received or recovered had it been received or
recovered by the relevant party on the last day of the relevant Interest
Period exceeds (ii) the amount of interest which, in the opinion of the
Beneficiary concerned, would have been payable to such Beneficiary on the
last day of that Interest Period in respect of a deposit denominated in the
currency of the Loan or unpaid sum in question equal to the amount so
received or recovered placed by it with a prime bank in London for a period
starting on the second business day following the date of such receipt or
recovery and ending on the last day of that Interest Period. For the
avoidance of doubt (but without prejudice to their obligations to pay break
costs), neither Ideal nor any other relevant Obligor shall be liable to
compensate any Beneficiary for any loss of Applicable Margin if any amount
is repaid, prepaid or cancelled by virtue of the operation of clauses 9.3
or 12.1.2.
19.3 CURRENCY INDEMNITY
Any amount received or recovered by any Beneficiary in respect of any sum
expressed to be due to it from any Obligor under any Finance Document in a
currency other than the currency (the "CONTRACTUAL CURRENCY") in which such
sum is so expressed to be due (whether as a result of, or of the
enforcement of, any judgment or order of a court or tribunal of any
jurisdiction, the winding-up of such Obligor or otherwise) shall only
constitute a discharge to such Obligor to the extent of the amount of the
contractual currency that the recipient is able, in accordance with its
usual practice, to purchase with the amount of the currency so received or
recovered on the date of receipt or recovery (or, if later, the first date
on which such purchase is practicable). If the amount of the contractual
currency so purchased is less than the amount of the contractual currency
so expressed to be due, such Obligor shall indemnify the recipient against
any loss sustained by it as a result, including the cost of making any such
purchase.
19.4 INDEMNITY TO THE AGENT
Ideal shall (or shall procure that an Obligor shall) promptly indemnify the
Agent against any cost, loss or liability incurred by the Agent (other than
any loss
98
occasioned by the gross negligence or wilful misconduct of the Agent) as a
result of:
19.4.1 investigating any event which it reasonably believes is a Default;
or
19.4.2 entering into or performing any foreign exchange contract for the
purposes of any Loan being made in a Foreign Currency; or
19.4.3 acting or relying on any notice, request or instruction which it
believes to be genuine, correct and appropriately authorised.
19.5 NATURE OF INDEMNITIES
Each of the indemnities in this clause 19 constitutes a separate and
independent obligation from the other obligations in this Agreement, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any time or indulgence granted by the Agent or any Lender
and shall continue in full force and effect notwithstanding any order,
judgment, claim or proof for a liquidated amount in respect of any sum due
under this Agreement or any other judgment or order.
20 PAYMENTS
20.1 CURRENCY OF ACCOUNT AND PAYMENT
Sterling is the currency of account and payment for all sums at any time
due from the Borrower under or in connection with any of the Finance
Documents (including damages) provided that (i) each repayment of a Loan or
a part thereof shall be made in the currency in which such Loan is
denominated at the time of that repayment; (ii) each payment of interest
shall be made in the currency in which the sum in respect of which such
interest is payable is denominated; (iii) each payment in respect of costs
and expenses shall be made in the currency in which the same were incurred;
and (iv) any amount expected to be payable in a currency other than
sterling shall be paid in that other currency.
20.2 PAYMENTS BY THE BORROWER AND THE LENDERS
On each date on which this Agreement requires an amount to be paid by any
Obligor or any of the Lenders to the Agent, that Obligor or, as the case
may be, such Lender shall make the same available to the Agent:
20.2.1 where such amount is denominated in sterling, by payment in sterling
and in same day funds (or in such other funds as may for the time
being be customary in London for the settlement in London of banking
transactions in sterling) to the Agent at Bank of America, NA, 5
Canada Square, London, E14 5AQ, sort code 16-50-50, Attn: Loans
Service (or as the Agent may otherwise specify for this purpose); or
99
20.2.2 where such amount is denominated in a Foreign Currency (other than
euro), by payment in such Foreign Currency and in immediately
available, freely transferable, cleared funds to such account with
such bank in the principal financial centre of the country of such
Foreign Currency as the Agent may specify for this purpose; or
20.2.3 where such amount is denominated in euro, such sum shall be made
available to the Agent by payment in euro and in immediately
available, freely transferable, cleared funds to such account with
such bank in such principal financial centre in such participating
member state of the European Union or in London as the Agent shall
from time to time nominate for this purpose.
20.3 PAYMENTS BY THE AGENT
Save as otherwise provided herein, each payment received by the Agent for
the account of another person pursuant to clause 20.2 shall be made
available by the Agent (subject, without any liability therefor, for delays
outside the Agent's control in crediting cleared funds) to such other
person (in the case of a Lender, for the account of its Facility Office)
for value the same day (provided that such payment has been received by the
Agent by no later than 12.00 noon) by transfer to such account of such
person with such bank in the principal financial centre of the country of
the currency of such payment as such person shall have previously notified
to the Agent or (in the case of a Borrower) in the agreed currency
denomination to the account of that Borrower specified in the Utilisation
Notice.
20.4 PAYMENTS DUE ON NON-BUSINESS DAYS
If any payment of principal, interest, premium or other sum to be made
hereunder becomes due and payable on a day other than a business day, the
due date of payment shall be extended to the next succeeding business day
and interest thereon shall be payable at the applicable interest rate
during such extension (unless that next succeeding business day falls in
the following calendar month in which case the due date of payment shall be
the immediately preceding business day).
20.5 IMPRACTICABLE TO MAKE PAYMENTS
If, at any time, it shall become impracticable (by reason of any action of
any governmental authority or any change in law, exchange control
regulations or any similar event) for any Obligor to make any payments
hereunder in the manner specified in clause 20.2, then that Obligor may
agree with each or any of the Lenders to make alternative arrangements for
the payment direct to such Lender of amounts due to such Lender hereunder
provided that, in the absence of any such agreement with any Lender, that
Obligor shall be obliged to make all payments due to such Lender in the
manner specified in this Agreement. Upon reaching such agreement the
relevant Obligor and such Lender shall immediately
100
notify the Agent and shall thereafter promptly notify the Agent of all
payments made direct to such Lender.
20.6 NO SET-OFF OR COUNTERCLAIM
All payments made by an Obligor under this Agreement shall be made free and
clear of and without any deduction for or on account of any set-off or
counterclaim.
20.7 REFUNDING OF PAYMENTS
Where a sum is to be paid to the Agent under this Agreement for account of
another person, the Agent shall not be obliged to (but may) make the same
available to that other person until it has been able to establish to its
satisfaction that it has actually received that sum. If and to the extent
that it does so but it proves to be the case that it had not actually
received the sum which it paid out, then, the person to whom the Agent made
that sum available shall on request refund it to the Agent and that person
or (at the option of the Agent) the person by whom that sum should have
been made available shall on request pay to the Agent the amount (as
certified by the Agent) which will indemnify the Agent against any funding
or other cost, loss, expense or liability which it may have sustained or
incurred as a result of paying out that sum before receiving it.
20.8 DEBIT TO LOAN ACCOUNT
The Agent is hereby authorised to debit all Swingline Loans and all
Reference Rate Revolving Loans and interest thereon to a loan account or
accounts denominated in the currency denomination of each such Loan
maintained with the Agent. All fees, commissions, costs, expenses and other
charges under or pursuant to the Finance Documents and all payments made
and out-of-pocket expenses incurred by the Agent and/or the Lenders
pursuant to the Finance Documents will be debited to such loan account(s)
as of the date due from the relevant Borrower or the date paid or incurred
by the Agent and/or the Lenders, as the case may be.
20.9 CHANGE OF CURRENCY TO EURO
With effect from the date (if any) upon which sterling is converted into
euro in accordance with EMU legislation:
20.9.1 REDENOMINATION: each obligation under this Agreement of any party to
this Agreement which, up to such time, had been denominated in
sterling shall be redenominated into euro in accordance with EMU
legislation provided that, if and to the extent that any EMU
legislation provides that an amount denominated either in euro or in
sterling as a national currency unit of the euro can be paid by the
debtor either in euro or in that national currency unit, each party to
this Agreement
101
shall be entitled to pay or repay any such amount either in euro or in
sterling as such national currency unit;
20.9.2 ROUNDING: without prejudice and in addition to any method of
conversion or rounding prescribed by any EMU legislation and without
prejudice to the respective liabilities for indebtedness of any
Obligor to the Beneficiaries and the Beneficiaries to any Obligor
under or pursuant to this Agreement each reference in this Agreement
to a minimum amount (or an integral multiple thereof) in sterling to
be paid to or by the Agent and/or the Lenders shall be replaced by a
reference to such reasonably comparable and convenient amount (or an
integral multiple thereof) in euro as the Agent (after consultation
with Ideal but without prejudice to its rights under this clause
20.9.2) may from time to time specify; and
20.9.3 CONSEQUENTIAL CHANGES: each provision of this Agreement shall be
subject to such reasonable changes of construction as the Agent may
(after consultation with Ideal but without prejudice to its rights
under this clause 20.9.3)from time to time specify to be necessary or
appropriate to reflect the changeover of sterling to euro.
20.10 ORDER OF DISTRIBUTION TO LENDERS
If the amount received by the Agent from an Obligor (or, as the case may
be, from the Security Trustee pursuant to the exercise by the Security
Trustee of any rights or powers it may have pursuant to the Security
Documents) on any date is less than the total sum due under this Agreement
on that date, the Agent shall apply that amount in or towards payment of
the following sums in the following order:
20.10.1 first, in or towards payment of any sum then due to the Agent in
its capacity as such;
20.10.2 secondly, in or towards payment of any sum then due to the Arranger
in its capacity as such;
20.10.3 thirdly, in or towards payment pro rata of any sums (other than
principal of or interest on the Loans) then due to the Lenders (or any
of them);
20.10.4 fourthly, in or towards payment pro rata of any interest then due;
20.10.5 fifthly, in or towards payment pro rata of any principal then due,
and any such applications shall be made notwithstanding any purported
appropriation to the contrary by any person.
102
21 SET-OFF
Each Obligor authorises any other party to this Agreement at any time after
an Event of Default has occurred and is continuing and without prior notice
to that Obligor to apply any credit balance (whether or not then due) to
which that Obligor is at any time beneficially entitled on any account at
any office of that party in or towards satisfaction of any sum then due
from it to that party under this Agreement and unpaid and for this purpose
to purchase with the monies standing to the credit of any such account such
other currencies as may be necessary to effect such application (but so
that nothing in this clause 21 shall be effective to create a charge). No
party shall be obliged to exercise any of its rights under this clause
which shall be without prejudice to and in addition to any right of
set-off, combination of accounts, lien or other right to which it is at any
time otherwise entitled (whether by operation of law, contract or
otherwise).
22 FEES
22.1 UNUSED LINE FEE
For every month during the term of this Agreement, Ideal shall (or shall
procure that another Obligor shall) pay the Agent for the account of the
Lenders a fee (the "UNUSED LINE FEE") in an amount equal to 0.25% per
annum, multiplied by the average daily amount by which the Total
Commitments exceed the sum of the sterling equivalent of (i) the average
daily outstanding amount of the Revolving Loans and Swingline Loans during
such month (with the outstanding amount of Revolving Loans and Swingline
Loans calculated for this purpose by applying payments immediately upon
receipt), (ii) the maximum contingent liability of the Issuer under each
Letter of Credit and Guarantee or, if any demand is made under any Letter
of Credit or Guarantee, the average daily amount outstanding under any
account to which any such payment made thereunder is debited and (iii) the
Invoice Discounting Facility Exposure. Such fee shall be calculated on the
basis of a year of three hundred sixty five (365) days and actual days
elapsed, and shall be payable to the Agent on the first day of each month
following the Closing Date and on the termination of this Agreement, in
each case with respect to the prior month or portion thereof.
22.2 ARRANGEMENT FEE
Ideal shall pay to the Arranger for its own account an arrangement fee in
the amount and at the times agreed in a letter dated on or around the
Effective Date from the Arranger to Ideal.
22.3 COLLATERAL MANAGEMENT FEE
Ideal will pay the Agent for its own account a fee of an amount set out in
a letter dated on or about the date of the Third Supplemental Agreement
addressed by the Agent to Ideal (the "COLLATERAL MANAGEMENT FEE"). The
total amount of such fee shall be deemed to have accrued due and become
payable in full on the
103
Effective Date (as defined in the Third Supplemental Agreement) but the
Agent agrees, subject to clause 29.3 (Effect of Termination), that such fee
shall be paid in equal instalments on the Effective Date (as defined in the
Third Supplemental Agreement) and on the first day of each calendar month
thereafter prior to the termination of this Agreement.
22.4 AUDIT FEE
Ideal shall pay to the Agent for its own account an audit fee of L500 per
day per field examiner charge (the "AUDIT FEE") in respect of the periodic
inspection of the Collateral required by the Agent in accordance with this
Agreement and shall also pay on demand all out of pocket expenses incurred
by the Agent in connection with any such inspection.
22.5 LETTER OF CREDIT AND GUARANTEE FEE
Ideal agrees to pay (or procure that the relevant Borrower shall pay) to
the Agent for account of the Issuer a fee (the "LETTER OF CREDIT AND
GUARANTEE FEE") equal to 2.50% per annum of the face amount of each Letter
of Credit or maximum contingent liability under each Guarantee issued by
the Issuer, plus all out-of-pocket costs, fees and expenses incurred by the
Issuer (other than where such fees, costs or expenses are indemnified
pursuant to clause 6.11.2) in connection with the application for, issue
of, or amendment to any Letter of Credit or Guarantee, such Letter of
Credit and Guarantee Fee to be calculated on the basis of a year of 365
days and actual days elapsed and to be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit or
Guarantee was issued and/or in which a Letter of Credit or Guarantee
remains outstanding and, to the extent that it has been calculated by
reference to a Letter of Credit or Guarantee denominated other than in
sterling, shall be satisfied by payment of the sterling equivalent of the
amount so calculated. Any out-of-pocket costs, fees and expenses incurred
by the Issuer in connection with the application for, issue of, or
amendment to any Letter of Credit or Guarantee shall be payable at the time
of such application, issue or amendment.
22.6 AGENCY AND TRUSTEE FEES
Ideal shall pay to the Agent and the Security Trustee each for its own
account the agency fees or, as the case may be, the trustee fees specified
in the letter dated on or about the date of this Agreement from the Agent
and the Security Trustee respectively to Ideal. The full amount of such
fees shall be deemed to have accrued due and become payable in full on the
Closing Date but the Agent and the Security Trustee each agree, subject to
clause 29.3, that such fees shall be paid in equal instalments on the
Closing Date and on the first day of each calendar month thereafter prior
to the termination of this Agreement.
104
22.7 ADDITIONAL MONITORING AND ADMINISTRATION FEE
Without prejudice to any other rights that the Agent, the Security Trustee
or any of the Beneficiaries may have at such time under this Agreement or
any other Finance Document, Ideal agrees that, upon the appointment of a
receiver, administrator, administrative receiver, trustee, examiner or any
other similar officer or office holder of any Obligor or of any or all of
the assets of any Obligor or upon an order being made for the winding-up,
liquidation or dissolution of any Obligor (the date of such event or
occurrence being the "INSOLVENCY DATE"), Ideal shall become liable to pay
forthwith to the Agent for its own account, an additional monitoring and
administrative fee (the "ADDITIONAL MONITORING AND ADMINISTRATION FEE") in
an amount equal to one per cent. (1%) of the higher of (a) the aggregate
total of all Accounts then due and owing from any Account Debtor to the
Borrowers (as determined by the Agent by reference to the most recent
information provided to it under clause 15.2 and clause 16.4) and (b) the
Total Commitments, in each case, as at the Insolvency Date.
22.8 TERMINATION FEE
On the date on which the Loans are finally repaid and each Letter of Credit
or Guarantee is no longer outstanding, the Borrowers shall pay to the
Agent, for the account of the applicable Receivables Purchaser, a
termination fee in an aggregate amount equal to the lesser of (a)
L10,000,000 and (b) each IDF Portfolio Loss.
23 PRO RATA SHARING
23.1 If a Beneficiary (a "RECOVERING BENEFICIARY") receives or recovers any
amount from an Obligor other than in accordance with clause 20 and applies
that amount to a payment due under the Finance Documents then:
23.1.1 the Recovering Beneficiary shall, within three business days, notify
details of the receipt or recovery to the Agent;
23.1.2 the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Beneficiary would have been paid
had the receipt or recovery been received or made by the Agent and
distributed in accordance with clause 20, without taking account of
any tax which would be imposed on the Agent in relation to the
receipt, recovery or distribution; and
23.1.3 the Recovering Beneficiary shall, within three business days of
demand by the Agent, pay to the Agent an amount (the "SHARING
PAYMENT") equal to such receipt or recovery less any amount which the
Agent determines may be retained by the Recovering Beneficiary as its
share of any payment to be made, in accordance with clause 20.11.
105
23.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Beneficiaries (other than
the Recovering Beneficiary) in accordance with clause 18.9.
23.3 RECOVERING BENEFICIARY'S RIGHTS
23.3.1 On a distribution by the Agent under clause 23.2 the Recovering
Beneficiary will be subrogated to the rights of the Beneficiaries
which have shared in the redistribution.
23.3.2 If and to the extent that the Recovering Beneficiary is not able to
rely on its rights under sub-clause 23.3.1 above, the relevant Obligor
shall be liable to the Recovering Beneficiary for a debt equal to the
Sharing Payment which is immediately due and payable.
23.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a Recovering
Beneficiary becomes repayable and is repaid by that Recovering Beneficiary,
then:
23.4.1 each Beneficiary which has received a share of the relevant Sharing
Payment pursuant to clause 23.2 shall, upon request of the Agent, pay
to the Agent for account of that Recovering Beneficiary an amount
equal to the appropriate part of its share of the Sharing Payment
(together with an amount as is necessary to reimburse that Recovering
Beneficiary for its proportion of any interest on the Sharing Payment
which that Recovering Beneficiary is required to pay); and
23.4.2 that Recovering Beneficiary's rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing Beneficiary for the amount so reimbursed.
23.5 EXCEPTIONS
23.5.1 This clause 23 shall not apply to the extent that the Recovering
Beneficiary would not, after making any payment pursuant to this
clause 23, have a valid and enforceable claim against the relevant
Obligor.
23.5.2 A Recovering Beneficiary is not obliged to share with any other
Beneficiary any amount which the Recovering Beneficiary has received
or recovered as a result of taking legal or arbitration proceedings,
if:
(a) it notified that other Beneficiary of the legal or arbitration
proceedings; and
106
(b) that other Beneficiary had an opportunity to participate in those
legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.
24 COSTS, EXPENSES AND STAMP DUTIES
24.1 INITIAL AND CONTINUING COSTS AND EXPENSES
Ideal shall (or shall procure that an Obligor shall), from time to time on
demand of the Agent, reimburse the Agent for all costs and expenses
(including, without limitation, legal fees) together with VAT thereon
incurred by it in connection with the negotiation, preparation, execution
and administration of each of the Finance Documents and the completion of
the transactions contemplated therein and/or any amendment, variation or
novation of, supplement to, or waiver or consent in respect of, any of the
Finance Documents, the cost of any appraisals, inspections, verifications
and audits of the Collateral or Group's operation the costs and expenses of
forwarding loan proceeds, of the collection of all cheques and other items
of payment, of the establishment and maintenance of any Receivables Account
or other account and the costs and expenses of defending any claims made or
threatened against the Agent arising out of the transactions contemplated
hereby.
24.2 ENFORCEMENT COSTS AND EXPENSES
Ideal shall, from time to time on demand of the Agent, reimburse the Agent,
the Security Trustee and each of the Lenders for all costs and expenses
(including legal fees and a reasonable estimate of the allocable cost of
in-house counsel and staff) together with VAT thereon incurred in or in
connection with the termination of this Agreement or the preservation
and/or enforcement of any of the rights of any of the Beneficiaries under
any of the Finance Documents.
24.3 STAMP DUTIES
Ideal shall (or shall procure that an Obligor shall) pay all stamp,
registration and other taxes to which any of the Finance Documents or any
judgment given in connection with any of the Finance Documents is or at any
time may be subject and shall, from time to time on demand of the Agent,
indemnify the Agent and any other Beneficiaries against any liabilities,
costs, claims and expenses resulting from any failure to pay or any delay
in paying any such tax.
24.4 PROVISIONS RELATING TO PAYMENTS
All payments to be made by Ideal (or any other Obligor) under this clause
24 shall be made whether or not any Loan is made or Letter of Credit or
Guarantee is issued under this Agreement.
107
24.5 INDEMNITY BY BANKS
If Ideal fails to perform any of its obligations under this clause 24, each
Lender shall (i) in the proportion borne by its Outstandings to the
aggregate of the Outstandings of all the Lenders; or (ii) if there are no
Outstandings, in the proportion borne by its Commitment to the Total
Commitments; or (iii) if there are no Outstandings and the Total
Commitments have been cancelled at such time, in the proportion borne by
its Commitment to the Total Commitments immediately before they were
cancelled (in each case determined, and as at such time as may be
specified, by the Agent), indemnify the Agent, the Security Trustee and the
other Lenders against any loss incurred by any of them as a result of such
failure (save for any failure caused by the gross negligence or wilful
default of any such party) and Ideal shall forthwith reimburse each Lender
for any payment made by it pursuant to this clause 24.5.
25 CALCULATIONS AND EVIDENCE OF DEBT
25.1 BASIS OF CALCULATION
Interest shall accrue from day to day and shall be calculated in the case
of sterling on the basis of a year of 365 days (or, in the case of dollars
or euros, 360 days or, in any case where market practice differs, in
accordance with market practice) and the actual number of days elapsed (not
counting within any Interest Period the last day of that Interest Period).
If the basis of accrual of interest or any other amount expressed in this
Agreement in respect of sterling shall be inconsistent with any convention
or practice in the London Interbank Market for the basis of accrual of
interest or any other amount in respect of euro, such expressed basis shall
be replaced by such convention or practice with effect from the date (if
any) of conversion of sterling into euro in accordance with EMU
legislation.
25.2 FAILURE TO SUPPLY QUOTATIONS
In on any occasion a Reference Bank or a Lender fails to supply the Agent
with a quotation required of it under any provision of this Agreement, the
rate for which such quotation was required shall be determined from those
quotations which are supplied to the Agent.
25.3 LOAN ACCOUNTS
Each Lender shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it under this
Agreement.
25.4 CONTROL ACCOUNT
The Agent shall maintain on its books a control account or accounts in
which shall be recorded (i) the amount of any Loan or unpaid sum made or
arising under this Agreement and each Lender's share in such Loan or unpaid
sum, (ii) the
108
amount of all principal, interest and other sums due or to become due from
each Borrower to each of the Lenders under this Agreement and each Lender's
share in each such amount and (iii) the amount of any sum received or
recovered by the Agent under this Agreement and each Lender's share in such
amount.
25.5 LENDERS' BOOKS AND RECORDS.
Each Obligor agrees that the Agent's and the Lenders' books and records
showing all amounts from time to time lent by and owing to any of them
under this Agreement and the transactions pursuant to this Agreement and
the other Finance Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute prima facie proof thereof (in the
absence of manifest error), irrespective of whether any such obligations
are also evidenced by any other instrument.
25.6 MONTHLY STATEMENTS
The Agent will provide to Ideal a monthly statement of Loans, payments and
other transactions pursuant to this Agreement. Such statement shall be
deemed correct, accurate, and binding on the Obligors and as an account
stated (except for reversals and reapplications of payments made as
provided in clause 20.7 and corrections of errors).
25.7 CERTIFICATES
A certificate by the Agent or any other Finance Party as to any sum payable
by it under this Agreement or any other Finance Document shall, in the
absence of manifest error, be conclusive for the purposes of this Agreement
and such Finance Documents and prima facie evidence in any legal action or
proceedings arising out of or in connection with this Agreement or any
other Finance Documents.
25.8 VALUE ADDED TAX
All consideration (including interest and fees) payable under a Finance
Document by the Borrower to a Beneficiary shall be deemed to be exclusive
of any VAT. If VAT is chargeable, the Borrower shall pay to the Beneficiary
(in addition to and at the same time as paying the consideration) an amount
equal to the amount of that VAT. Where a Finance Document requires the
Borrower to reimburse a Beneficiary for any costs or expenses, the Borrower
shall also at the same time pay and indemnify that Finance Party against
all VAT incurred by that Finance Party in respect of the costs and
expenses.
109
26 THE AGENT, THE ARRANGER, THE SECURITY TRUSTEE AND THE LENDERS
26.1 APPOINTMENT
Each Lender, the Arranger and the Security Trustee hereby appoints the
Agent to act as its agent in connection with this Agreement and the Agent
and each of the Lenders hereby appoints the Security Trustee to act as its
trustee under and in relation to the Security Documents pursuant to this
Agreement and to hold the Trust Property as trustee for the Beneficiaries
on the trusts and other terms contained in the Security Documents and each
Beneficiary hereby irrevocably authorises the Agent and the Security
Trustee to exercise such rights, powers and discretions as are specifically
delegated to the Agent or, as the case may be, the Security Trustee by the
terms of this Agreement and the Security Documents together with all such
rights, powers and discretions as are reasonably incidental thereto
provided that the Agent may not begin any legal action or proceeding in the
name of a Lender without its consent.
26.2 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other party under or in connection with
any Finance Document.
26.3 RELATIONSHIPS
The Agent in its capacity as such is agent for the Security Trustee and the
Lenders and shall not in any respect be the agent of any Borrower by virtue
of this Agreement. Nothing in this Agreement shall constitute the Agent or
the Arranger a trustee or fiduciary for the Security Trustee, any Lender,
any Borrower or any other person.
26.4 RIGHTS OF THE AGENT AND THE SECURITY TRUSTEE
Each of the Agent and the Security Trustee may:
26.4.1 assume that any representation made by any Obligor in connection
with any of the Finance Documents is true, that no Event of Default
has occurred and that no Obligor is in breach of or default under its
obligations under any of the Finance Documents, in each such case
unless it has actual knowledge or actual notice to the contrary;
26.4.2 assume that the Facility Office of each Lender is that set out under
its name at the end of this Agreement or, in the case of a Transferee,
at the end of the Transfer Certificate to which it is a party as
Transferee or, in the case of a Lender which is an assignee or other
successor of another Lender or former Lender, the office notified to
the Agent by the assignee or other successor on or before the date it
becomes a
110
Lender or, if the Agent has been notified by any Lender of any change
to its Facility Office in accordance with the terms of this Agreement,
that last notified to the Agent;
26.4.3 engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may
to it seem necessary, expedient or desirable and rely upon any advice
so obtained;
26.4.4 rely as to any matters of fact which might reasonably be expected to
be within the knowledge of an Obligor upon a certificate signed by or
on behalf of that Obligor;
26.4.5 rely upon any communication, certificate, legal opinion or other
document believed by it to be genuine;
26.4.6 refrain from exercising any right, power or discretion vested in it
as agent or, as the case may be, as trustee under any of the Finance
Documents unless and until instructed by the Majority Lenders as to
whether or not such right, power or discretion is to be exercised and,
if it is to be exercised, as to the manner in which it should be
exercised and shall in all cases be fully protected when acting, or
refraining from acting, in accordance with instructions from the
Majority Lenders;
26.4.7 refrain from acting in accordance with any instructions of the
Majority Lenders to protect or enforce the rights of any person under
any of the Finance Documents until it has been indemnified (or
received confirmation that it will be so indemnified) and/or secured
to its satisfaction against any and all costs, losses, expenses
(including legal fees) and liabilities which it will or may expend or
incur in complying with such instructions;
26.4.8 retain for its benefit and without liability to account any fee or
other sum receivable by it for its own account;
26.4.9 accept deposits, lend money to, provide any advisory or other
services to or engage in any kind of banking or other business with
any Company Group and, in each case, may do so without liability to
account.
26.5 OBLIGATIONS OF THE AGENT AND THE SECURITY TRUSTEE
Each of the Agent and the Security Trustee shall:
26.5.1 promptly (or otherwise in accordance with the terms hereof) advise
each Lender of the contents of any notice or document received by it
from any Obligor under any of the Finance Documents in its capacity as
Agent or, as the case may be, Security Trustee, except that details of
111
any such communication relating to a particular Lender shall be
advised to that Lender only;
26.5.2 promptly notify each Lender of the occurrence of any Event of
Default or any default by any Obligor in the due performance of or
compliance with its obligations under any of the Finance Documents of
which the Agent or, as the case may be, the Security Trustee has
actual knowledge or actual notice;
26.5.3 subject to the foregoing provisions of this clause 26, (in the case
of the Agent) act as agent under this Agreement or (in the case of the
Security Trustee) act as trustee for the Beneficiaries in accordance
with any instructions given to it by the Majority Lenders or as this
Agreement may require and shall be fully protected in so doing. Unless
expressly provided otherwise in a Finance Document, any instructions
given by the Majority Lenders shall be binding on each of the
Beneficiaries;
26.5.4 if so instructed by the Majority Lenders, refrain from exercising
any right, power or discretion vested in it in its capacity as Agent
(under this Agreement) or in its capacity as Security Trustee (under
the Finance Documents);
26.5.5 have only those duties, obligations and responsibilities, which it
is hereby acknowledged in the case of the Agent are only of a
mechanical and administrative nature, expressly specified in each of
the Finance Documents to which it is a party.
26.6 EXONERATION
None of the Agent, the Arranger or the Security Trustee nor any of their
respective personnel or agents shall be:
26.6.1 responsible for the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, statement, projection,
assumption or information in any information memorandum or similar
document prepared in connection with any proposed syndication of the
Facilities, any Finance Document or any notice or other document
delivered under or in connection with any Finance Document;
26.6.2 responsible for the execution, delivery, validity, legality,
adequacy, enforceability or admissibility in evidence of any Finance
Document or any such notice or other document;
26.6.3 obliged to enquire as to the occurrence or continuation of a Default
or Event of Default or the performance or compliance by any Obligor
with its obligations under any Finance Documents;
112
26.6.4 bound to account to any person for any sum or the profit element of
any sum received by it for its own account;
26.6.5 bound to disclose to any other person any information relating to
any Obligor or any Group Company, if such disclosure would or might in
its opinion constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person.
26.7 CREDIT ASSESSMENT
Each Lender confirms that it has itself been, and will continue to be,
solely responsible for making its own independent investigation and
appraisal of the business and operations, financial condition, prospects,
creditworthiness, status and affairs of each Borrower, each other Obligor
and each Group Company or any other person and has not relied, and will not
at any time rely, on the Agent, the Security Trustee or any other Lender:
26.7.1 to check or enquire on its behalf into the adequacy, accuracy,
completeness or reasonableness of any representation, warranty,
statement, projection, assumption or information provided by any
Obligor or any other person under or in connection with any Finance
Document or the transactions contemplated in any Relevant Agreement
(whether or not such information has been or is at any time hereafter
circulated to it by the Agent or the Security Trustee including any
contained in any information memorandum or similar document prepared
in connection with any proposed syndication of the Facilities); or
26.7.2 to assess or keep under review on its behalf the business and
operations, financial condition, prospects, creditworthiness, status
or affairs of any Borrower, other Obligor or Group Company or any
other person.
26.8 THE AGENT AND THE SECURITY TRUSTEE AS LENDERS
The Agent and the Security Trustee shall each have the same rights and
powers with respect to its Commitment and Outstandings (if any) as any
other Lender and may exercise those rights and powers as if it were not
also acting as the Agent or, as the case may be, the Security Trustee.
26.9 INDEMNITY
Each Lender agrees that it shall, from time to time on demand of the Agent
and/or Security Trustee, indemnify the Agent and/or Security Trustee (to
the extent not reimbursed by Ideal or any other Obligor and without
prejudice to any liability of the Borrower under this Agreement) (i) in the
proportion borne by its Outstandings to the aggregate of the Outstandings
of all the Lenders; or (ii) if there are no Outstandings, in the proportion
borne by its Commitment to the Total
113
Commitments; or (iii) if there are no Outstandings and the Total
Commitments have been cancelled at such time, in the proportion borne by
its Commitment to the Total Commitments immediately before they were
cancelled (in each case determined, and as at such time as may be
specified, by the Agent), against all costs, claims, expenses (including
legal fees) and liabilities which it may sustain or incur in connection
with this Agreement or the performance of its obligations and
responsibilities under this Agreement save to the extent that they are
sustained or incurred by reason of the gross negligence or wilful
misconduct of the Agent or the Security Trustee or any of its personnel or
agents and Ideal shall (or shall procure that an Obligor shall) forthwith
reimburse each Lender for any payment made by it pursuant to this clause
26.9.
26.10 RESIGNATION
26.10.1 RESIGNATION: Each of the Agent and the Security Trustee may
following consultation with Ideal and the Lenders resign its
appointment under any of the Finance Documents at any time by giving
not less than thirty days' notice in writing to that effect to each of
the other parties to this Agreement provided that such resignation
shall not become effective until a successor to the Agent or, as the
case may be, the Security Trustee has been appointed and accepted its
appointment in accordance with the following provisions of this clause
26.10 and, in the case of the Security Trustee, all necessary
documents have been entered into to ensure that the benefit of the
Security Documents is held by such successor.
26.10.2 APPOINTMENT OF SUCCESSOR: If the Agent or, as the case may be, the
Security Trustee gives notice of its resignation the Majority Lenders
may appoint a successor. If the Majority Lenders have not within sixty
days after such notice of resignation appointed a successor to the
Agent or, as the case may be, the Security Trustee (which shall, in
either such case, be a reputable and experienced bank with an office
in London) which shall have accepted such appointment, the retiring
Agent or, as the case may be, Security Trustee shall have the right to
appoint such a successor itself.
26.10.3 DISCHARGE: If a successor to the Agent or, as the case may be,
Security Trustee is appointed under the provisions of this clause
26.10 then the retiring Agent or, as the case may be, retiring
Security Trustee shall be discharged from any further obligations
under the Finance Documents but shall remain entitled to the benefit
of the provisions of this clause 26 and its successor and each of the
other parties to this Agreement shall have the same rights and
obligations amongst themselves as they would have had if such
successor had been a party to this Agreement.
26.10.4 DISCLOSURE: The retiring Agent or, as the case may be, Security
Trustee, shall make available to its successor such documents and
records and provide such assistance as the successor may reasonably
request for the purpose of performing its functions under the Finance
Documents. Notwithstanding any provision in any Finance Document to
the contrary, neither the Agent nor the Security Trustee shall be
obliged to disclose to any person any confidential or other
information if
114
the disclosure would or might in its reasonable opinion constitute a
breach of any law or fiduciary duty.
27 TRUSTEE PROVISIONS
27.1 DECLARATION OF TRUST
The Security Trustee shall hold the Trust Property in trust for the benefit
of the Beneficiaries on the terms and subject to the conditions set out in
this Agreement and the terms of the other Finance Documents. Each
Beneficiary hereby confirms its approval of the Finance Documents and any
security created or to be created pursuant thereto and hereby authorises,
empowers and directs the Security Trustee (by itself or such person(s) as
it may nominate) to execute and enforce the same as trustee (and whether or
not expressly in the Beneficiaries' names) on its behalf.
27.2 PERPETUITY PERIOD
The perpetuity period under the rule against perpetuities (if applicable)
shall be the period of eighty years from the date of this Agreement.
27.3 SUMS RECEIVED BY THE SECURITY TRUSTEE
Pending distribution under clause 27.4, the Security Trustee shall, if
reasonably practicable, place any sum received, recovered or held by it in
respect of the Trust Property in an interest bearing suspense account with
a bank or financial institution in the name of or under the control of the
Security Trustee. The interest paid on such account shall be credited to
the relevant account.
27.4 APPLICATION OF SUMS RECEIVED
Subject to the other provisions of this clause 27, the Security Trustee
shall apply all amounts standing to the credit of any account referred to
in clause 27.3 and any other amounts realised pursuant to the exercise of
any rights or powers it might have pursuant to any of the Security
Documents:
27.4.1 first, in the payment of any costs, charges and expenses of or
incidental to the appointment of any Receiver pursuant to the Security
Documents, the payment of his remuneration and the payment and
discharge of any other Expenses incurred by or on behalf of the
Receiver;
27.4.2 secondly, in or towards payment of any debts or claims which are by
statute payable in preference to the Secured Obligations but only to
the extent to which such debts or claims have such preference;
27.4.3 thirdly, in or towards payment and discharge pro rata of any Secured
Obligations then due, owing or incurred to the Security Trustee, in
its capacity as Security Trustee (and not in any other capacity) for
its own account; and
115
27.4.4 fourthly, in payment to the Agent to be applied by the Agent in or
towards payment and discharge of the balance of the Secured
Obligations (if any) in accordance with the provisions of clause 20.10
provided that, when distributing sums in accordance with this clause
27.4, the Security Trustee will treat any contingent liability as an
actual liability and distribute to the party entitled thereto
accordingly. Any such party receiving sums in respect of a contingent
liability shall place such sums on deposit with such bank (not being a
bank entitled to exercise any right of set-off or combination or
consolidation of accounts or having the benefit of any encumbrance
over such deposit) and on such terms as the Security Trustee may
approve and, if such contingent liability shall fail to mature, shall
return such sums (together with any interest earned thereon) to the
Security Trustee for distribution in accordance with the terms of this
clause 27.4.
27.5 SECURITY TRUSTEE'S SOLE RIGHT TO APPROPRIATE
No Obligor shall have the right to appropriate any payment to, or other sum
received, recovered or held by, the Security Trustee in or towards payment
of any particular part of the Secured Obligations and the Security Trustee
shall have the exclusive right to appropriate any such payment or other sum
as provided in this clause 27.
27.6 TIMING OF DISTRIBUTION
Distributions by the Security Trustee shall be made at such times as the
Security Trustee in its absolute discretion determines to be as soon as is
reasonably practicable, having regard to all relevant circumstances, and
the Security Trustee shall have no liability whatsoever for any loss or
damage which any Beneficiary might sustain as a consequence of the timing
of any such distribution.
27.7 DATE FOR CALCULATION OF SECURED OBLIGATIONS
For the purpose of any distribution by the Security Trustee, the Security
Trustee may, by notice to the Beneficiaries, fix a date (being not earlier
than the date of such notice) as at which the amount of the Secured
Obligations are to be calculated.
27.8 CERTIFICATE FROM BENEFICIARY
For the purposes of determining the amount of any payment to be made to any
Beneficiary pursuant hereto the Security Trustee shall be entitled to call
for and rely upon (and it is the intention of the parties that the Security
Trustee shall rely upon) a certificate from the relevant Beneficiary of the
amount and nature of any amount due, owing or incurred to the relevant
Beneficiary at the date fixed by the Security Trustee for such purpose and
as to such other matters as the Security Trustee may deem necessary or
desirable to enable it to make a distribution.
116
27.9 MISTAKEN PAYMENTS
If the Security Trustee makes any distribution contrary to any of the
provisions of this clause 27 or any distribution made by it otherwise
transpires to have been invalid or the Security Trustee and the person
receiving such distribution agree that it should be refunded, the recipient
shall, to the extent that no charge is thereby created, hold the proceeds
of that distribution on trust to repay to the Security Trustee forthwith on
demand. If the trust imposed by this clause 28.9 cannot be given effect to
for whatever reason, including the possible creation thereby of a charge,
the relevant recipient shall, if and when so requested by the Security
Trustee, pay an amount equal to the proceeds of that distribution required
to be held on trust to the Security Trustee.
27.10 SUPPLEMENT TO TRUSTEE ACTS 1925 & 2000
By way of supplement to the Trustee Acts 1925 & 2000 it is expressly
declared as follows:
27.10.1 EXPERTS: the Security Trustee may, in relation to the Security
Documents, act or rely upon the opinion or advice of, or any
information obtained from, any lawyer, valuer, surveyor, broker,
auctioneer, accountant or other expert commissioned by the Security
Trustee and shall not be responsible to anyone for any loss or damage
occasioned by so acting or relying. Any such opinion, advice or
information may be sent or obtained by letter, fax, e-mail or
otherwise and the Security Trustee will not be liable to anyone for
acting in good faith on any opinion, advice or information purporting
to be conveyed by such means even if it contains some error or is not
authentic or validly signed;
27.10.2 CERTIFICATE OF IDEAL: the Security Trustee may call for and may
accept as sufficient evidence a certificate of Ideal signed by any
director of Ideal to the effect that any particular dealing,
transaction, step or thing is, in the opinion of such director,
suitable or expedient or as to any other fact or matter upon which the
Security Trustee may, in the exercise of any of its rights, powers or
duties hereunder, require to be satisfied and the Security Trustee
need not call for further evidence and will not be responsible to
anyone for any loss or damage occasioned by acting on any such
certificate;
27.10.3 INTERPRETATION OF SECURITY DOCUMENTS: the Security Trustee (as
between itself and each of the Beneficiaries) shall have full power to
determine in good faith all questions and doubts arising in relation
to any of the provisions of the Security Documents and every such
determination, whether made upon such a question actually raised or
implied in the acts or proceedings of the Security Trustee, shall be
conclusive and shall (save for manifest error) bind the Security
Trustee and each Beneficiary;
117
27.10.4 TITLE: the Security Trustee shall accept without enquiry,
requisition, objection or investigation such title as any Borrower
(or, as the case may be, any Obligor) has to the Trust Property to the
intent that the Security Trustee shall not in any way be responsible
for its inability to exercise any of its rights or powers or duties
hereunder or for any loss or damage thereby occasioned;
27.10.5 PERFECTION OF SECURITY: the Security Trustee shall not be liable
for any failure, omission or defect in perfecting any security created
or purported to be created by or pursuant to any of the Security
Documents including (without prejudice to the generality of the
foregoing):
(a) failure to obtain any licence, consent or other authority for the
execution, delivery, validity, legality, adequacy, performance,
enforceability or admissibility in evidence of any of the
Security Documents or any other document;
(b) failure to effect or procure registration of or otherwise protect
any security created or purported to be created by or pursuant to
any of the Security Documents or any other document by
registering under any applicable registration laws in any
territory, any notice, caution or other entry prescribed by or
pursuant to the provisions of the said laws;
(c) failure to take or require any of the Obligors to take any steps
to render the security created or purported to be created by or
pursuant to any of the Security Documents effective as regards
any property outside England and Wales or to secure the creation
of any ancillary charge under the laws of any territory
concerned; or
(d) failure to call for delivery of documents of title to or require
transfers, legal mortgages, charges or other further assurances
in relation to any of the Trust Property;
27.10.6 ACTS AND OMISSIONS: the Security Trustee shall not in fulfilling
its duties and discharging its responsibilities as Security Trustee be
liable or responsible for any loss or damage which may result from
anything done or omitted to be done by it in accordance with the
provisions of the Security Documents;
27.10.7 COMPLIANCE WITH LAWS: the Security Trustee may refrain from doing
anything which would or might in its opinion be contrary to any law of
any jurisdiction or any regulation or which would or might otherwise
render it liable to any person and may do anything which is, in its
absolute discretion, necessary to comply with any such law or
regulation;
118
27.10.8 DEPOSIT OF SECURITY DOCUMENTS: the Security Trustee shall be at
liberty to place all title deeds and other documents certifying,
representing or constituting the title to any of the Trust Property
for the time being in its hands in any safe deposit, safe or
receptacle selected by the Security Trustee or with any bankers or
banking company (including the Security Trustee or the Agent or any of
the other Beneficiaries) or company whose business includes
undertaking the safe custody of documents or solicitors or firm of
solicitors, may pay all reasonable sums required to be paid on account
of or in respect of such deposit and may make any such arrangements as
it thinks fit for allowing any of the Obligors or their respective
lawyers or auditors access to or possession of such title deeds and
other documents when necessary or convenient and the Security Trustee
shall not be responsible for any loss incurred in connection with any
such deposit, access or possession;
27.10.9 USE OF NOMINEES: any investment of any part or all of the Trust
Property may, at the discretion of the Security Trustee, be made or
retained in the names of nominees;
27.10.10 DELEGATION: the Security Trustee may, whenever it thinks fit,
delegate by power of attorney or otherwise to any person or persons,
or fluctuating body of persons, all or any of the rights, powers,
authorities and discretions vested in it by any of the Finance
Documents and such delegation may be made upon such terms and subject
to such conditions (including the power to sub-delegate) and subject
to such regulations as it may think fit and it shall not be bound to
supervise, or to be in any way responsible for any loss, liability,
costs, charges or expenses incurred by reason of any misconduct or
default on the part of, any such delegate or sub-delegate (other than
as a result of its gross negligence or wilful misconduct); and
27.10.11 INSURANCE: without prejudice to any other provision of any of the
Finance Documents, the Security Trustee shall not be under any
obligation to insure any of the Trust Property or to require any other
person to maintain any such insurance and shall not be responsible for
any loss or damage which may be suffered by any person as a result of
the lack of or inadequacy or insufficiency of any such insurance.
27.11 REGISTRATION AS JOINT PROPRIETOR
Each of the Beneficiaries hereby confirms and agrees that it does not wish
to be registered in accordance with Rule 146 of the Land Registration Rules
1925 as the joint proprietor of any mortgage or charge created pursuant to
any Finance Document and accordingly authorises the Security Trustee to
hold such mortgage or charge in its sole name as agent and trustee for the
Beneficiaries and hereby requests the Land Registry to register the
Security Trustee as the sole proprietor of any such mortgage or charge.
119
27.12 RELATIONSHIP WITH THE BENEFICIARIES
The Security Trustee shall, for the purposes of the Finance Documents, be
entitled to deal with each of the Beneficiaries by dealing exclusively with
the Agent.
27.13 INDEMNITY PROVISIONS
The Security Trustee and every attorney, agent or other person appointed by
it under any of the Finance Documents may indemnify itself or himself out
of the Trust Property against all claims, demands, liabilities,
proceedings, costs, fees, charges, losses and expenses incurred by any of
them in relation to or arising out of the taking or holding of the Trust
Property, the exercise or purported exercise of the rights, trusts, powers
and discretions vested in any of them or any other matter or thing done or
omitted to be done in connection with any of the Finance Documents or
pursuant to any law or regulation (otherwise than as a result of its gross
negligence or wilful misconduct). Any appointee referred to above may enjoy
the benefit and enforce the terms of this clause 27.13 in accordance with
the provisions of the Contracts (Rights of Third Parties) Act 1999.
27.14 APPOINTMENT OF ADDITIONAL SECURITY TRUSTEES
The Security Trustee may at any time appoint any person (whether or not a
trust corporation) to act either as a separate trustee or as a co-trustee
jointly with it (i) if it considers such appointment to be in the interests
of the Beneficiaries or (ii) for the purposes of conforming to any legal
requirements, restrictions or conditions which the Security Trustee deems
relevant for the purposes hereof and the Security Trustee shall give prior
notice to the Obligors of any such appointment. Any person so appointed
shall (subject to the provisions of the Finance Documents) have such
powers, authorities and discretions and such duties and obligations as
shall be conferred or imposed on such person by the instrument of
appointment and shall have the same rights, powers, discretions and
benefits under the Finance Documents as the Security Trustee. Save where
the contrary is indicated or unless the context otherwise requires any
reference in the Finance Documents to the Security Trustee shall be
construed as a reference to the Security Trustee and each such separate
trustee and co-trustee. The Security Trustee shall have power in like
manner to remove any person so appointed. Such remuneration as the Security
Trustee may pay to any person so appointed, and any costs, charges and
expenses incurred by such person in performing its functions pursuant to
such appointment, shall for the purposes hereof be treated as costs,
charges and expenses incurred by the Security Trustee in performing its
function as trustee hereunder.
120
28 ASSIGNMENTS AND TRANSFERS
28.1 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each of
the parties to it, any Transferee which becomes a party to it pursuant to a
Transfer Certificate and each of their respective successors and assigns.
28.2 ASSIGNMENTS AND TRANSFERS BY AN OBLIGOR
No Obligor shall be entitled to assign or transfer all or any of its rights
or obligations under this Agreement.
28.3 ASSIGNMENTS AND TRANSFERS BY LENDERS
28.3.1 Any Lender may at any time with the prior consent of the Agent and
after consultation with Ideal but without the prior consent of Ideal
or any other party to this Agreement assign all or any of its rights
under this Agreement to any bank or financial institution which is a
Qualifying Lender or transfer in accordance with clause 28.4 all or
any of its rights and obligations under this Agreement to any such
Qualifying Lender.
28.3.2 If any Lender assigns all or any of its rights under this Agreement
in accordance with clause 28.3.1 then, unless and until the assignee
has agreed with the Agent, the Security Trustee and the other Lenders
that it shall be under the same obligations towards each of them as it
would have been under if it had been a party to this Agreement, the
Agent, the Security Trustee and the other Lenders shall not be obliged
to recognise such assignee as having the rights against each of them
which it would have had if it had been a party to this Agreement.
28.4 TRANSFER CERTIFICATE
If any Lender wishes to transfer all or any of its rights and obligations
under this Agreement in respect of the whole or any part of any Commitment
in respect of the Revolving Facility and/or its Outstandings as
contemplated in clause 28.3.1, then such transfer may be effected by the
delivery to the Agent of a duly completed and duly executed Transfer
Certificate but only if it relates to its Commitment and/or its
Outstandings in respect of all the Facilities in which it is participating
at that time. Subject to clause 28.5, the Agent shall, on receipt of such
certificate, countersign it and subject to the terms of that Transfer
Certificate and on the date specified in that Transfer Certificate:
28.4.1 each Obligor and the relevant Lender shall, to the extent provided
in such Transfer Certificate, each be released from further
obligations to each other under this Agreement and their respective
rights against each other shall be cancelled (such rights and
obligations being referred to in this clause 28 as "DISCHARGED RIGHTS
AND OBLIGATIONS");
121
28.4.2 each Obligor and the Transferee party to the relevant Transfer
Certificate shall each assume obligations towards, and acquire rights
from, each other which differ from the discharged rights and
obligations only insofar as such Obligor and the Transferee have
assumed and acquired the same in place of such Obligor and that
Lender;
28.4.3 the Transferee and the other parties to this Agreement (other than
the Obligor) shall acquire the same rights and assume the same
obligations between themselves as they would have acquired and assumed
had such Transferee been an original party to this Agreement as a
Lender with the rights and obligations acquired or assumed by it as a
result of such transfer (and, to that extent, the transferor Lender
and such other parties shall each be released from further obligations
to each other).
28.5 ACCEPTANCE AND DELIVERY OF TRANSFER CERTIFICATES
The Agent shall not be obliged to accept any Transfer Certificate received
by it under this Agreement on any day on or after the receipt by it of a
Utilisation Notice and prior to the making of the relative Loan or issue of
the relevant Letter of Credit or Guarantee. Further, the Agent shall not be
obliged to accept a Transfer Certificate unless the Lender delivering that
Transfer Certificate has also delivered to the Agent and the Receivables
Purchaser a duly signed and dated substitution certificate (as provided for
in the funding agreement to be entered into between the Lenders and the
Receivables Purchaser) in connection with the Invoice Discounting
Agreements in form and substance satisfactory to the Agent and the
Receivables Purchaser pursuant to which it agrees, amongst other things, to
participate through its Facility Office in all Prepayments and other
payments to be made by the Receivables Purchaser under the applicable
Invoice Discounting Agreement in the proportion which its Commitment bears
to the Total Commitments immediately prior to the making of such
Prepayments or other payment. Subject thereto the Agent shall promptly
deliver a copy of any Transfer Certificate received by it to Ideal.
28.6 RELIANCE ON TRANSFER CERTIFICATES
The Agent shall be fully entitled to rely on any Transfer Certificate
delivered to it in accordance with the provisions of this clause 28 which
is complete and regular on its face as regards its contents and purportedly
signed on behalf of the Lender and the Transferee and shall have no
liability or responsibility to any party as a consequence of placing
reliance on and acting in accordance with any such Transfer Certificate.
28.7 REGISTER OF ASSIGNMENTS, TRANSFERS AND FEES
28.7.1 REGISTER: The Agent shall (on behalf of the Lenders) maintain at its
address for the service of notices as specified in clause 31 a
register in which the Agent shall, as soon as practicable following
the date of this Agreement and thereafter on each
122
business day following receipt by it of any Transfer Certificate duly
completed in accordance with the provisions of this clause 28 or any
certificate signed on behalf of each Lender assigning any of its
rights hereunder and the person to whom such rights are to be assigned
(provided the provisions of clause 28.3 have been complied with) and
in each such case incorporating the administrative details of the
Transferee or assignee, record (where appropriate in place of the
corresponding details relating to the transferor or assigning Lender)
the names, interests and administrative details from time to time of
the Lenders having rights and/or obligations under this Agreement. The
Agent shall make the register available for inspection by any party to
this Agreement during normal banking hours upon receipt by the Agent
of reasonable prior notice to that effect.
28.7.2 FEES: On the date upon which the transfer or assignment takes effect
in accordance with the terms of this Agreement and, as the case may
be, any Transfer Certificate or assignment documents, the Transferee
named in the Transfer Certificate or the relevant assignee shall pay
to the Agent for its own account a transfer fee of L2000.
28.8 CHANGE OF FACILITY OFFICE
Any Lender may at any time change its Facility Office in relation to its
Commitment and/or Outstandings by notifying the Agent of the address and
fax details of such new office.
28.9 DISCLOSURE OF INFORMATION
The Agent, the Security Trustee or any Lender may (on a confidential basis)
disclose to any actual or potential assignee, Transferee, sub-participant
or other person who may otherwise enter into or be proposing to enter into
contractual relations with the Agent, the Security Trustee or such Lender
(as the case may be) in relation to this Agreement such information about
any Borrower, any other Obligor or any other person as it thinks fit.
28.10 INCREASED PAYMENTS FOLLOWING ASSIGNMENT OR TRANSFER
If at the time of, or immediately after, any assignment or transfer by a
Lender or any change in its Facility Office, circumstances are such that
any Obligor would be obliged to pay to an assignee, Transferee (or, in the
case of a change of Facility Office, the relevant Lender) under clause 10
or 11 any sum in excess of the sum (if any) which it would have been
obliged to pay to that Lender under the relevant clause in the absence of
that assignment, transfer or change, that Obligor shall not be obliged to
pay that excess.
123
29 TERM AND TERMINATION
29.1 EXPIRY OF AGREEMENT
This Agreement shall expire on the Termination Date unless earlier
terminated in accordance with the terms of this Agreement.
29.2 RIGHTS TO TERMINATE
Ideal may terminate this Agreement at any time prior to the Termination
Date if:
29.2.1 it gives the Agent sixty (60) days prior written notice of
termination;
29.2.2 it has paid and performed in full all its obligations hereunder on
or prior to the effective date of termination; and
29.2.3 it pays the Agent, on or prior to the effective date of termination,
and in addition to any other prepayment premium required hereunder and
any amounts required by clauses 19.1 and 19.2:
(a) 2% of the aggregate on such date of (i) the Maximum Revolving
Credit Line, if such termination is made on or prior to the first
Anniversary Date;
(b) 1% of the aggregate on such date of the Maximum Revolving Credit
Line, if such termination is after the first Anniversary Date but
on or prior to the second Anniversary Date; and
(c) 0.5% of the aggregate on such date of the Maximum Revolving
Credit Line, if such termination is at any time after the second
Anniversary Date but on or before the third Anniversary Date.
29.3 EFFECT OF TERMINATION
Upon the effective date of termination of this Agreement for any reason
whatsoever, the Loans, all unpaid accrued interest or fees and any other
sum then payable under this Agreement shall become immediately due and
payable, the Commitment and the Available Commitment of each Lender shall
be reduced to nil and each relevant Borrower shall immediately arrange for
the cancellation of each Guarantee or Letter of Credit then outstanding and
shall deposit with the Security Trustee with respect thereto a Supporting
Letter of Credit or cash in the same manner as contemplated in clause 6.14.
Notwithstanding the termination of this Agreement, until all such sums are
paid and performed in full, the Agent and the Lenders shall retain all
their rights and remedies hereunder and under all other Finance Documents.
124
30 AMENDMENTS, WAIVERS AND REMEDIES
30.1 AMENDMENTS
Subject to the proviso to this clause 30.1, the Agent may if authorised by
the Majority Lenders in writing (or to the extent expressly authorised by
the other provisions of this Agreement or any other document entered into
pursuant to this Agreement) on behalf of the Lenders amend or vary the
terms of or waive breaches of or defaults under, or otherwise excuse
performance of any provision of, or grant consents under, this Agreement or
any such other document. Any amendment, variation, waiver, release or
consent authorised under this clause 30.1 and which is effected by the
Agent must be in writing and may be given subject to such conditions as the
person giving it may specify and shall be binding on all the parties to
this Agreement and the Agent shall be under no liability in respect thereof
provided that the consent of all the Lenders in writing shall be required
in respect of:
30.1.1 any increase in the Total Commitments or change in the Termination
Date;
30.1.2 any extension of the date for, or alteration in the amount or
currency of, any payment of principal, interest, fee or other amounts
payable under this Agreement;
30.1.3 any change in the rate at which interest is payable under this
Agreement;
30.1.4 the definition of "MAJORITY LENDERS";
30.1.5 any release or deferment of the granting or perfecting of an
encumbrance or any of the Collateral except in connection with any
permitted disposal of Equipment or any disposal permitted under clause
16.3.2) or any Security Interest or any guarantee or similar
undertaking provided by any person;
30.1.6 this clause 30.1.
30.2 WAIVERS
No failure to exercise, nor any delay in exercising, on the part of the
Agent, the Security Trustee or any Lender, any right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy prevent any further or other
exercise of such right or remedy or the exercise of any other right or
remedy. The rights and remedies provided in this Agreement are cumulative
and not exclusive of any rights or remedies provided by law.
125
31 PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction:
31.1 it shall be ineffective only to that extent, without invalidating the
remainder of such Finance Document(s); and
31.2 neither the legality, validity or enforceability of such provision
under the law of any other jurisdiction will in any way be affected or
impaired thereby.
32 NOTICES
32.1 GENERAL
Any demand, notice or other communication or document to be made or
delivered under or in connection with the Finance Documents shall be made
or delivered by fax or otherwise in writing and shall be treated as having
been served if served in accordance with clause 32.2. Each demand, notice,
communication or other document to be made on or delivered to any party to
the Finance Documents may (unless that other person has by 10 business
days' written notice to the other specified another address or fax number)
be made or delivered to that other person at its registered office or the
address or fax number (if any) set out under its name at the end of this
Agreement or, in the case of a Transferee, at the end of the Transfer
Certificate to which it is a party as Transferee or, in the case of a
Lender which is an assignee or other successor of another Lender or former
Lender, as notified to the Agent by the assignee or other successor on or
before the date it became a Lender.
32.2 MODE OF SERVICE
Any demand, notice, communication or other document to be made or delivered
from or to an Obligor shall be delivered to, by or through the Agent.
Subject thereto, service of any demand, notice or other communication or
document to be made or delivered under the Finance Documents may be made:
32.2.1 by leaving it at the address for service referred to in clause 32.1;
32.2.2 by sending it by pre-paid first class letter (or by airmail if to or
from an address outside the United Kingdom) through the post to the
address for service referred to in clause 32.1; or
32.2.3 by fax to the fax number of the recipient and so that any fax shall
be deemed to be in writing and, if it bears the signature of the
server or its authorised representative or agent, to have been signed
by or on behalf of the server.
126
32.3 DEEMED SERVICE
32.3.1 Any notice or other communication or document from an Obligor (or
Idea on its behalf) shall be irrevocable and shall not be effective
until its actual receipt by the Agent. Any other notice, demand or
other communication or document shall be served or treated as served
at the following times:
(a) in the case of service personally or in accordance with clause
32.2.1, at the time of such service;
(b) in the case of service by post, at 9.00 am on the working day
next following the day on which it was posted or, in the case of
service to or from an address outside the United Kingdom, at 9.00
am on the fourth day following the day on which it was posted;
and
(c) in the case of service by fax, if sent before 9.00 am on a
working day, at 11.00 am on the same day, if sent between 9.00 am
and 5.30 pm on a working day, two hours after the time of such
sending or, if sent after 5.30 pm on a working day or on a day
other than a working day, at 9.00 am on the next following
working day.
32.3.2 For the purposes of this clause 32 the term "WORKING DAY" shall mean
a day (other than a Saturday or Sunday) upon which the recipient of
any demand, notice, communication or other document is normally open
for business in the country of its address for service referred to in
clause 32.1 and references to any time of day shall be construed as
references to the time of day on such working day in that country.
32.4 PROOF OF SERVICE
In proving service of any demand, notice, communication or other document
served:
32.4.1 by post, it shall be sufficient to prove that such demand, notice,
communication or other document was correctly addressed, full postage
paid and posted; and
32.4.2 by fax, it shall be sufficient to prove that the fax was followed by
such machine record as indicates that the entire fax was sent to the
relevant number.
33 COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.
127
34 DUTCH PARALLEL DEBT
Without prejudice to the provisions of this Agreement and for the purpose
of ensuring and preserving the validity and continuity of the security
rights granted and to be granted by any of the Obligors under or pursuant
to the Security Documents, each of the Beneficiaries hereby acknowledges
and consents to BMEBV and to any other Obligor incorporated or established
under the laws of the Netherlands (each, a "DUTCH OBLIGOR") that are at any
time party to any Security Document, undertaking to pay to Bank of America,
National Association, acting in its capacity as Security Trustee, amounts
(i) equal to the amounts due from time to time by the Obligors to the
Beneficiaries in respect of the Secured Obligations and (ii) due and
payable at the same time as the corresponding amounts in respect of the
Secured Obligations are or shall be due and payable (such payment
undertaking and the obligations and liabilities resulting therefrom being,
the "PARALLEL DEBT"). The Beneficiaries hereby agree that the Parallel Debt
is a claim of Bank of America, National Association (in its capacity as
Security Trustee) which is independent and separate from, and without
prejudice to, the claims of Beneficiaries in respect of the Secured
Obligations, and is not a claim which is held jointly with the
Beneficiaries provided that, to the extent any amounts are paid to Bank of
America, National Association under the Parallel Debt or that Bank of
America, National Association otherwise receives monies in payment of the
Parallel Debt, the total amount due and payable in respect of the Secured
Obligations shall be decreased as if the said amounts were received
directly in payment of the outstanding Secured Obligations. Bank of
America, National Association, acting in its capacity as Security Trustee,
hereby agrees to transfer to the Agent for the benefit of the Beneficiaries
all proceeds that it receives or recovers from any Dutch Obligor in
connection with any enforcement action taken under or pursuant to any
Security Document.
35 LAW AND JURISDICTION
35.1 LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
35.2 JURISDICTION
35.2.1 SUBMISSION: Each Obligor irrevocably agrees for the benefit of the
other parties hereto that the courts of England shall have
jurisdiction to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with
this Agreement and, for such purposes, irrevocably submits to the
jurisdiction of such courts.
35.2.2 FORUM: Each Obligor irrevocably waives any objection which it might
now or hereafter have to the courts referred to in clause 35.2.1 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any
128
disputes, which may arise out of or in connection with this Agreement
and agrees not to claim that any such court is not a convenient or
appropriate forum.
35.2.3 SERVICE OF PROCESS: BMEH, BMEP and BMEBV each agree that the process
by which any suit, action or proceeding is begun may be served on it
by being delivered in connection with any suit, action or proceeding
in England, to Ideal at its registered office for the time being.
35.2.4 OTHER COMPETENT JURISDICTIONS: The submission to the jurisdiction of
the courts referred to in clause 35.2.1 shall not (and shall not be
construed so as to) limit the right of the other parties hereto, or
any of them, to take proceedings against any Obligor in any other
court of competent jurisdiction nor shall the taking of proceedings in
any one or more jurisdictions preclude the taking of proceedings in
any other jurisdiction, whether concurrently or not.
35.2.5 CONSENT TO ENFORCEMENT: Each Obligor hereby consents generally in
respect of any legal action or proceeding arising out of or in
connection with this Agreement to the giving of any relief or the
issue of any process in connection with such action or proceeding
including, without limitation, the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such
action or proceeding.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
129
SCHEDULE 1
LENDERS AND COMMITMENTS
LENDER COMMITMENT L
------ ------------
Bank of America, National Association 75,000,000
130
SCHEDULE 2
CONDITIONS PRECEDENT
A ORIGINAL DOCUMENTS TO BE COLLECTED BY THE AGENT
1 A certificate dated in the form appearing in Schedule 3 duly executed by
each Obligor with all required enclosures.
2 The Debenture duly executed by each Obligor and all other documents to be
delivered pursuant thereto and notice of the assignment of each of its
Receivables Accounts and of the Policies (as therein defined) having been
given to, and acknowledged by, the bank at which each such Receivables
Account is to be maintained or, as appropriate, by the relevant broker or
insurer with which or through whom such Policy is placed.
3 All share certificates in respect of shares held by each Obligor and
charged pursuant to the Debenture together with instruments of transfer
endorsed in blank as required by the terms of the Debenture.
4 Confirmation from Ideal that the terms of all contracts or arrangements
under which Inventory is supplied to the Trading Companies on reservation
of title terms have not been amended since completion of the review thereof
by the Agent during the July/August 2002 audit.
5 Utilisation Notice in respect of the first Revolving Loan and any Swingline
Loan in substantially the form set out in Schedule 4 duly executed by the
relevant Borrower.
6 Policies of insurance, including credit insurance, acceptable to the Agent
with the name of the Security Trustee endorsed as loss payee in respect of
such policies as may be specified by the Agent and acknowledgements of
assignment in satisfactory terms signed by underwriters of the insurance
policies assigned by the Obligors pursuant to the Debenture.
7 In relation to each Obligor, details of each of its clearing accounts and
each (if any) of its Receivables Accounts.
8 An opinion of Dutch counsel addressed to the Agent as to, among other
matters, the entry into and performance by BMEP and BMEBV of the Finance
Documents to which they are a party and legal, valid, binding and
enforceable nature of their respective obligations thereunder.
9 The Pro-Forma Balance Sheet of BMEP.
10 The Latest Projections.
11 The Priority Agreement duly executed by the parties thereto.
131
12 A Warranty (in terms satisfactory to the Agent) by Ideal as to the value of
the Inventory and the Accounts of the Trading Companies as at the Closing
Date.
13 A report by Ideal showing, in relation to the Trading Companies, details of
monthly ageings of accounts receivable, monthly ageings of accounts payable
and details of all preferential creditors and of cash, if any, at bank as
at 31 October 2002.
14 An undertaking issued by The Royal Bank of Scotland plc in favour of the
Security Trustee agreeing, on the terms and conditions therein set out, to
effect a daily cash sweep to the Security Trustee of all amounts standing
to the credit of the account therein described.
B EVIDENCE
1 Evidence as to the discharge of all indebtedness and financing facilities
(other than Permitted Indebtedness) (including, without limitation, the
discharge in full of the Existing Facilities) of and encumbrances (other
than Permitted Encumbrances) over the assets of, any Group Company which
may exist at the date of this Agreement including, without limitation, all
encumbrances created by any Group Company in favour of National Westminster
Bank Plc or The Royal Bank of Scotland Commercial Services Limited or any
of their Affiliates other than the legal mortgage dated 31 October 2000
created by Bell Microproducts Limited over the Chessington Property in
favour of the existing Chessington Mortgagee.
2 Ideal shall have paid (to the extent then payable) all fees payable on the
date of this Agreement including all fees and expenses of the Agent's legal
advisers in connection with any of the Finance Documents and the
transactions contemplated thereby.
3 The Agent being satisfied that the ageing profile and turnover of Accounts
and Inventory has not deteriorated as against their ageing profile and
turnover at the time of the audit thereof by the Agent.
4 There shall have occurred no material adverse change in the business or
financial condition of any Borrower, any Obligor or the Group (taken as a
whole) or in the Collateral since the date of the Pro Forma Balance Sheet
and the Group has met the financial performance projections contained in
the Latest Projections, and the Agent has received a certificate of Ideal's
chief executive officer to such effect.
5 After taking into account any Revolving Loans or Swingline Loans to be made
on the Closing Date and any Letters of Credit or Guarantees issued or to be
issued on the Closing Date and with all the obligations of the Borrowers
being current there shall be remaining an Available Revolving Facility
Amount of at least L5,000,000.
132
6 Evidence satisfactory to the Agent that there has been no change to the
legal structure of Group since 1 June 2002 and that the Adjusted Tangible
Net Worth of BMEP is not less than EUR18,467,000.
7 Evidence that Ideal has agreed to act as the agent of BMEP and BMEBV for
the service of process in England.
SCHEDULE 3
FORM OF OBLIGOR'S CERTIFICATE
From: [Obligor's name and address]
To: Bank of America, National Association
Business Credit, Portfolio Management
5 Canada Square
London, E14 5AQ
as Agent for and on behalf of the Lenders
Attention: Carmen Bernardis
CREDIT AGREEMENT DATED 2 DECEMBER 2002 AND MADE BETWEEN, AMONG OTHERS, IDEAL
HARDWARE LIMITED AND BELL MICROPRODUCTS EUROPE EXPORT LIMITED AS ORIGINAL
BORROWERS, BANK OF AMERICA, NATIONAL ASSOCIATION AS AGENT, ARRANGER, ISSUER,
SWINGLINE LENDER AND SECURITY TRUSTEE AND THE LENDERS NAMED THEREIN (AS AMENDED
FROM TIME TO TIME THE "CREDIT AGREEMENT").
This certificate is provided for the purposes of the Credit Agreement. Unless
stated otherwise, terms defined in the Credit Agreement shall have the same
meanings in this certificate. We [______], and [______], the secretary and a
director respectively of the [relevant Obligor] hereby certify that:
1 The copy or copies delivered herewith:
1.1 of the memorandum and articles of association, certificate of
incorporation and certificate(s) of incorporation on change of name
(if any) of [relevant Obligor] marked "A";
1.2 of a resolution of the board of directors of [relevant Obligor]
approving the execution and delivery of the Finance Documents to which
it is party and the performance of its obligations thereunder and
authorising a named person or persons to sign such Finance Documents
and any documents to be delivered by [relevant Obligor] pursuant
thereto marked "B";
133
1.3 marked "C", being copies of each law, decree, consent, licence,
approval, registration or declaration as is, in the opinion of local
counsel to the Agent, necessary to render the Finance Documents to
which it is a party valid, legally binding and enforceable and to make
each of them admissible in evidence in England and Wales and, if
different, the [relevant Obligor's] jurisdiction of incorporation and
any jurisdiction in which any of its assets may be situated and to
enable [relevant Obligor] to perform its obligations under such
Finance Documents;
1.4 [marked "D", being copies of each Environmental Licence held by
[relevant Obligor];]
1.5 [marked "E", being copies of each policy of insurance maintained by
each Borrower and each other [Obligor] [Group Company];]*
1.6 [marked "F" are copies of each of the Material Contracts as may be
required by the Agent; and]*
1.7 [of the register of members and directors and secretary of [relevant
Obligor] marked "G"],
are in each such case true, complete and up to date copies of the
originals.
2 The persons whose names are listed below have been authorised on behalf of
the [relevant Obligor], and pursuant to the board resolution described
above to execute the Finance Documents to which [relevant Obligor] is party
and any documents or notices to be delivered by [relevant Obligor] pursuant
thereto and the signatures set opposite their names are their true
signatures:
NAME OF SIGNATORY SIGNATURE
- ------------------------- ------------------------- ------------------------
- ------------------------- ------------------------- ------------------------
- ------------------------- ------------------------- ------------------------
- ------------------------- ------------------------- ------------------------
- ------------------------- -------------------------
Secretary
Name: Date
134
- ------------------------- -------------------------
Director
Name: Date
[relevant Obligor]
* Ideal's certificate only
135
SCHEDULE 4
FORM OF UTILISATION NOTICE
From: [relevant Borrower]
To: Bank of America, National Association
Business Credit, Portfolio Management
5 Canada Square
London, E14 5AQ
as Agent for and on behalf of the Lenders
Dear Sirs,
1 We refer to the agreement (as from time to time amended, varied,
supplemented, novated or replaced, the "CREDIT AGREEMENT") dated 2 December
2002 and made between, among others, ourselves as Borrower, yourselves as
the Agent, Arranger and Security Trustee and the Lenders therein referred
to. Terms defined in the Credit Agreement have the same meanings in this
notice.
2 We hereby give you irrevocable and unconditional notice that, pursuant to
the Credit Agreement and on [date of proposed Loan/issue of Letter of
Credit/issue of Guarantee], we wish to:
2.1 borrow a Swingline Loan [in the amount of L_____] [in the Original
Sterling Amount of L_____] [in [specify agreed Foreign Currency]];
2.2 borrow a [Reference Rate/LIBOR] Revolving Loan [in the amount of
L_____] [in the Original Sterling Amount of L_____] [in [specify
agreed Foreign Currency]] having an initial Interest Period of [____]
months;
2.3 [have a Letter of Credit issued in favour of [_______________________]
for [L_____ /other currency amount] maturing not later than [________]
and in respect of [specify details]];
2.4 [have a Guarantee issued in favour of [_______________________] for
[L_____ /other currency amount] maturing not later than [____________]
and in respect of [specify details]],
[in each case] upon the terms and subject to the conditions contained in
the Credit Agreement.
136
3 We confirm that, as at today's date, the representations set out in clauses
14.1 and 14.2 of the Credit Agreement are true and that no Default has
occurred or is foreseen by us.
Yours faithfully,
- ----------------------------------------
for and on behalf of
[RELEVANT BORROWER]
137
SCHEDULE 5
MANDATORY COST FORMULAE
1 The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.
2 On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
"ADDITIONAL COST RATE") for each Lender, in accordance with the paragraphs
set out below. The Mandatory Cost will be calculated by the Agent as a
weighted average of the Lenders' Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the relevant
Loan) and will be expressed as a percentage rate per annum.
3 The Additional Cost Rate for any Lender lending from a Facility Office in a
participating member state will be the percentage notified by the Lender to
the Agent. This percentage will be certified by that Lender in its notice
to the Agent to be its reasonable determination of the cost (expressed as a
percentage of that Lender's participation in all Loans made from that
Facility Office) of complying with the minimum reserve requirements of the
European Central Bank in respect of loans made from that Facility Office.
4 The Additional Cost Rate for any Lender lending from a Facility Office in
the United Kingdom will be calculated by the Agent as follows:
4.1 in relation to a sterling Loan:
AB+C(B-D)E x 0.01
----------------- per cent per annum
100-(A+C)
4.2 in relation to a Loan in any currency other than sterling:
E x 0.01
-------- per cent per annum
300
Where:
A is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Lender is from time to time
required to maintain as an interest free cash ratio deposit with the
Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Margin and the
Mandatory Cost and, if the Loan is an unpaid sum, the additional rate
138
of interest specified in clause 18.3) payable for the relevant
Interest Period on the Loan.
C is the percentage (if any) of Eligible Liabilities which that Lender
is required from time to time to maintain as interest bearing Special
Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England to the
Agent on interest bearing Special Deposits.
E is the rate of charge payable by that Lender to the Financial Services
Authority pursuant to the Fees Regulations (but, for this purpose,
ignoring any minimum fee required pursuant to the Fees Regulations)
and expressed in pounds per L1,000,000 of the Fee Base of that Lender.
5 For the purposes of this Schedule:
5.1 "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings given
to them from time to time under or pursuant to the Bank of England Act
1998 or (as may be appropriate) by the Bank of England.
5.2 "FEES REGULATIONS" means the Banking Supervision (Fees) Regulations in
force from time to time or such other law or regulation as may be in
force from time to time in respect of the payment of fees for banking
supervision; and
5.3 "FEE BASE" has the meaning given to it, and will be calculated in
accordance with, the Fees Regulations.
6 In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (ie 5 per cent will be included in the formula as 5
and not as 0.05). A negative result obtained by subtracting D from B shall
be taken as zero. The resulting figures shall be rounded to four decimal
places.
7 Each Lender shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but without
limitation, each Lender shall supply the following information in writing
on or prior to the date on which it becomes a Lender:
7.1 its jurisdiction of incorporation and the jurisdiction of its Facility
Office; and
7.2 any other information that the Agent may reasonably require for such
purpose.
Each Lender shall promptly notify the Agent in writing of any change to the
information provided by it pursuant to this paragraph.
139
8 The percentages or rates of charge of each Lender for the purpose of A, C
and E above shall be determined by the Agent based upon the information
supplied to it pursuant to paragraph 7 above and on the assumption that,
unless a Lender notifies the Agent to the contrary, each Lender's
obligations in relation to cash ratio deposits, Special Deposits and the
Fees Regulations are the same as those of a typical bank from its
jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.
9 The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any
Lender and shall be entitled to assume that the information provided by any
Lender pursuant to paragraphs 3 and 7 above is true and correct in all
respects.
10 The Agent shall distribute the additional amounts received as a result of
the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
for each Lender based on the information provided by each Lender pursuant
to paragraphs 3 and 7 above.
11 Any determination by the Agent pursuant to this Schedule is in relation to
a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Lender shall, in the absence of manifest error, be conclusive
and binding on all parties to this Agreement.
12 The Agent may from time to time, after consultation with Ideal and the
Lenders, determine and notify all parties any amendments which are required
to be made to this Schedule in order to comply with any change in law,
regulation or any requirements form time to time imposed by the Bank of
England, the Financial Services Authority or the European Central Bank (or,
in any case, any other authority which replaces al or any of its functions)
and any such determination shall, in the absence of manifest error, be
conclusive and binding on all parties.
140
SCHEDULE 6
FORM OF TRANSFER CERTIFICATE
To: Bank of America, National Association
Business Credit, Portfolio Management
5 Canada Square
London, E14 5AQ
as Agent for the Beneficiaries
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, supplemented,
novated or replaced, the "CREDIT AGREEMENT") dated 2 December 2002 and made
between (1) IDEAL HARDWARE LIMITED and BELL MICROPRODUCTS EUROPE EXPORT LIMITED
(as Original Borrowers), (2) BM EUROPE PARTNERS CV, (3) BELL MICROPRODUCTS
EUROPE B.V., (4) BANK OF AMERICA NATIONAL ASSOCIATION (as Arranger, Issuer,
Swingline Lender, Agent and Security Trustee) and (5) CERTAIN BANKS AND
FINANCIAL INSTITUTIONS (as Lenders). Terms defined in the Agreement have the
same meanings in this Transfer Certificate.
1 [Transferor] (the "LENDER") hereby confirms the accuracy of the summary of
its participation in the Agreement set out in the Schedule below and
requests [Transferee] (the "TRANSFEREE") to accept and procure the transfer
to the Transferee of such part of such participation specified in the
Schedule by counter-signing and delivering this Transfer Certificate to the
Agent at its address for the service of notices specified in the Agreement.
2 The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the
purposes of clause 28.4 of the Agreement so as to take effect in accordance
with the terms thereof on the business day following the date of receipt by
it of this Transfer Certificate or (if later) on [specify date of transfer]
subject only to the provisions of the Agreement.
3 The Transferee confirms that it has received from the Lender a copy of the
Agreement together with such other documents and information as it has
required in connection with this transaction and that it has not relied and
will not hereafter rely on the Lender to check or enquire on its behalf
into the adequacy, accuracy or completeness of any such documents or
information or the reasonableness of any representation, warranty,
statement, projection or assumption contained therein or into the legality,
validity, effectiveness, enforceability or admissibility in evidence of any
such documents or information and further agrees that it has not relied and
will not hereafter rely on the Lender to assess or keep under review on its
behalf the business/operations, financial condition, prospects,
creditworthiness, status or affairs of any Borrower or any other Obligor.
141
4 The Transferee hereby undertakes with the Lender and each of the other
parties to the Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
5 The Lender makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Finance Documents or any document
delivered pursuant thereto and assumes no responsibility for the financial
condition of any of the Obligors or any other party to the Finance
Documents or for the performance and observance by any of the Obligors or
any other such party of any of its obligations under any of the Finance
Documents or any document delivered pursuant thereto and any and all such
conditions and warranties, whether express or implied by law or otherwise,
are hereby excluded.
6 The Lender gives notice that nothing in this Transfer Certificate or in any
of the Finance Documents (or any document delivered pursuant thereto) shall
oblige the Lender (i) to accept a re-transfer from the Transferee of the
whole or any part of its rights and obligations under the Agreement
transferred pursuant to this Transfer Certificate or (ii) to support any
losses directly or indirectly sustained or incurred by the Transferee by
reason of the failure by any of the Obligors or any other party to the
Finance Documents (or any document delivered pursuant thereto) to perform
or comply with its obligations under any of the Finance Documents or any
such document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) and (ii) above.
7 The Transferee confirms that its Facility Office and address for notices
for the purposes of the Agreement are as set out in the Schedule.
8 The Transferee undertakes to pay to the Agent for its own account a
transfer fee of L2,000 as provided in clause 28.7.2 of the Agreement.
9 This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
142
THE SCHEDULE
COMMITMENT PORTION TRANSFERRED
LENDER'S PARTICIPATION IN LOANS REPAYMENT DATE PORTION TRANSFERRED
[Lender] [Transferee]
By: By:
------------------------------- --------------------------------------
Date: Date:
ADMINISTRATIVE DETAILS OF TRANSFEREE
Facility Office:
------------------------------------------
------------------------------------------
------------------------------------------
Contact Name:
------------------------------------------
Account for payments:
------------------------------------------
Telephone:
------------------------------------------
Fax:
------------------------------------------
143
SCHEDULE 7
THE DORMANT COMPANIES, THE CHARGING COMPANIES AND THE BABY BELLS
PART 1
THE DORMANT COMPANIES
COMPANY COMPANY NUMBER
- ------- --------------
Bell Microproducts Europe Limited 04026955
Logical Online Limited 03803158
Ideal Unisolve Limited 04002602
Bell Microproducts ApS N/A
PART 2
THE CHARGING COMPANIES
COMPANY COMPANY NUMBER
- ------- --------------
Ideal Hardware Limited 03969946
Bell Microproducts Europe Export Limited 03711148
Bell Microproducts Europe BV N/A
Bell Microproducts Limited 04079671
Unifund Limited 03942210
PART 3
THE BABY BELLS
COMPANY COMPANY NUMBER
- ------- --------------
Bell Microproducts BV 04041697
Bell Microproducts Sarl 43474497500013
144
Bell Microproducts GmbH HRB 40296
Bell Microproducts AB SE556597-7385
Bell Microproducts BVBA [0474128872]
Bell Microproducts S.r.l. 13456670150
145
SCHEDULE 8
FORM OF ACCESSION NOTICE
To: Bank of America, National Association
Business Credit, Portfolio Management
5 Canada Square
London, E14 5AQ
as Agent for the Beneficiaries
From: [Group Company] and [Ideal]
Dated:
Dear Sirs
CREDIT AGREEMENT DATED 2 DECEMBER 2002 AND MADE BETWEEN, AMONG OTHERS, IDEAL
HARDWARE LIMITED AND BELL MICROPRODUCTS EUROPE EXPORT LIMITED (AS ORIGINAL
BORROWERS), BANK OF AMERICA, NATIONAL ASSOCIATION AS (AGENT, ARRANGER, SWINGLINE
LENDER, ISSUER AND SECURITY TRUSTEE) AND THE LENDERS NAMED THEREIN (AS AMENDED
FROM TIME TO TIME, THE "CREDIT AGREEMENT").
1 [Group Company] agrees to become an [Additional Borrower] [Unsecured
Guarantor] and to be bound by the terms of the Credit Agreement as an
[Additional Borrower] [Unsecured Guarantor] pursuant to clause 3 of the
Credit Agreement. [Group Company] is a company duly incorporated under the
laws of [name of relevant jurisdiction].
2 [Group Company's] administrative details are as follows:
Address:
Fax No.:
Attention:
3 This letter is governed by English law.
[This Accession Notice is entered into as a deed.]
[Ideal] [relevant Group Company]
146
SCHEDULE 9
DOCUMENTS TO ACCOMPANY ACCESSION NOTICE OR SUPPLEMENTAL DEED
1 A copy, certified a true copy by a duly authorised officer of the proposed
[Additional Borrower] [Unsecured Guarantor] [Charging Company], of the
constitutive documents of such proposed [Additional Borrower] [Unsecured
Guarantor] [Charging Company].
2 A copy, certified a true copy by a duly authorised officer of the proposed
[Additional Borrower] [Unsecured Guarantor] [Charging Company], of a board
resolution of such proposed [Additional Borrower] [Unsecured Guarantor]
[Charging Company] approving the execution and delivery of a [Accession
Notice] [Supplemental Deed], the accession of such proposed [Additional
Borrower] [Unsecured Guarantor] [Charging Company] to [this Agreement] [the
Debenture] and the performance of its obligations under the Finance
Documents and authorising a person or persons (specified by name or office)
on behalf of such proposed [Additional Borrower] [Unsecured Guarantor]
[Charging Company] to execute and deliver such [Accession Notice]
[Supplemental Deed], any other Finance Document and any other documents to
be delivered by such proposed [Additional Borrower] [Unsecured Guarantor]
[Charging Company] pursuant hereto or thereto.
3 A certificate of a duly authorised officer of the proposed [Additional
Borrower] [Unsecured Guarantor] [Charging Company] setting out the names
and signatures of the person or persons mentioned in the resolution
referred to in paragraph 2 above.
4 A certificate addressed to the Agent signed by two authorised signatories
of the proposed [Additional Borrower] [Unsecured Guarantor] [Charging
Company] stating that the execution by such proposed [Additional Borrower]
[Unsecured Guarantor] [Charging Company] of the [Accession Notice]
[Supplemental Deed] and the performance of such proposed [Additional
Borrower] [Unsecured Guarantor] [Charging Company] of its obligations
hereunder and thereunder are within its corporate powers, have been duly
approved by all necessary corporate action and will not cause any limit or
restriction on any of its powers (whether imposed by law, decree, rule,
regulation, its constitutive documents or agreement or otherwise) or on the
right or ability of its directors to execute such powers, to be exceeded or
breached.
5 A copy of its latest audited financial statements.
6 Such legal opinion(s) of counsel to the Agent as the Agent may require, in
a form satisfactory to the Agent.
147
7 [In connection with the acquisition of any company where such company or
any of its Subsidiaries accedes as a Charging Company to the Debenture or
otherwise executes a Security Document (such person thus becoming an
"OBLIGOR"):
7.1 a certificate addressed to the Agent from the Auditors confirming in
the context of section 155(2) Companies Act 1985 that:
7.1.1 in their opinion such Obligor had positive net assets as defined
in section 154(2) Companies Act 1985;
7.1.2 they are not aware of anything to indicate that the decision of
the directors of such Obligor not to make a provision in relation
to the giving of financial assistance represented by the
execution of each such Security Document to which it is a party
has not been made on fair and reasonable grounds; and
7.1.3 the giving of such financial assistance by such Obligor would
not cause those net assets to be reduced,
7.2 in each such case dated as at the date of the giving of such financial
assistance;
7.3 a statutory declaration by all of the directors of such Obligor as
required by Section 155(6) Companies Act 1985 in relation to such
financial assistance, such statutory declaration to be in the
prescribed form and having attached thereto the report addressed by
the Auditors complying with the provisions of Section 156(4) Companies
Act 1985;
7.4 a copy, certified by a duly authorised officer of such Obligor as
being a true copy, of the resolution of its board of directors
approving the matters and things required to be done by it pursuant to
this paragraph 8 and in particular the giving of such financial
assistance.]*
8 Such other documents or evidence relating to such proposed [Additional
Borrower] [Unsecured Guarantor] [Charging Company] as the Agent may
reasonably require.
* This paragraph only applies where a company being acquired (or one or more
of its Subsidiaries) is acceding to the Debenture or otherwise executing a
Security Document to secure borrowings raised for its acquisition.
148
SCHEDULE 10
THE MATERIAL CONTRACTS
DESCRIPTION OF AGREEMENT DATE PARTIES
------------------------ ---- -------
Microsoft EMEA Distribution Agreement 1 July 2002 (1) Ideal
(2) Microsoft Ireland
Operations Limited
Microsoft OEM Distribution Agreement 1 October 2001 (1) Ideal
(2) Microsoft Licensing Inc
Compaq Direct Business 1 March 1999 (1) Ideal
Partner Agreement with
respective Compaq (2) Compaq Computer
Commercial Terms Limited
Addendum for Distributors
Europe Authorized Distributor 1 January 2002 (1) Ideal
Agreement
(2) Seagate Removable
Storage Solutions LLC
Specialist Distributor Agreement [ ] (1) Ideal
(2) Fujitsu Siemens
Computers Ltd
Master Distribution Agreement 25 May 2000 (1) Ideal
(2) International Business
Machines Corporation
International Distribution Agreement 3 March 2000 (1) Ideal
(2)Network Associates
International B.V.
149
THE ORIGINAL BORROWERS
SIGNED for and on behalf of )
IDEAL HARDWARE LIMITED )
by: )
Address: Fountain Court
Cox Lane
Chessington
Surrey KT9 1SJ
Fax: 020 8286 5588
Attention: Nick Lee/Helen Hancock
SIGNED for and on behalf of )
BELL MICROPRODUCTS EUROPE )
EXPORT LIMITED by: )
Address: Fountain Court
Cox Lane
Chessington
Surrey KT9 1SJ
Fax: 020 8286 5588
Attention: Nick Lee/Helen Hancock
THE DUTCH OBLIGORS
SIGNED by its Managing Partner )
for and on behalf of )
BM EUROPE PARTNERS C.V. )
Address: c/o Fountain Court
Cox Lane
Chessington
Surrey KT9 1SJ
Fax: 020 8286 5588
150
Attention: Nick Lee/Helen Hancock
SIGNED for and on behalf of )
BELL MICROPRODUCTS )
EUROPE BV )
by: )
Address: c/o Fountain Court
Cox Lane
Chessington
Surrey KT9 1SJ
Fax: 020 8286 5588
Attention: Nick Lee/Helen Hancock
THE AGENT
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
THE ARRANGER
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
151
THE SECURITY TRUSTEE
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
THE SWINGLINE LENDER
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
THE ISSUER
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
152
THE LENDERS
SIGNED for and on behalf of )
BANK OF AMERICA, NATIONAL )
ASSOCIATION by: )
Address: 5 Canada Square
London, E14 5AQ
Fax: 020 7174 6400
Attention: Business Credit, Portfolio Management
153