UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from ____________ to ___________
Commission file number 1-6805
BROWNING-FERRIS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1673682
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
757 N. Eldridge
Houston, Texas 77079
(Address of principal (Zip Code)
Executive offices)
Registrant's telephone number, including area code: (713) 870-8100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X . No .
--- ---
Indicate the number of shares outstanding of the issuer's common stock, as of
February 10, 1995: 197,411,179.
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(In Thousands Except for Per Share Amounts)
---------------------------------------------------------------------
Three Months Ended
December 31,
---------------------------
1994 1993
----------------------------------------------------------------------
Revenues $1,292,787 $ 928,292
Cost of operations 924,970 676,290
---------- ----------
Gross profit 367,817 252,002
Selling, general and
administrative expense 190,506 144,375
---------- ----------
Income from operations 177,311 107,627
Interest, net 26,432 15,523
Equity in earnings of
unconsolidated affiliates (11,646) (6,214)
---------- ----------
Income before income taxes and
minority interest 162,525 98,318
Income taxes 65,010 39,327
Minority interest in
income of consolidated
subsidiaries 7,945 --
---------- ----------
Net income $ 89,570 $ 58,991
========== ==========
Number of common and common
equivalent shares used
in computing earnings
per share 197,809 174,733
======= =======
Earnings per common and
common equivalent share $ .45 $ .34
======= =======
Cash dividends per
common share $ .17 $ .17
======= =======
The accompanying notes are an integral part of these financial statements.
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
(In Thousands)
- ------------------------------------------------------------------------
December 31, September 30,
1994 1994
(Unaudited)
- ------------------------------------------------------------------------
CURRENT ASSETS:
Cash $ 87,347 $ 79,131
Short-term investments 75,343 61,993
Receivables -
Trade, net of allowances for doubtful
accounts of $39,730 and $33,284 840,568 752,686
Other 57,763 60,934
Inventories 51,265 32,811
Deferred income taxes 112,443 114,925
Prepayments and other 112,237 83,613
---------- ----------
Total current assets 1,336,966 1,186,093
---------- ----------
PROPERTY AND EQUIPMENT, at cost, less
accumulated depreciation and amortization
of $2,148,714 and $2,046,604 3,346,362 3,049,767
---------- ----------
OTHER ASSETS:
Cost over fair value of net tangible
assets of acquired businesses,
net of accumulated amortization of
$77,504 and $62,527 1,520,848 954,378
Other intangible assets, net of
accumulated amortization of $155,291
and $156,080 112,341 113,059
Deferred income taxes 111,271 97,998
Investments in unconsolidated affiliates 351,167 292,579
Other 101,308 103,081
---------- ----------
Total other assets 2,196,935 1,561,095
---------- ----------
Total assets $6,880,263 $5,796,955
========== ==========
The accompanying notes are an integral part of these financial statements.
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
(In Thousands Except for Share Amounts)
- ----------------------------------------------------------------------
December 31, September 30,
1994 1994
(Unaudited)
- ----------------------------------------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 47,747 $ 49,841
Accounts payable 413,656 400,177
Accrued liabilities -
Salaries and wages 85,394 101,530
Taxes, other than income 42,646 44,129
Other 455,394 373,978
Income taxes 68,259 53,642
Deferred revenues 156,907 155,692
---------- ----------
Total current liabilities 1,270,003 1,178,989
---------- ----------
DEFERRED ITEMS:
Accrued environmental and
landfill costs 566,171 529,501
Deferred income taxes 81,733 78,678
Other 242,342 159,478
---------- ----------
Total deferred items 890,246 767,657
---------- ----------
LONG-TERM DEBT, net of current portion 1,521,554 713,680
---------- ----------
CONVERTIBLE SUBORDINATED DEBENTURES 744,949 744,949
---------- ----------
COMMON STOCKHOLDERS' EQUITY:
Common stock, $.16 2/3 par; 400,000,000
shares authorized; 197,971,696 and
197,084,755 shares issued 33,002 32,854
Additional paid-in capital 1,367,161 1,351,919
Retained earnings 1,056,143 1,009,132
Treasury stock, 763,936 and 743,497
shares, at cost (2,795) (2,225)
---------- ----------
Total common stockholders' equity 2,453,511 2,391,680
---------- ----------
Total liabilities and common
stockholders' equity $6,880,263 $5,796,955
========== ==========
The accompanying notes are an integral part of these financial statements.
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In Thousands)
- -----------------------------------------------------------------------
Three Months Ended
December 31,
-------------------
1994 1993
- -----------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 89,570 $ 58,991
--------- ---------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 126,901 98,539
Deferred income tax expense 6,596 2,929
Amortization of deferred investment tax credit (176) (177)
Provision for losses on accounts receivable 6,852 4,689
Gains on sales of fixed assets (1,801) (1,481)
Equity in earnings of unconsolidated
affiliates, net of dividends received (11,646) (6,214)
Increase (decrease) in cash from changes in
assets and liabilities excluding effects
of acquisitions:
Trade receivables (11,165) (15,094)
Inventories (5,995) (1,295)
Other assets 7,269 (2,634)
Other liabilities (21,499) 2,942
--------- ---------
Total adjustments 95,336 82,204
--------- ---------
Net cash provided by operating activities 184,906 141,195
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (199,128) (156,386)
Payments for businesses acquired (597,593) (29,855)
Investments in unconsolidated affiliates (5,765) (2,848)
Proceeds from disposition of assets 44,045 4,207
Purchases of short-term investments (13,909) --
Sales of short-term investments 102,391 145,842
Receipts from unconsolidated affiliates 12,965 4,300
--------- ---------
Net cash used in investing activities (656,994) (34,740)
--------- --------
(Continued on Following Page)
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
(Unaudited)
(In Thousands)
- ---------------------------------------------------------------------
Three Months Ended
December 31,
-------------------
1994 1993
- -----------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuances of stock 3,625 1,970
Proceeds from issuance of indebtedness 575,795 20,845
Repayments of indebtedness (66,028) (74,301)
Dividends paid (33,362) (29,488)
--------- ---------
Net cash provided by (used in) financing
activities 480,030 (80,974)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES 274 (393)
--------- ---------
NET INCREASE IN CASH 8,216 25,088
CASH AT BEGINNING OF PERIOD 79,131 22,871
--------- ---------
CASH AT END OF PERIOD $ 87,347 $ 47,959
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH PAID FOR:
Interest, net of capitalized amounts $ 18,914 $ 10,365
Income taxes $ 48,832 $ 28,830
The accompanying notes are an integral part of these financial statements.
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation -
The accompanying unaudited financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the
opinion of management, all adjustments and disclosures necessary to a
fair presentation of these financial statements have been included.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1994, as
filed with the Securities and Exchange Commission.
Certain reclassifications have been made in prior year financial
statements to conform to the current year presentation.
(2) Earnings Per Common Share -
The following table reconciles the number of common shares
outstanding with the number of common and common equivalent shares
used in computing primary earnings per share (in thousands):
Three Months Ended
December 31,
--------------------
1994 1993
------- -------
Common shares outstanding, end of period 197,208 174,402
Effect of using weighted average common
and common equivalent shares outstanding (485) (350)
Effect of shares issuable under stock option
plans based on the treasury stock method 1,086 681
------- -------
Shares used in computing earnings per share 197,809 174,733
======= =======
Conversion of the 6 3/4% Convertible Subordinated Debentures due
2005, which were determined not to be common stock equivalents, was
not assumed in the computation of fully diluted earnings per share
because the debentures had an anti-dilutive effect.
Earnings per common and common equivalent share were computed by
dividing net income by the weighted average number of shares of
common stock and common stock equivalents outstanding during each
period. Common share equivalents include stock options and the
Company's 6 1/4% Convertible Subordinated Debentures due 2012. The
effect of these debentures on earnings per share was not significant
or was not dilutive for each of the periods presented and,
accordingly, has not been included in the computations.
(3) Business Combinations -
On December 2, 1994, the Company acquired majority control of
Attwoods plc ("Attwoods"), which is a provider of waste services
operating principally in the United States, the United Kingdom, the
Caribbean and mainland Europe (primarily Germany) and also has
mineral extraction operations in the United Kingdom. The Company
increased its ownership from 56.6% of the outstanding ordinary shares
(including ordinary shares represented by American Depositary Shares)
and 80.8% of the convertible preference shares of Attwoods (Finance)
N.V., a finance subsidiary of Attwoods, at December 2, 1994 to 94.4%
of the outstanding ordinary shares and 83.2% of the convertible
preference shares as of December 31, 1994. The Company has initiated
procedures to acquire the remaining ordinary shares and redeem the
convertible preference shares which it does not own during the second
quarter of fiscal 1995. As of December 31, 1994, the Company had
paid approximately $543 million (in pounds sterling except where
requested to pay U.S. dollars by individual shareholders) to acquire
the ordinary and convertible preference shares of Attwoods as
discussed above. In connection with the acquisition, the Company
will receive $56.8 million, plus 20% of any proceeds in excess of
such amount, arising from the sale of the portable sanitation and
accommodation business of Attwoods in continental Europe, primarily
Germany. The acquisition has been accounted for as a purchase.
In addition to the Attwoods transaction, during the current
fiscal year, the Company paid approximately $62.9 million (including
liabilities assumed and additional amounts payable to former owners
of $54.7 million and 142,920 shares of the Company's common stock
valued at $4.2 million) to acquire 21 solid waste businesses, which
were accounted for as purchases, including the acquisition of the
remaining 50% ownership interest outstanding of Servizi Industriali
S.r.l., its 50% owned joint venture in Italy. The Company also
exchanged 397,221 shares of its common stock and assumed liabilities
and equity of $5.6 million in connection with one business
combination which met the criteria to be accounted for as a
pooling-of-interests. As the effect of this business combination was not
significant, prior period financial statements were not restated.
In February 1994, the Company acquired 50% of the share capital
of Otto Waste Services, a company engaged in the solid waste services
business in Germany, which has been accounted for as a purchase. The
Company paid approximately $400 million, consisting of 3,928,075
shares of the Company's common stock valued at $117.4 million and the
remainder in deutsche mark, for its interest in Otto Waste Services.
In addition, during the prior fiscal year, the Company paid
approximately $179.5 million (including liabilities assumed and
additional amounts payable to former owners of $31.4 million and
752,049 shares of the Company's common stock valued at $21.4
million) to acquire 111 solid waste businesses, which were accounted
for as purchases, in addition to the Otto Waste Services transaction
discussed above. The Company also exchanged 1,027,721 shares of
its common stock and assumed liabilities and equity of $7.0 million
in connection with four business combinations which met the criteria
to be accounted for as poolings-of-interests. As the aggregate effect
of these four business combinations was not significant, prior period
financial statements were not restated.
The results of all businesses acquired in fiscal years 1995 and
1994 have been included in the consolidated financial statements from
the dates of acquisition. In allocating purchase price, the assets
acquired and liabilities assumed in connection with Attwoods, Otto
Waste Services and many of the Company's other acquisitions have been
initially assigned and recorded based on preliminary estimates of
fair value and may be revised as additional information becomes
available. As a result, the financial information included in the
Company's consolidated financial statements and in the pro forma
information listed below is subject to adjustment prospectively as
subsequent revisions in estimates of fair value, if any, are
necessary.
The Company's consolidated results of operations on an unaudited
pro forma basis, as though the businesses acquired during fiscal
years 1995 and 1994 had been acquired on October 1, 1993, are as
follows (in thousands, except per share amounts):
Three Months Ended
December 31,
---------------------------
1994 1993
(Unaudited) (Unaudited)
----------- -----------
Pro forma revenues $1,397,744 $1,222,502
Pro forma net income $ 88,308 $ 61,562
Pro forma earnings per common
and common equivalent share $ .45 $ .33
These pro forma results are presented for informational purposes
only and do not purport to show the actual results which would have
occurred had the business combinations been consummated on October 1,
1993, nor should they be viewed as indicative of future results of
operations.
(4) Long-Term Debt -
Long-term debt at December 31, 1994, and September 30, 1994, was
as follows (in thousands):
December 31, September 30,
1994 1994
------------ -------------
Senior indebtedness:
9 1/4% Debentures $ 100,000 $ 100,000
Solid waste revenue bond obligations 114,043 114,031
Other notes payable 415,547 366,145
---------- ---------
629,590 580,176
---------- ---------
Commercial paper and short-term
facilities to be refinanced:
Multicurrency Revolving Credit
Agreement 550,000 --
Other 389,711 183,345
---------- ---------
939,711 183,345
---------- ---------
Total long-term debt 1,569,301 763,521
Less current portion 47,747 49,841
---------- ---------
Long-term debt, net of current portion $1,521,554 $ 713,680
========== =========
In connection with the acquisition of Attwoods in December 1994,
the Company and three of its subsidiaries entered into a
Multicurrency Revolving Credit Agreement for a total facility
equivalent to 500 million pounds sterling (approximately $782.5
million at December 31, 1994). The facility can be used to fund the
acquisition of Attwoods, reduce existing indebtedness of Attwoods or
for other general corporate purposes. The facility, which matures
December 31, 1997, can be utilized to borrow U.S. dollars, pounds
sterling or deutsche mark as determined by the Company. At the
option of the Company, the loans bear a rate of interest, generally
for periods of six months or less, based on the prime rate or the
London Interbank Offered Rate ("LIBOR"), a certificate of deposit
rate or the federal funds rate, plus a margin. The Multicurrency
Revolving Credit Agreement with Credit Suisse, as administrative
agent for a group of U.S. and international banks, requires a
facility fee based upon the credit rating of the Company. The
agreement contains a net worth requirement of $1.5 billion which
increases annually after September 30, 1995 by 25% of the
consolidated net income of the preceding year and excludes the effect
of any foreign currency translations on net worth. At December 31,
1994, the Company had borrowed $550 million in U.S. dollars at an
average interest rate of approximately 6.5%. At December 31, 1994,
distributions from retained earnings could not exceed $1.0 billion
under this net worth maintenance requirement (the covenant of the
Company's debt agreements which is most restrictive regarding
dividends).
(5) Commitments and Contingencies -
Legal Proceedings.
Since early November 1990, several lawsuits were filed in the
United States District Court for the Southern District of Texas.
These suits, seeking unquantified damages and attorneys' and other
fees, were class actions on behalf of those persons who purchased the
Company's common stock during specified periods beginning August 9,
1990 through September 3, 1991. The suits generally alleged that the
Company violated the Securities Exchange Act of 1934 by allegedly
preparing, issuing and disseminating materially false and misleading
information to plaintiffs and the investing public. Two classes
(August 9, 1990 to November 5, 1990 and November 6, 1990 to September
3, 1991) were certified by the trial court. In a series of orders
issued by the trial court in December 1994 and January 1995, summary
judgment was granted in favor of the Company and all other
defendants. A final judgment is expected to be entered soon and the
plaintiffs will have the right to appeal the final judgment.
The Company and certain subsidiaries are involved in various
other administrative matters or litigation, including personal injury
and other civil actions, as well as other claims and disputes that
could result in additional litigation or other adversary proceedings.
While the final resolution of any matter may have an impact on
the Company's consolidated financial results for a particular
quarterly or annual reporting period, management believes that the
ultimate disposition of these matters will not have a materially
adverse effect upon the consolidated financial position of the
Company.
Environmental Proceedings.
California judicial and regulatory authorities suspended the
Company's ability to accept decomposable household waste at certain
portions of its Azusa, California landfill in January 1991. The
Company has continued to use the facility for the disposal of
primarily inert waste. Since January 1991, the Company has sought
and received the ability to dispose of certain additional non-municipal
solid waste streams at the facility. The ultimate realization of the
Company's investment of approximately $100 million is dependent upon
continued disposal of current and future acceptable waste streams
while continuing to pursue all possible alternative uses of the property
to maximize its value.
The Company and certain subsidiaries are involved in various
other environmental matters or proceedings, including original or
renewal permit application proceedings in connection with the
establishment, operation, expansion, closure and post-closure
activities of certain landfill disposal facilities, and proceedings
relating to governmental actions resulting from the involvement of
various subsidiaries of the Company with certain waste sites
(including Superfund sites), as well as other matters or claims that
could result in additional environmental proceedings.
While the final resolution of any matter may have an impact on
the Company's consolidated financial results for a particular
quarterly or annual reporting period, management believes that the
ultimate disposition of these matters will not have a materially
adverse effect upon the consolidated financial position of the
Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Net income for the first three months of fiscal year 1995 was
$89.6 million, an increase of $30.6 million (51.8%) from the $59
million reported for the first quarter of last year. This
improvement was driven by increased profitability in the Company's
North American recycling and landfill operations and its
international operations. Higher commodity prices and, to a somewhat
lesser extent, volume growth were responsible for improved earnings
in the recycling business. Increased volumes combined with higher
weighted average per unit pricing resulted in increased profits in
the landfill business. International earnings were higher than the
first quarter of last year principally as a result of Otto Waste
Services acquired in February 1994, and due to increased earnings
from the Netherlands operations. Higher profitability was also
attributable, to a lesser extent, to increased profits in the North
American collection and other business operations. Further, the
Company's continued ability to control the growth in selling, general
and administrative expenses while increasing revenues at a
significantly faster pace also contributed to the increase in net
income, as did increased equity in earnings of the Company's
unconsolidated affiliates.
On December 2, 1994, the Company acquired majority control of
Attwoods plc ("Attwoods"), which is a provider of waste services
operating principally in the United States, the United Kingdom, the
Caribbean and mainland Europe (primarily Germany) and also has
mineral extraction operations in the United Kingdom. The Company
increased its ownership from 56.6% of the outstanding ordinary shares
(including ordinary shares represented by American Depositary Shares)
and 80.8% of the convertible preference shares of Attwoods (Finance)
N.V., a finance subsidiary of Attwoods, at December 2, 1994 to 94.4%
of the outstanding ordinary shares and 83.2% of the convertible
preference shares as of December 31, 1994. The Company has initiated
procedures to acquire the ordinary shares and redeem the convertible
preference shares which it does not own. As of December 31, 1994,
the Company had paid approximately $543 million (in pounds sterling
except where requested to pay U.S. dollars by individual
shareholders) to acquire the ordinary and convertible preference
shares of Attwoods as discussed above. In connection with the
acquisition, the Company will receive $56.8 million, plus 20% of any
proceeds in excess of such amount, arising from the sale of the
portable sanitation and accommodation business of Attwoods in
continental Europe, primarily Germany. Consolidated operating
results for the first quarter include the Company's 77% weighted
average ownership of the December 1994 results of operations of
Attwoods. Under purchase accounting, the assets acquired and
liabilities assumed in connection with this acquisition have been
assigned and recorded based on preliminary estimates of fair value
and may be revised as additional information concerning the valuation
of such assets and liabilities becomes available. Currently reported
information is, therefore, subject to adjustment prospectively as
subsequent revisions in estimates of fair value, if any, are
necessary.
The following table presents ratios (shown as a percentage of
revenues) which reflect certain profitability trends of the Company's
operations and shows the Company's ratios of earnings to fixed
charges.
Three Months Ended
------------------- Year Ended
12/31/94 12/31/93(1) 9/30/94
-------- -------- ----------
Gross profit margin 28.5% 27.1% 27.6%
Income from operations 13.7% 11.6% 12.6%
Income before income taxes, minority
interest and extraordinary item 12.6% 10.6% 11.6%
Income before extraordinary item 6.9% 6.4% 6.6%
Net income 6.9% 6.4% 6.5%
Ratio of earnings to fixed charges 4.44 4.01 4.25
- -----------
(1) Certain reclassifications have been made in prior year
amounts to conform to the current year presentation.
The three months ended December 31, 1994, reflected improvements
in all the profitability margins presented above. Improved profit
margins are attributable principally to the higher gross profit
margins experienced in the recycling, landfill and international
businesses as well as the Company's ability to control the growth in
selling, general and administrative costs while achieving
significantly greater revenue growth. Operating profit margins in
the international business area have been favorably affected by the
acquisition of Otto Waste Services in February 1994 and improved
results in the Netherlands. Operating profit margins improved in the
disposal and transfer services business in the current year,
principally as a result of increases in both municipal solid waste
and special waste volumes disposed. Improved commodity pricing,
increased volumes and growth from acquisitions contributed to the
improved profitability margins experienced in recycling services.
Increased volumes in the Company's North American business, and to
some extent, increased pricing are generally reflective of
improvement in economic conditions in many of the markets where the
Company conducts it operations. The domestic collection services
business operating margins were almost flat with the first quarter of
last year. In an effort to improve collection service margins, the
Company has selectively increased prices throughout its commercial
collection customer base on an ongoing basis since October 1993, and
indications are that most of the increases implemented to date have
been accepted by the customers. The Company plans to continue to
selectively increase collection services' prices throughout the
fiscal year. The Company has also initiated minimum pricing levels
on new business. In addition, during the prior year the Company
concluded an extensive study which identified opportunities for
profit improvement of the Company. The Company has begun to
implement a number of these profit improvement initiatives which will
likely span the next two to three years.
Revenues -
Revenues for the three months ended December 31, 1994, were $1.3
billion, a 39.3% increase over the same period last year. The
following table reflects total revenues of the Company by each of the
principal lines of business (dollar amounts in thousands):
Three Months Ended
----------------------- %
12/31/94 12/31/93(1) Change
---------- ----------- --------
North American Operations -
Collection Services - Solid Waste $ 648,380 $ 570,397 13.7%
Disposal and Transfer - Solid Waste
Unaffiliated customers 138,796 110,924 25.1%
Affiliated companies 112,486 86,622 29.9%
---------- ----------
251,282 197,546 27.2%
Medical Waste Services 43,451 39,169 10.9%
Recycling Services 125,536 70,746 77.4%
Services Group and Other 18,094 17,387 4.1%
Elimination of affiliated
companies' revenues (112,486) (86,622) 29.9%
---------- ----------
Total North American Operations 974,257 808,623 20.5%
International Operations (2) 318,530 119,669 166.2%
---------- ----------
Total Company $1,292,787 $ 928,292 39.3%
========== ==========
- ------------
(1) Certain reclassifications have been made in prior year
amounts to conform to the current year presentation.
(2) Revenues from Canadian operations are excluded from inter-
national revenues and are combined with North American
revenues.
As the table below reflects, revenue growth for the three
months ended December 31, 1994 was due largely to acquisitions,
although volume and price increases accounted for a higher percentage
of the growth than has been experienced recently.
Changes in Revenue for
Three Months Ended
December 31,
-----------------------
1994 1993
---------- ----------
Price 5% (1)%
Volume (1) 9 4
Acquisitions 25 7
---- ----
Total Percentage Increase 39% 10%
==== ====
(1) Includes the impact of foreign currency exchange rates.
As shown above, international operations' revenues increased
166.2% and accounted for approximately 55% of the Company's growth in
revenues for the three months ended December 31, 1994, compared with
the same period of the prior year. The acquisition of the 50%
interest in Otto Waste Services in February 1994 and Attwoods in
December 1994 accounted for over 80% of the increase in
international's revenues. Otto Waste Services' revenues were $157
million for the three months ended December 31, 1994. North American
revenues grew 20.5% for the three months ended December 31, 1994,
compared with the first three months of the prior year. All business
lines experienced revenue growth over the prior year in North
America. The disposal and transfer services' revenues from
unaffiliated customers were above the prior year primarily due to
increased volumes and higher weighted average per unit pricing.
Prices for municipal solid waste ("MSW") disposal are improving at a
number of the Company's landfills, particularly in the midwestern and
southern regions of the U.S. Despite the softening of special waste
pricing in many markets, growth in special waste volumes, which
demands a higher price than MSW, is at a faster pace than MSW, which
is favorably affecting weighted average per unit landfill disposal
prices. The collection services business revenues increased 13.7% for
the first three months of fiscal 1995 compared with the first three
months of the prior year which accounted for approximately 21% of the
Company's total revenue growth. Acquisitions consummated since
December 31, 1993 and increased volumes in the Company's existing
business accounted for over 90% of the revenue increase in the
collection services business. Recycling revenues increased 77.4%
over the same period of the prior year primarily due to increased
commodity prices and, to a lesser extent, increased volumes and
acquisitions. Paper currently represents over 80% of the volume
processed by recycling services and pricing for paper has been very
strong. The Company's outlook for the next six months is that paper
prices will continue within the range of prices experienced during
the past six months. It is the Company's goal to secure long-term
contracts with quality paper producers, which guarantee floor prices
in exchange for guaranteed volumes, for the majority of its volumes
by the end of 1995. Medical waste revenues increased 10.9% due to
increased volumes and acquisitions offset partially by lower pricing
resulting from a competitive marketplace.
Cost of Operations -
Cost of operations increased $249 million or 36.8% for the first
three months of fiscal 1995, compared with the same period of the
prior year. Over 55% of the this increase in cost of operations is
directly attributable to the acquisitions of Otto Waste Services in
February 1994 and Attwoods in December 1994. Disposal costs, which
is the single largest component of cost of operations and includes
landfill and transfer station operating costs, increased 10% in North
America due to acquisitions (excluding Attwoods) and increased
volumes. Other operating costs increased approximately 14% in North
America, excluding Attwoods. The increase in these operating costs
in North America is attributable to acquisitions and to increased
volumes, primarily in the collection and recycling services business
areas.
Selling, General and Administrative Expense (SG&A) -
SG&A expense was $191 million for the first three months of
fiscal 1995, an increase of 32.0% over the first quarter of last
year. SG&A expense as a percent of revenues declined from 15.5% of
revenues for the three months ended December 31, 1993, to 14.8% of
revenues for the three months ended December 31, 1994, as a result of
the Company's cost control efforts. The $46 million increase in SG&A
was primarily related to the Company's acquisition activities, a
substantial portion of which was related to the acquisition of Otto
Waste Services in February 1994 and Attwoods in December 1994.
Net Interest Expense -
Net interest expense increased $11 million or 70.3% for the
first three months of fiscal 1995 compared with the same period of
the prior year, principally as a result of the acquisition and
consolidation of Otto Waste Services in February 1994 and Attwoods in
December 1994.
Equity in Earnings of Unconsolidated Affiliates -
Equity in earnings of unconsolidated affiliates increased $5.4
million due principally to improvement in the earnings of American
Ref-Fuel and certain international affiliates and as a result of the
Company's acquisition of a 50% interest in Otto Waste Services in
February 1994.
Minority Interest in Income of Consolidated Subsidiaries -
The increase in minority interest in income of consolidated
subsidiaries is the result of the Company's acquisition of a 50%
interest in Otto Waste Services in February 1994.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's working capital of $7.1 million at September 30,
1994, increased to $67.0 million at December 31, 1994. Over the long
term, it continues to be the Company's desire to maintain substantial
available commitments under bank credit agreements or other financial
agreements to finance short-term capital requirements in excess of
internally generated cash while minimizing working capital.
In July 1994, the Company closed a $100 million master equipment
leasing program. A portion of the commitments under this program was
drawn at closing and the proceeds were used to repay indebtedness and
for working capital purposes. The balance of the commitments will be
drawn on or before March 31, 1995.
In connection with the acquisition of Attwoods in December 1994,
the Company and three of its subsidiaries entered into a
Multicurrency Revolving Credit Agreement for a total facility
equivalent to 500 million pounds sterling (approximately $782.5
million at December 31, 1994). As of December 31, 1994, the Company
had borrowed $550 million in U.S. dollars under this agreement
associated with the acquisition of Attwoods. See Notes (3) and (4)
of Notes to Consolidated Financial Statements.
Long-term indebtedness (including $409 million of Otto Waste
Services debt, which has not been guaranteed by the Company, and $745
million of Convertible Subordinated Debentures) as a percentage of
total capitalization increased from 38% at September 30, 1994 to 48%
at December 31, 1994, principally as a result of the acquisition of
Attwoods.
The capital appropriations budget for fiscal year 1995,
excluding Attwoods, was established at $1.2 billion, in anticipation
of attractive business acquisition and development opportunities to
provide new assets to support planned revenue growth within all
consolidated businesses and to provide for normal replacement capital
needs in the Company's core business. The Company believes that its
cash flows from operations and its access to cash from banks and
other external sources, including the public markets, are more than
sufficient for its financing needs.
Except as disclosed herein, there have been no material changes
in the Company's financial condition from that reported at September
30, 1994.
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in its Annual Report on Form 10-K for the year
ended September 30, 1994, and other filings, several class action suits
alleging violations of Section 10(b) and Section 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder had been consolidated
into a lawsuit styled In Re Browning-Ferris Industries, Inc. Securities
Litigation. In December 1994 and in January 1995, the United States
District Court for the Southern District of Texas issued a series of
orders granting summary judgment in favor of the Company and all other
defendants. A final judgment is expected to be entered soon and the
defendants will have the right to appeal the final judgment.
On May 12, 1994, Atlantic Recovery & Transfer, Inc. ("Atlantic"), a
subsidiary of Attwoods plc, was assessed a penalty in the amount of
$126,000 by the New Jersey Department of Environmental Protection and
Energy ("NJDEPE") for operating a transfer station with an expired
permit and for violating capacity limitations. Atlantic believes it has
meritorious defenses to the alleged violations and, in accordance with
New Jersey law, has requested a hearing with the NJDEPE to seek
elimination or reduction of the penalty. Attwoods plc was acquired by
the Company in December 1994 as set forth in Note (3) of Notes to
Consolidated Financial Statements.
In addition to the above-described litigation, the Company and
certain subsidiaries are involved in various other administrative
matters or litigation, including original or renewal permit application
proceedings in connection with the establishment, operation,
expansion, closure and post-closure activities of certain landfill
disposal facilities, environmental proceedings relating to governmental
actions resulting from the involvement of various subsidiaries of the
Company with certain waste sites (including Superfund sites), personal
injury and other civil actions, as well as other claims and disputes
that could result in additional litigation or other adversary
proceedings.
While the final resolution of any such litigation or such other matters
may have an impact on the Company's consolidated financial results for a
particular quarterly or annual reporting period, management believes
that the ultimate disposition of such litigation or such other matters
will not have a materially adverse effect upon the consolidated
financial position of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10. 500,000,000 pounds Multicurrency Revolving Credit Agreement,
dated December 5, 1994, between BFI Acquisitions plc, BFI
International, Inc., Browning-Ferris Industries Europe, Inc.,
the Company and Credit Suisse and the Banks specified therein.
12. Computation of Ratio of Earnings to Fixed Charges of
Browning-Ferris Industries, Inc. and Subsidiaries.
27. Financial Data Schedule.
(b) Reports on Form 8-K: None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
BROWNING-FERRIS INDUSTRIES, INC.
(Company)
Date: February 14, 1995 /s/ David R. Hopkins
------------------------------
David R. Hopkins
Vice President, Controller and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the Company's consolidated financial statements for the quarter
ended December 31, 1994 and is qualified in its entirety by reference
to such financial statements. (In thousands except per share data.)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 162,690
<SECURITIES> 0
<RECEIVABLES> 938,061
<ALLOWANCES> (39,730)
<INVENTORY> 51,265
<CURRENT-ASSETS> 1,336,966
<PP&E> 5,495,076
<DEPRECIATION> (2,148,714)
<TOTAL-ASSETS> 6,880,263
<CURRENT-LIABILITIES> 1,270,003
<BONDS> 2,266,503
<COMMON> 33,002
0
0
<OTHER-SE> 2,420,509
<TOTAL-LIABILITY-AND-EQUITY> 6,880,263
<SALES> 0
<TOTAL-REVENUES> 1,292,787
<CGS> 0
<TOTAL-COSTS> 924,970
<OTHER-EXPENSES> 183,654
<LOSS-PROVISION> 6,852
<INTEREST-EXPENSE> 26,432
<INCOME-PRETAX> 162,525
<INCOME-TAX> 65,010
<INCOME-CONTINUING> 89,570
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,570
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
CONFORMED COPY
Dated December 5, 1994
BFI ACQUISITIONS PLC
BFI INTERNATIONAL, INC.
BROWNING-FERRIS INDUSTRIES EUROPE, INC.
as Borrowers
BROWNING-FERRIS INDUSTRIES, INC.
as Borrower and Guarantor
THE BANKS SPECIFIED HEREIN
as Banks
CREDIT SUISSE
as Administrative Agent
CREDIT SUISSE
as Arranger
500,000,000 pounds
MULTICURRENCY REVOLVING CREDIT AGREEMENT
LINKLATERS & PAINES,
885 Third Avenue,
Suite 2600,
New York, NY 10022.
Tel: (212) 751 1000
C O N T E N T S
Clause Heading Page
1 Interpretation ... ... ... ... ... ... ... ... 1
2 The Facility ... ... ... ... ... ... ... ... ... 1
3 Conditions Precedent ... ... ... ... ... ... ... 15
4 Drawdown of Advances ... ... ... ... ... ... ... 15
5 Repayment ... ... ... ... ... ... ... ... .. 16
6 Interest on Advances ... ... ... ... ... ... ... 17
7 Multicurrency Option ... ... ... ... ... ... ... 19
8 Prepayment ... ... ... ... ... ... ... ... ... 20
9 Cancellation ... ... ... ... ... ... ... ... ... 21
10 Fees ... ... ... ... ... ... ... ... ... ... ... 22
11 Taxes... ... ... ... ... ... ... ... ... ... ... 22
12 Illegality ... ... ... ... ... ... ... ... ... 25
13 Increased Costs ... ... ... ... ... ... ... ... 26
14 Change in Market Conditions ... ... ... ... ... 28
15 Mitigation ... ... ... ... ... ... ... ... ... 29
16 Guarantee and Indemnity ... ... ... ... ... ... 30
17 Payments ... ... ... ... ... ... ... ... ... ... 32
18 Warranties ... ... ... ... ... ... ... ... ... 35
19 Undertakings ... ... ... ... ... ... ... ... ... 39
20 Events of Default ... ... ... ... ... ... ... 48
21 Default Interest ... ... ... ... ... ... ... ... 51
22 Indemnities ... ... ... ... ... ... ... ... ... 53
23 The Administrative Agent ... ... ... ... ... ... 56
24 Set-Off/Pro Rata Sharing ... ... ... ... ... ... 60
25 Expenses and Stamp Duty ... ... ... ... ... ... 61
26 Calculations and Evidence ... ... ... ... ... 62
27 Novation and Assignment ... ... ... ... ... ... 62
28 Remedies, Waivers, Amendments and Consents ... 64
29 Communications ... ... ... ... ... ... ... ... 65
30 Partial Invalidity ... ... ... ... ... ... ... 65
31 Nature of Rights and Obligations ... ... ... ... 67
32 Counterparts ... ... ... ... ... ... ... ... ... 67
33 Governing Law and Jurisdiction ... ... ... ... 67
Schedule 1 Conditions Precedent 69
Schedule 2 Notice of Drawing 71
Schedule 3 Novation Notice 72
Schedule 4 Associated Costs 75
Schedule 5 Liens existing as of June 30, 1994 77
Schedule 6 Certificate of Borrower 78
Schedule 7 Certificate of Guarantor 80
Schedule 8 Opinion of Simmons & Simmons 82
Schedule 9 Opinion of Rufus Wallingford, Esq. 86
Schedule 10 Opinion of Fulbright & Jaworski 90
Schedule 11 Opinion of Linklaters & Paines 98
THIS AGREEMENT is made on December 5, 1994 BETWEEN:-
(1) BFI ACQUISITIONS PLC ("BFIA"), a company incorporated in
England and Wales with (company number 2969121) and whose
registered office is located at 5 Roundwood Avenue, Stockley
Park, Uxbridge, Middlesex UB11 1BX;
(2) BFI INTERNATIONAL, INC. ("BFII"), a Delaware corporation
whose principal executive offices are at 757 North Eldridge,
Houston, Texas 77079;
(3) BROWNING-FERRIS INDUSTRIES EUROPE, INC. ("BFIE"), a Delaware
corporation whose principal executive offices are at 3500 GK,
Utrecht, Holland;
(4) BROWNING-FERRIS INDUSTRIES, INC. as borrower ("BFI") and as
guarantor (the "Guarantor"), a Delaware corporation whose
principal executive offices are at 757 North Eldridge, Houston,
Texas 77079;
(5) THE BANKS AND FINANCIAL INSTITUTIONS listed under the
heading "Banks" at the end of this Agreement (the "Banks");
(6) CREDIT SUISSE as administrative agent for the Banks (the
"Administrative Agent"); and
(7) CREDIT SUISSE as arranger of the facility (the "Arranger").
WHEREAS:-
As a result of arrangements by the Arranger, the Banks are
willing to make available to the Borrowers (as defined below)
under the guarantee of the Guarantor a Sterling revolving credit
facility of up to 500,000,000 pounds with a multi-currency
option.
IT IS AGREED as follows:-
1 INTERPRETATION
(A) Definitions: In this Agreement, except to the extent that
the context requires otherwise:-
"Advance" means an advance made or to be made by the Banks
under this Agreement or, as the case may be, the outstanding
principal amount of any such advance;
"Advance Date" means in respect of any Advance, the date on
which it is made pursuant to this Agreement or, as the case may
be, the proposed date for the making thereof as specified in the
applicable Notice of Drawing;
"Alternate Currency" means Deutschmarks or Dollars;
"Alternate Currency Advance" means a LIBOR Advance
denominated in an Alternate Currency;
"Applicable Laws" means the laws in effect from time to time
and applicable to this Agreement and the transaction evidenced
by, and arising in connection with, this Agreement which
lawfully permits the charging and collection of the highest
permissible lawful, nonusurious rate of interest on this
Agreement and the transaction evidenced by, and arising in
connection with, this Agreement, including laws applicable to
each Bank with respect to Advances made by it and, to the extent
controlling, laws of the United States of America;
"Applicable Margin" means with respect to LIBOR Advances or
CD Advances, the relevant rate per annum determined by the
Administrative Agent in accordance with Clause 6(D);
"Applicable Rate" shall have the meaning given in Clause
10(A);
"Assessment Rate" means, for any date, the annual rate
(rounded upwards, if not already a whole multiple of 1/100 of 1%,
to the next higher 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment
rate that will be employed in determining amounts payable by
Chemical Bank to the FDIC for insurance by the FDIC of time
deposits made in Dollars at its domestic offices;
"Associated Costs" means in relation to any Interest Period
(or part of an Interest Period) relating to a LIBOR Advance or
overdue sum denominated in Sterling and made by a Bank through
its U.K. Lending Office, the percentage rate per annum
determined by the Administrative Agent in accordance with
Schedule 4;
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, as of any particular time, the present value
(discounted at the rate of interest implicit in the terms of the
lease involved in such Sale and Leaseback Transaction, as
determined in good faith by the Guarantor), of the obligation of
the lessee thereunder for net rental payments (excluding,
however, any amounts required to be paid by such lessee, whether
or not designated as rent or additional rent, on account of
maintenance and repairs, services, insurance, taxes,
assessments, water rates and similar charges or any amounts
required to be paid by such lessee thereunder contingent upon
monetary inflation or the amount of sales, maintenance and
repairs, insurance, taxes, assessments, water rates or similar
charges) during the remaining term of such lease (including any
period for which such lease has been extended or may, at the
option of the lessor, be extended);
"Attwoods" means Attwoods p.l.c.;
"Available Commitment" means, in relation to a Bank, its
Commitment less the Sterling Amount or, following the operation
of Clause 2(F), the Dollar Amount of its Outstandings;
"Available Facility" means, at any particular time, the
total amount of the Available Commitments;
"Base Rate" means, for any date, a rate per annum (rounded
upwards, if not already a whole multiple of 1/16 of 1%, to the
next higher 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% or (c) the Federal Funds Effective Rate in
effect for such day plus 1/2 of 1%. For purposes hereof, the
term "Prime Rate" means, as of a particular date, the prime rate
most recently determined by the Administrative Agent
automatically fluctuating upward and downward with and at the
time specified in each such announcement without special notice
to the Borrowers or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged
to a customer. "Base CD Rate" shall mean the sum of (x) the
product of (i) the Three-Month Secondary CD Rate and (ii)
Statutory Reserves and (y) the Assessment Rate. "Three-Month
Secondary CD Rate" means, for any day, the secondary market rate
for three-month certificates of deposit reported as being in
effect on such day (or, if such day is not a Business Day, the
next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board,
be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day,
the arithmetic average of the secondary market quotations for
three-month certificates of deposit of major money center banks
in New York City received at approximately 9:00 a.m. New York
City time, on such day (or, if such day shall not be a Business
Day, on the next preceding Business Day) by the Administrative
Agent from three New York City negotiable certificate of deposit
dealers of recognised standing selected by it. "Federal Funds
Effective Rate" means, for any day, the weighted average of the
rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such
day on such transactions received by the Administrative Agent
from three federal funds brokers of recognised standing selected
by it. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate
or the Federal Funds Effective Rate or both for any reason,
including the inability of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the
Base Rate shall be determined without regard to clause (b) or
(c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to
such inability no longer exist. Any change in the Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively;
"Base Rate Advance" means an Advance denominated in Dollars
(as from time to time reduced by prepayment or repayment) with
respect to which any Borrower shall have selected an interest
rate based on the Base Rate pursuant to Clause 4;
"Board" means the Board of Governors of the Federal Reserve
System of the United States;
"Borrower" means, depending on the context, either BFIA,
BFII, BFIE or BFI and "Borrowers" means BFIA, BFII, BFIE and
BFI;
"Business Day" means a day on which:-
(1) in relation to any LIBOR Advances, deposits in
Sterling and any relevant Alternate Currency may be dealt in on
the Inter-bank Market and banks and foreign exchange markets are
open and are not authorised or required to close in London and
New York City; and
(2) in relation to any CD Advance or Base Rate Advance,
banks are open and are not authorised or required to close in
Houston and New York; and
(3) in addition, in relation to:-
(a) any payment in an Alternate Currency to be
made on that day;
(b) any amount in an Alternate Currency in respect
of which a rate of interest is to be determined on that day; or
(c) any amount in any currency in respect of which
an equivalent in another currency is to be determined on that
day;
banks are open for business and are not authorised or
required to close in the Place of Payment of each currency
concerned;
"CD Advance" means any Advance denominated in Dollars (as
from time to time reduced by repayment or prepayment) with
respect to which any Borrower shall have selected an interest
rate based on the CD Rate pursuant to Clause 4;
"CD Rate" means, with respect to any CD Advance for any
Interest Period, an interest rate per annum (rounded upwards, if
not already a whole multiple of 1/100 of 1%, to the next higher
1/100 of 1%) equal to the sum of (a) a rate per annum equal to the
product of (i) the Fixed Certificate of Deposit Rate in effect
for such Interest Period and (ii) Statutory Reserves plus (b)
the Assessment Rate. For purposes hereof, the term "Fixed
Certificate of Deposit Rate" shall mean the rate of interest
determined by the Administrative Agent to be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100 of
1%) of the prevailing rates per annum bid at 9:00 a.m., New York
City time, to the Administrative Agent on the first Business Day
of the Interest Period applicable to such CD Advance by at least
two New York certificate of deposit dealers of recognised
standing for the purchase at face value from each of the
Reference Banks of a certificate of deposit of such Reference
Bank in an amount comparable to the principal amount of the
participation of such Reference Bank in such CD Advance and
having a maturity comparable to such Interest Period;
"Code" means the United States Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder;
"Commitment" means, in relation to a Bank, and subject to
the conditions of this Agreement, the amount set opposite its
name under the heading "Commitment" at the end of this Agreement
as reduced from time to time in accordance with the terms of
this Agreement;
"Consolidated Net Income" means, for any period, the gross
revenues of the Guarantor and its Subsidiaries for such period
less all expenses and proper income charges (including taxes),
determined on a consolidated basis in accordance with United
States generally accepted accounting principles applied on a
consistent basis;
"Consolidated Net Tangible Assets" means the aggregate
amount of Assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all goodwill,
customer lists, covenants not to compete, trade names,
trademarks, patents, copyrights, franchises, organisation
expenses, formulae and processes, option rights and other like
intangibles and (b) all current liabilities; all as reflected in
the Guarantor's latest audited consolidated balance sheet
contained in the Guarantor's most recent audited financial
statements prior to the time as of which "Consolidated Net
Tangible Assets" shall be determined;
"Consolidated Net Worth" means in relation to the Guarantor
and its Subsidiaries, the aggregate of (1) the stated and
paid-in capital accounts for all outstanding common and
preferred shares (but excluding redeemable preferred shares) and
(2) retained earnings, as shown on the then most recent
consolidated balance sheet of the Guarantor, prepared in
accordance with generally accepted accounting principles in the
United States of America in effect as of the date of this
Agreement;
"Currency of Account" has the meaning attributed to it in
Clause 22;
"Debt" means Indebtedness for Borrowed Money;
"Deutschmarks" and "DM" mean the lawful currency of Germany;
"Dollar Amount" means, in relation to an Advance:-
(1) if the notice requesting that Advance requested
that it be denominated in Dollars, the amount specified in that
notice; or
(2) if the notice requesting that Advance requested
that it be denominated in Sterling or Deutschmarks, the Dollar
equivalent (calculated by the Administrative Agent on the date
of receipt of such notice) of the amount specified in that
notice; except that, if all or part of that Advance is not made or
is repaid or prepaid, the Dollar Amount of that Advance shall be
correspondingly reduced. Any reference to the Dollar Amount of
a prepayment or a Bank's Outstandings shall be construed
accordingly;
"Dollars" and "$" mean the lawful currency of the United
States of America;
"Duff & Phelps" means Duff & Phelps Credit Rating Company;
"ERISA" means the Employee Retirement Income Security Act of
1974 of the United States of America as the same may be amended,
modified or supplemented together with the regulations
promulgated thereunder;
"Event of Default" means one of the events mentioned in
Clause 20;
"Facility" means the facility for making Advances to the
Borrowers under this Agreement;
"Facility Fee" means the facility fee referred to in Clause
10(A);
"FDIC" means the Federal Deposit Insurance Corporation (or
any successor);
"Fee Letter" means the letter dated September 19, 1994 from
the Arranger to the Guarantor setting out the terms upon which
fees are to be paid;
"Final Maturity Date" means December 31, 1997;
"Group" means, at any particular time, the Guarantor and all
its Subsidiaries (and "member of the Group" shall be construed
accordingly);
"Highest Lawful Rate" means, as of a particular date, the
maximum lawful nonusurious interest rate (if any) permitted to
be charged any of the Borrowers on the loan transaction
evidenced by, and arising in connection with, this Agreement for
that date by Applicable Laws, stated as a rate per annum;
"Incurrence Time" has the meaning attributed to it in Clause
19(B)(2);
"Information Memorandum" means the document dated October
19, 1994 containing certain information regarding (among other
things) the Guarantor, Attwoods and their respective
Subsidiaries as delivered to the Banks and such other
information as shall be agreed by the Arranger and the Guarantor
and which, at the request and on behalf of the Guarantor, has
been prepared in connection with this transaction and
distributed by the Arranger to the Banks;
"Inter-bank Market" means the London inter-bank market;
"Interest Period" means a period by reference to which
interest is calculated on an Advance or overdue sum provided
that any Interest Period which would otherwise extend beyond the
Final Maturity Date shall end on that date;
"Lending Office" means, in relation to a Bank, its U.S.
Lending Office or U.K. Lending Office, as the case may be,
through which it is acting for the purposes of this Agreement;
"LIBOR" has the meaning set out in Clause 6(C);
"LIBOR Advance" means an Advance (as from time to time
reduced by repayment or prepayment) with respect to which any
Borrower shall have selected an interest rate based on LIBOR
pursuant to Clause 4;
"Lien" means any mortgage, pledge, lien, hypothecation,
security interest, conditional sale or other title retention
agreement or other charge or encumbrance;
"Majority Banks" means Banks, the Sterling Amounts (or,
following the operation of Clause 2(F), the Dollar Amounts) of
whose Outstandings together exceed 66 2/3% of the Sterling
Amounts (or, following the operation of Clause 2(F), the Dollar
Amounts) of the total Outstandings (or, if there are no
Outstandings, Banks whose Commitments together exceed 66 2/3% of
the total Commitments);
"Moody's" means Moody's Investors Service, Inc.;
"New Bank" means a bank or financial institution to which a
Bank seeks to novate all or part of its rights and/or
obligations in accordance with Clause 27(C);
"Notice of Drawing" means a notice substantially in the form
set out in Schedule 2 specifying, amongst other things whether
the proposed drawing is to be made by way of LIBOR Advance, CD
Advance or Base Rate Advance;
"Novation Notice" means a notice substantially in the form
set out in Schedule 3;
"Offer" means the offer announced on behalf of the Guarantor
on September 20, 1994 and increased on November 17, 1994 and as
further amended on November 28, 1994 to acquire all the ordinary
shares in the capital of Attwoods and all the convertible
preference shares of Attwoods (Finance) N.V. (whether in issue
or to be allotted) (which expression shall include that offer as
it is or any of its terms may be further amended, added to,
revised, renewed or waived with the prior approval of the
Arranger);
"Offer Document" means the offer document as first posted to
the shareholders of Attwoods in connection with the Offer as
supplemented by the increased offer document dated November 17,
1994 and as further amended on November 28, 1994 ;
"Outstandings" means, in relation to a Bank at any
particular time, the aggregate principal amount of its share of
all (if any) Advances outstanding at that time;
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA;
"Place of Payment" means the principal financial centre of
the country of the currency to be paid (or, if there is more
than one such centre, one of those centres as selected by the
Administrative Agent) or such other city as may be agreed to by
the Administrative Agent;
"Plan" means any employee pension benefit plan maintained or
contributed to by the Guarantor or any of its Subsidiaries or by
any trade or business (whether or not incorporated) under common
control (as defined in Section 4001(b) of ERISA) with the
Guarantor and insured by the PBGC under title IV of ERISA;
"Potential Event of Default" means any event or circumstance
which, if it continued after the giving of any notice, the
expiry of any grace period, and/or (as the case may be) the
making of any determination by the Majority Banks, provided for
in Clause 20, would become an Event of Default;
"Principal Property" means any waste processing, waste
disposal or resource recovery plant or similar facility owned
by, or leased to, the Guarantor or any Restricted Subsidiary,
except (a) any such plant or facility (i) owned or leased
jointly or in common with one or more Persons other than the
Guarantor and its Subsidiaries, in which the interest of the
Guarantor and its Restricted Subsidiaries does not exceed fifty
per cent. (50%), or (ii) which the Board of Directors of the
Guarantor determines in good faith is not of material importance
to the total business conducted, or Assets owned, by the
Guarantor and its Subsidiaries as an entirety, or (b) any
portion of any such plant or facility which the Board of
Directors of the Guarantor determines in good faith not to be of
material importance to the use or operation thereof;
"Principal Subsidiary" means a Subsidiary (a) whose total
Assets or gross revenues (each such amount expressed on a
combined basis before eliminations and adjustments in the case
of a Subsidiary or a Subsidiary which itself has Subsidiaries)
represent, respectively, not less than one point seven five per
cent. (1.75%) of either the consolidated total Assets or
consolidated gross revenues of the Guarantor and its
Subsidiaries all as calculated annually by reference to the
immediately preceding fiscal year end financial data
(consolidated or unconsolidated, as the case may be) of such
Subsidiary and the then latest fiscal year end audited
consolidated financial statements of the Guarantor, or (b) to
which is transferred all or substantially all of the Assets or
undertakings of a Principal Subsidiary. A certificate by the
chief financial officer for the time being of the Guarantor as
to whether a Subsidiary is or is not or was or was not a
Principal Subsidiary at a specified date shall, in the absence
of manifest error, be conclusive and binding;
"Qualifying Lender" means a Person which for any reason,
including but not limited to the location of its Lending Office,
its place of incorporation, domicile or fiscal residence, the
nature of its business or its entitlement to the benefit of an
applicable tax treaty, shall be entitled by reference to the
applicable laws and practices prevailing on the date hereof to
receive interest on its participation in any Advance free of any
withholding or deduction for or on account of any Tax under the
laws of the United Kingdom or the United States of America; and
for the purposes of this definition, a Person not resident in
the United Kingdom for the purposes of United Kingdom taxation
shall be regarded as so entitled to receive interest free of any
such withholding or deduction under the laws of the United
Kingdom if that Person is entitled to a refund of the entire
amount of any such Tax withheld or deducted in respect of such
interest;
"Quarter Date" means 31st March, 30th June, 30th September
and 31st December in any year;
"Rate Fixing Day" means, in the case of Sterling, the first
day of the relevant Interest Period or, in any other case, the
second Business Day before the first day of the relevant
Interest Period;
"Reference Banks" means, subject to Clause 27(E), (a) with
reference to any LIBOR Advance such London office of Credit
Suisse, Chemical Bank and Bank of America National Trust and
Savings Association and (b) with reference to any CD Advance
such New York office of Credit Suisse, Chemical Bank and Bank of
America National Trust and Savings Association, in each case as
is from time to time designated by the relevant bank to the
Administrative Agent for this purpose;
"Regulations D, G, T, U and X" means respectively,
Regulations D, G, T, U and X of the Board;
"Repayment Date" means, in relation to a LIBOR Advance, the
last day of the Interest Period relating thereto or, in relation
to a CD Advance, the last day of the Interest Period relating
thereto or, in relation to a Base Rate Advance, the earlier of
the Final Maturity Date and the date for repayment thereof as
determined pursuant to Clause 5(A);
"Required Amount" means:-
(1) in the case of Sterling, a minimum of 5,000,000
pounds and a whole multiple of 5,000,000 pounds;
(2) in the case of Dollars, a minimum of $10,000,000
and a whole multiple of $5,000,000;
(3) in the case of Deutschmarks, such amount as is from
time to time agreed by the relevant Borrower and the
Administrative Agent or, failing agreement, the equivalent
(rounded on such basis as may reasonably be determined by the
Administrative Agent and notified to the relevant Borrower) of
either (i) the Required Amount for Sterling or, (ii) following
the operation of Clause 2(F), the Required Amount for Dollars;
"Restricted Subsidiary" means any Principal Subsidiary other
than Otto Entsorgungsdienstleistungen GmbH;
"S&P" means Standard & Poors Ratings Group, a division of
McGraw-Hill, Inc;
"Sale and Leaseback Transaction" has the meaning attributed
to it in Clause 19(C);
"Senior Funded Debt" when used with respect to any Person on
any date, means unsecured and non-credit enhanced Debt of such
Person which (a) matures or is required to be paid more than one
year from the date of determination thereof or (b) matures
within one year from such date but is unconditionally renewable
or extendible (by its terms or by the terms of any instrument or
agreement relating thereto) at the option of such Person to a
date more than one year from such date, or (c) arises under a
revolving credit or similar agreement which obligates the lender
or lenders to extend credit over a period of more than one year
from such date and in each case is not subordinated in right of
payment to any other debt of such Person;
"Statutory Reserves" means a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of
the maximum reserve percentages (including any marginal,
special, emergency, or supplemental reserves), expressed as a
decimal, established by the Board and any other banking
authority to which any of the Banks is subject with respect to
the CD Rate or the Base CD Rate, for new negotiable time
deposits in Dollars of over $100,000 with maturities approximately
equal to the applicable Interest Period. Such reserve percentages
shall include those imposed under Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage;
"Sterling" and "pounds" mean the lawful currency of the
United Kingdom;
"Sterling Advance" means a LIBOR Advance denominated in
Sterling;
"Sterling Amount" means, in relation to an Advance:-
(1) if the notice requesting that Advance requested
that it be denominated in Sterling, the amount specified in that
notice; or
(2) if the notice requesting that Advance requested
that it be denominated in an Alternate Currency, the Sterling
equivalent (calculated by the Administrative Agent on the date
of receipt of such notice) of the amount specified in that
notice; except that, if all or part of that Advance is not made or
is repaid or prepaid, the Sterling Amount of that Advance shall
be correspondingly reduced. Any reference to the Sterling
Amount of a prepayment or a Bank's Outstandings shall be
construed accordingly;
"Subsidiary", in relation to any Person, means, at any
particular time, any Person which is then directly or indirectly
Controlled, or more than fifty per cent. (50%) of whose issued
equity share capital (or equivalent) is then beneficially owned,
by that first-mentioned Person and/or one or more of its
Subsidiaries;
"U.K. Lending Office" means, in relation to a Bank, the
office or offices of it located in London through which it
makes, subject to Clause 27(D), any LIBOR Advances to BFIA;
"U.S. Lending Office" means, in relation to a Bank, the
office or offices of it located in the United States through
which it makes any CD Advance or Base Rate Advance or, subject
to Clause 27(D), a LIBOR Advance;
(B) Construction of Certain References: Except to the extent
that the context requires otherwise, any reference in this
Agreement to:-
an "Act" or any Section of, Schedule to or other provision
of an Act shall be construed, at any particular time, as
including a reference to any modification, extension or
re-enactment thereof then in force and all instruments, orders
and regulations then in force and made under or deriving
validity from the relevant Act or provision;
"acting in concert" shall have the meaning attributed to
that term in The City Code on Takeovers and Mergers;
an "affiliate" of any Person is a reference to a Subsidiary
or a holding company, or a Subsidiary of a holding company, of
such Person;
an "Agency" of a state includes any agency, authority,
central bank, department, government, legislature, minister,
ministry, official, or public or statutory Person (whether
autonomous or not) of, or of the government of, that state or
any political sub-division in or of that state;
an "agreement" also includes a concession, contract, deed,
franchise, licence, treaty or undertaking (in each case, whether
oral or written);
this "Agreement" includes this Agreement as from time to
time amended, supplemented or novated, and any document which
amends, supplements or novates this Agreement, in accordance
with Clause 27(C) or 28(B);
the "Assets" of any Person means all or any part of its
business, undertaking, property, assets, revenues (including any
right to receive revenues) and uncalled capital;
"Borrowed Money" includes any Indebtedness (1) for or in
respect of money borrowed or raised (whether or not for cash),
by whatever means (including acceptances and deposits) or (2)
for the deferred purchase price of Assets or services but
excluding any obligation in respect of such deferred purchase
price which (a) has a maximum remaining maturity of one year
(although its maturity may have originally exceeded one year),
or (b) is in respect of normal trade debts;
"Consent" also includes an approval, authorisation,
exemption, filing, licence, order, permission, recording or
registration (and references to obtaining Consents shall be
construed accordingly);
one 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 directly or indirectly to
control the affairs and policies of that Person;
a "Directive" includes any present or future directive,
regulation, request, requirement, rule or credit restraint
programme of any Agency of any country or state or of any
self-regulating organisation (but, if not having the force of
law, only if compliance with the Directive is in accordance with
the general practice of Persons to whom the Directive is
intended to apply);
the "equivalent" in any currency (the "first currency") of
any amount in another currency (the "second currency") shall be
construed as a reference to the amount in the first currency
which could be purchased with that amount in the second currency
at the spot rate of exchange at which the Administrative Agent
would have been prepared and able to purchase that amount in the
first currency for the second currency in the London foreign
exchange market as at or about such time and on such date as the
Administrative Agent may from time to time reasonably determine
to be appropriate in the circumstances;
a "Guarantee" also includes an indemnity, and any other
obligation (whatever called) of any Person to pay, purchase,
provide funds (whether by the advance of money, the purchase of
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 of any other
Person (and "guaranteed" and "guarantor" shall be construed
accordingly);
"Indebtedness" includes any obligation (whether present or
future, actual or contingent, secured or unsecured, as
principal, surety or otherwise) for the payment or repayment of
money which would be regarded as indebtedness in accordance with
United States generally accepted accounting principles;
a "law" includes common or customary law and any
constitution, decree, judgment, legislation, order, ordinance,
regulation, statute, treaty or other legislative measure, in
each case of any jurisdiction whatever (and "lawful" and
"unlawful" shall be construed accordingly);
something having a "Material Adverse Effect" on a Person is
to it having a material adverse effect (1) on its financial
position or business or on the consolidated financial position
or business of that Person and its Subsidiaries or (2) on its
ability to perform and comply with its obligations under this
Agreement;
any "obligation" of any Person under this Agreement or any
other agreement or document shall be construed as a reference to
an obligation expressed to be assumed by or imposed on it under
this Agreement or, as the case may be, that other agreement or
document (and "due", "owing", "payable" and "receivable" shall
be similarly construed);
a "Person" includes any individual, company, corporation,
firm, partnership, joint venture, association, organisation,
trust, state or Agency of a state (in each case, whether or not
having separate legal personality);
"Security" includes any mortgage, pledge, lien,
hypothecation, security interest or other charge or encumbrance
(and "secured" shall be construed accordingly);
"Tax(es)" includes any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed;
"Tax on the 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 all or part of the net
income, profits or gains of that Person (whether worldwide, or
only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or
otherwise);
the "Winding-up" of a Person also includes the amalgamation,
reconstruction, reorganisation, administration, receivership,
administrative receivership, voluntary arrangement with
creditors, dissolution, liquidation, merger or consolidation of
that Person, and any equivalent or analogous procedure under the
law of any jurisdiction in which that Person is incorporated,
domiciled or resident or carries on business or has Assets.
Headings shall be ignored in construing this Agreement.
2 THE FACILITY
(A) Amount: The Banks grant to the Borrowers, subject to the
provisions of this Agreement, a revolving credit facility in an
aggregate amount of 500,000,000 pounds with a multi-currency
option as provided herein. Advances under the Facility may be
made by way of LIBOR Advance, CD Advance or Base Rate Advance as
further described below.
(B) Pro Rata Participation in Advances: Each Bank will
participate through its relevant Lending Office in each Advance
to be made under the Facility in the proportion borne by its
Available Commitment to the Available Facility when the
Administrative Agent receives the relevant Notice of Drawing
(unless, between then and the time for making that Advance, such
Bank's Available Commitment is reduced to zero pursuant to the
terms of this Agreement in which case such Bank shall not
participate in such Advance and the amount of the Advance
requested in the relevant Notice of Drawing shall be reduced by
what would have been such Bank's proportion of such Advance).
(C) Calculation of Available Commitments/Facility: In order to
calculate the amount of the Available Facility and each Bank's
Available Commitment in connection with a proposed Advance:-
(1) any Advances with Repayment Dates on or before the
proposed date of that Advance shall be deemed to have been
repaid; and
(2) if any other requests are outstanding for Advances to be
made on or before the proposed date of that Advance, all
Advances to which those requests relate shall be deemed to be
outstanding.
(D) Purpose: The Borrowers shall use the Facility to assist in
funding the consideration for the Offer. In addition, the
Facility may be used to fund purchases of ordinary and
preference shares in the capital of Attwoods and Attwoods
(Finance) N.V. other than pursuant to the Offer at a price per
share first approved by the Administrative Agent, if greater
than the price per share under the Offer, and may be used to
refinance any existing indebtedness of Attwoods or its
Subsidiaries including debt which becomes due and payable as a
result of, and in funding working capital requirements that
result from, the Offer becoming or being declared unconditional
in all respects and, subject to the foregoing may further be
used for the general corporate purposes of the relevant
Borrower. Notwithstanding the foregoing, and without prejudice
to the obligations of the Borrowers under this Clause 2(D),
neither the Administrative Agent, the Arranger nor any Bank
shall be responsible for checking that such proceeds are applied
by the Borrowers in the foregoing manner.
(E) Total Facility: Subject to Clause 2(F), the total amount
which may be outstanding under the Facility on any Repayment
Date shall not exceed 500,000,000 pounds.
(F) Currency of Commitment: With effect from the earlier to
occur of (1) the date falling six months after the first Advance
made under this Agreement or if that date is not a Repayment
Date the immediately preceding Repayment Date or (2) a Repayment
Date specified by the Guarantor, each Bank's existing Commitment
will be converted for the remaining duration of this Agreement
to the Dollar equivalent of such Commitment (calculated by the
Administrative Agent on the fourth Business Day before such date
(the "Dollar Commitment")) and thereafter all references to such
Bank's Commitment shall be deemed to be to the relevant Bank's
Dollar Commitment, as reduced from time to time in accordance
with the terms of this Agreement.
3 CONDITIONS PRECEDENT
No Borrower may make its first request for an Advance under this
Agreement until the Administrative Agent has confirmed to the
Borrowers that the Administrative Agent has received evidence
satisfactory to the Administrative Agent that the requirements
of Schedule 1 have been complied with.
4 DRAWDOWN OF ADVANCES
(A) Drawdown Conditions: Subject to the provisions of Clause 7
in respect of an Alternate Currency Advance, Advances will be
made by the Banks to any of the Borrowers at the relevant
Borrower's request if the following additional conditions are
fulfilled:-
(1) Drawdown Request: (i) in the case of a LIBOR Advance,
not later than 3.00 p.m. (London time) on the fourth Business
Day before the Advance Date (ii) in the case of a CD Advance not
later than 3.00 p.m. (New York City time) on the fourth Business
Day before the Advance Date, and (iii) in the case of a Base
Rate Advance not later than 10.00 a.m. (New York City time) on
the Advance Date (or, in any case, such later time as the Administrative
Agent with the consent of all the Banks may accept), the
Administrative Agent has received from the relevant Borrower a
Notice of Drawing specifying:-
(a) whether the Advance is a Sterling Advance, an
Alternate Currency Advance, a LIBOR Advance, a CD Advance or a
Base Rate Advance;
(b) the Advance Date (which must be a Business Day
before the Final Maturity Date);
(c) in the case of a LIBOR Advance, the currency of
that LIBOR Advance (which must be in Sterling or an Alternate
Currency);
(d) the amount (which must be or produce a Sterling
Amount or, following the operation of Clause 2(F), a Dollar
Amount equal to or less than the Available Facility and, if
less, must be a Required Amount);
(e) in the case of a LIBOR Advance or a CD Advance, the
duration of its Interest Period (which must be in accordance
with Clause 6(A)); and
(f) details of the bank (which must be in the Place of
Payment or such other city as may be agreed by the
Administrative Agent) and account to which the relevant Borrower
wishes the proceeds of that Advance to be made available by the
Administrative Agent;
(2) No Market Disruption: in the case of a LIBOR Advance,
none of the events mentioned in Clause 14(A) occurs in relation
to that LIBOR Advance;
(3) Representations, etc. Correct: all representations and
warranties in Clause 18(A) (other than those in paragraphs (13),
(15) and (16) of sub-Clause (A) thereof which shall relate only
to the first Advance made under this Agreement) would be correct
if repeated on the Advance Date by reference to the
circumstances then existing; and
(4) No Event of Default, etc: no Event of Default or
Potential Event of Default has occurred and is continuing on the
proposed date of that Advance or will occur as a result of
making that Advance.
(B) Notification of Drawdown Requests: The Administrative Agent
shall promptly notify each Bank of the proposed details of, and
the amount of that Bank's share of, each Advance.
5 REPAYMENT
(A) Repayment of Base Rate Advances: Subject as otherwise
provided in this Agreement, each Base Rate Advance shall be
repaid by the relevant Borrower on its Repayment Date, being
the date, not earlier than one Business Day after the date of
such Base Rate Advance, on which the Administrative Agent receives
notice from the relevant Borrower by 10.00 a.m. (New York City time)
on that date that it wishes to repay that Base Rate Advance on that
date, and any amount so repaid will be available for immediate
reborrowing on the terms and conditions of this Agreement. The
Administrative Agent shall promptly notify the Banks of the receipt of
notification of a Repayment Date pursuant to this Clause.
(B) Repayment of all Advances: Subject as otherwise provided in
this Agreement each Advance shall be repaid by the relevant
Borrower on its Repayment Date, together with all unpaid
interest accrued on that Advance and any amount so repaid before
the Final Maturity Date will remain available for reborrowing on
the terms and conditions of this Agreement.
(C) Final Maturity Date: If on the Final Maturity Date any
Advance remains outstanding, the relevant Borrower shall repay
that Advance on that date together with all unpaid accrued
interest and fees and any other sum then due under this
Agreement.
6 INTEREST ON ADVANCES
(A) Interest Periods: Subject as otherwise provided in this
Agreement, the Interest Period of a LIBOR Advance or a CD
Advance shall be determined as follows:-
(1) in the case of a LIBOR Advance, its Interest Period
shall begin on the relevant Advance Date of that LIBOR Advance
and shall be of one, two, three or six months' (or, additionally
in the case of Sterling Advances, 1 week's duration) or, subject
to the availability to each Bank, such longer period as selected
by the relevant Borrower in its Notice of Drawing except that
the relevant Borrower's selection of an Interest Period of more
than six months shall only be effective if no Bank disagrees
with that selection by notice received by the Administrative
Agent not later than 11.00 a.m. (London time) on the third
Business Day before the Advance Date. If the Administrative
Agent receives any such notice it shall promptly and in any
event no later than 3.00 p.m. (London time) on the third
Business Day before the Advance Date, notify the relevant
Borrower and the Banks of that fact. In that event, that
Interest Period shall be of the alternative duration (if any)
selected by the relevant Borrower in its Notice of Drawing,
failing which, that Interest Period shall be of three months'
duration;
(2) in the case of a CD Advance, the Interest Period shall
begin on the relevant Advance Date of that CD Advance and shall
be of 30, 60, 90 or 180 days' duration, as selected by the
relevant Borrower in its Notice of Drawing.
(B) Interest Rates: Subject as otherwise provided in this
Agreement, the rate of interest payable on an Advance shall be
equal to the lesser of the Highest Lawful Rate and:-
(1) in the case of a LIBOR Advance, during the Interest
Period relating thereto, the rate per annum (as determined by
the Administrative Agent) equal to the sum of (a) LIBOR, (b) the
Applicable Margin and (c) the Associated Costs, if any, (in the
case of a Sterling Advance); and
(2) in the case of a CD Advance, during the Interest Period
relating thereto, the rate per annum equal to the CD Rate plus
the Applicable Margin; and
(3) in the case of a Base Rate Advance, the Base Rate
applicable on each day that such Base Rate Advance is
outstanding.
(C) LIBOR: In relation to a LIBOR Advance made or to be made on
a particular Advance Date, LIBOR means the rate per annum equal
to the arithmetic mean (rounded up, if necessary, to the next
one-sixteenth of one per cent. (1/16%)) of the respective rates
(as quoted to the Administrative Agent at its request) at which
each Reference Bank is offered deposits in the currency of that
Advance and for the relevant Interest Period in an amount
comparable to its share, if any, of the relevant Advance, by
prime banks in the Inter-bank Market (or, if not, 10% of that
Advance) at or about 11.00 a.m. (London time) on the relevant
Rate Fixing Day.
(D) Applicable Margin: For the purposes of determining the
Applicable Margin for LIBOR Advances and CD Advances, the
Administrative Agent shall, at the commencement of each Interest
Period determine the rating given by S&P, Moody's and Duff &
Phelps at such time to the Senior Funded Debt of the Guarantor,
and based on such determination, the Applicable Margin shall be
as follows:-
Applicable Margin
(in 1/100 of 1%
per annum)
Rating by S&P/Moody's/Duff & Phelps LIBOR Advances
CD Advances
A- / A3/ A- or higher 20.0 32.5
BBB+ / Baa1/ BBB+ 35.0 47.5
BBB / Baa2/ BBB 40.0 52.5
BBB- / Baa3/ BBB- 50.0 62.5
BB+ / Ba1/ BB+ or below 87.5 100.0
If during the course of any Interest Period, any of the rating
agencies mentioned above shall announce a change of its rating
of the Guarantor's Senior Funded Debt, and as a result of such
change, the Applicable Margin would increase or decrease if
calculated at that date, the Applicable Margin will change with
effect from the date of such announcement. In the event of a
split rating the rating of the majority (or in the case of three
different ratings, the middle rating) will apply.
(E) Payment of Interest on LIBOR Advances and CD Advances: In
relation to a LIBOR Advance or a CD Advance on each Repayment
Date, the relevant Borrower shall pay the unpaid interest
accrued during the relevant Interest Period on the Advance or
overdue sum to which it relates at the rates applicable for that
Interest Period. However, in the case of an Interest Period of
more than three months, the interest accrued during the first and
the subsequent three month periods shall be paid on the last Business
Day of each such three month period.
(F) Payment of Interest on Base Rate Advances: In relation to
a Base Rate Advance on the earlier of the Repayment Date and the
next succeeding Quarter Date, the relevant Borrower shall pay
the unpaid interest accrued on any Base Rate Advance or overdue
sum to which such Repayment Date or Quarter Date, as the case
may be, relates at the rate(s) applicable for that Base Rate
Advance or overdue sum.
(G) Notification of Interest Rate: The Administrative Agent
shall promptly on the date of determination thereof, notify the
relevant Borrower and the Banks of each rate of interest
applicable to an Advance, and in the case of a Base Rate Advance
upon any change in the applicable Base Rate, in each case
determined in accordance with Clause 6(B) or Clause 21.
(H) Reference Bank Notification: Each Reference Bank shall use
its best endeavours to supply the information referred to in
Clause 6(C) and in the definition of "CD Rate" to the
Administrative Agent to enable the Adminstrative Agent to
determine LIBOR or the CD Rate, as the case may be. If any
Reference Bank does not do so by noon on any date on which the
relevant rate of interest is to be determined, the relevant
arithmetic mean shall be determined on the basis of the
quotations supplied by the remaining Reference Banks. If no, or
only one, Reference Bank supplies a quotation, Clause 14(A)
shall apply.
7 MULTICURRENCY OPTION
(A) Requests for Alternate Currency: If the relevant Borrower
so requests in any Notice of Drawing for a LIBOR Advance
denominated in an Alternate Currency, that LIBOR Advance shall
be made in the Alternate Currency specified in that request
unless otherwise provided in this Agreement. CD Advances and
Base Rate Advances may only be denominated in Dollars.
(B) Response to Request for an Alternate Currency: Not later
than 2.00 p.m. (London time) on the third Business Day before
the Advance Date, any Bank may notify the Administrative Agent
to the effect that:-
(1) that Bank expects to be unable to obtain matching
deposits in that Alternate Currency in the Inter-bank Market at
or about 11 a.m. (London time) on the Rate Fixing Day in
sufficient amounts to fund its share of that Advance; or
(2) it would be impossible, impracticable, unlawful or
contrary to a Directive for its share of that Advance to be
denominated in that Alternate Currency.
If the Administrative Agent receives any such notice, it shall
promptly (and in any event by 3.00 p.m. (London time) on the
third Business Day before the Advance Date) notify the relevant
Borrower and the Banks.
(C) Fallback Currency: If the Administrative Agent receives a
notice from any Bank in accordance with Clause 7(B) then,
subject to Clause 4(A)(2), the relevant Advance shall instead be
made either (i) in Sterling and in the Sterling Amount of that
Advance or (ii) following the operation of Clause 2(F), Dollars
and in the Dollar Amount of that Advance.
(D) Changes in Condition: Without prejudice to Clause 14, if
(1) any event described in Clause 7(E) occurs (or comes to the
attention of the Administrative Agent) after receipt by the
Administrative Agent of the Notice of Drawing and (2) the
Administrative Agent gives notice to the relevant Borrower by
3.00 p.m. (London time) on the third Business Day before the
Advance Date to the effect that, as a result, it will not be
possible for that Advance to be made in the Alternate Currency
requested by the relevant Borrower, then (subject to Clause
4(A)(2)) that Advance shall instead be denominated either (i) in
Sterling and in the Sterling Amount of that Advance or (ii)
following the operation of Clause 2(F), Dollars and in the
Dollar Amount of that Advance. In that event, the rate of
interest applicable to that Advance for its Interest Period
shall be determined by reference to rates prevailing at such
time on the relevant Rate Fixing Day calculated in accordance
with Clause 6.
(E) Supervening Events: The events referred to in Clause 7(D)
are (1) the relevant Alternate Currency for any reason not being
freely convertible into Sterling or Dollars (following the
operation of Clause 2(F)) as appropriate and/or not being freely
transferable, (2) such changes in applicable law or Directive
(including, in particular, exchange controls) or in the
availability in the Inter-bank Market of deposits for the
relevant Interest Period in the relevant Alternate Currency as
(in any such case) would, in the opinion of the Administrative
Agent (after consultation, if practicable, with the Banks), make
it impossible, impracticable, unlawful or contrary to a
Directive for all or part of the relevant Advance to be
denominated in that Alternate Currency during that Interest
Period and/or (3) the impossibility of making payment in the
Place of Payment in the manner provided for in this Agreement.
8 PREPAYMENT
(A) Of all Banks: The relevant Borrower may prepay any LIBOR
Advance or CD Advance, or any part thereof which is a Required
Amount, without premium and otherwise free of any other sums or
penalties, but subject to Clause 22(B), at any time before the
relevant Repayment Date for that Advance by giving to the
Administrative Agent not less than 5 Business Days' notice of
the date and amount of prepayment. Any such prepayment must be
accompanied by accrued interest on the amount prepaid and by any
other sum then due under Clause 22(B) or any other provision of
this Agreement.
(B) Of certain Banks: If (1)(a) any Bank gives notice to the
Administrative Agent pursuant to Clause 7(B) that the relevant
Alternate Currency is no longer available to it, (b) any of the
Borrowers becomes obliged to pay any Tax or other amount for the
account of any Bank under Clause 11(B) or 13(A) or (c) an
alternative basis is not agreed with any relevant Bank within
the 10 day period referred to in Clause 14(C), and (2) the
relevant Borrower gives to that Bank and the Administrative
Agent not less than 5 Business Days' notice of the date of
prepayment, the relevant Borrower may prepay all (but not part
only) of that Bank's Outstandings without premium and otherwise
free of any other sums or penalties, but subject to Clause
22(B), on the date of prepayment specified in that notice. Upon
the Administrative Agent receiving that notice, that Bank's
Commitment (if any), together with the amount to be prepaid,
shall be cancelled. Any such prepayment must be accompanied by
accrued interest on that Bank's Outstandings, all unpaid fees
accrued to that Bank and by any other sum then due to that Bank
under any other provision of this Agreement.
(C) Miscellaneous: Any notice of prepayment given by any of the
Borrowers under this Agreement must be accompanied by any
Consent required by any Agency to the making of that prepayment
and will oblige the relevant Borrower to prepay in accordance
with that notice. None of the Borrowers may repay or prepay all
or any part of the Advances except as expressly provided in this
Agreement.
9 CANCELLATION
(A) Of All Banks: Any of the Borrowers may cancel the Available
Facility or any part thereof in a Required Amount, without
premium or penalty at any time before the Final Maturity Date by
giving to the Administrative Agent not less than 5 Business
Days' notice of the date and amount of the cancellation. Any
such partial cancellation shall reduce each Bank's Available
Commitment rateably.
(B) Of Certain Banks: If (1) any Bank gives notice to the
Administrative Agent pursuant to Clause 7(B) that the relevant
Alternate Currency is no longer available to it, (2) the
relevant Borrower becomes obliged to pay any Tax or other amount
for the account of any Bank under Clause 11(B) or 13(A) or (3)
an alternative basis is not agreed with any relevant Bank within
the 10 day period referred to in Clause 14(C), the relevant
Borrower may cancel all (but not part only) of that Bank's
Commitment without premium or penalty at any time before the
Final Maturity Date by giving to that Bank not less than 5
Business Days' notice of the date of the cancellation. Any such
notice of cancellation must be accompanied by all unpaid fees
accrued to that Bank and any other sum then due to that Bank
under any other provision of this Agreement.
(C) Cancellation Rights Limited: None of the Borrowers may
cancel all or any part of the Available Facility except as
expressly provided in this Agreement.
10 FEES
(A) Facility Fee: The Borrowers shall pay to the Administrative
Agent for the account of each Bank a facility fee (the "Facility
Fee") at the Applicable Rate on the amount and in the currency
of that Bank's Commitment from day to day during the period
beginning on the date of this Agreement and ending on the Final
Maturity Date. The Facility Fee shall be payable quarterly in
arrear on each Quarter Date and on the Final Maturity Date or
any earlier date on which that Bank's Commitment first equals
zero.
For the purposes of this Clause 10(A), "Applicable Rate" shall
be determined by the Administrative Agent on the following
basis. On each Quarter Date the Administrative Agent shall
determine the rating given by S&P, Moody's and Duff & Phelps at
such time to the Senior Funded Debt of the Guarantor and based
on such ratings the Applicable Rate shall be as follows:-
Applicable Rate
(in 1/100 of 1%
Rating by S&P/Moody's/Duff & Phelps
per annum)
A- / A3/ A- or higher 12.5
BBB+ / Baa1/ BBB+ 15.0
BBB / Baa2/ BBB 17.5
BBB- / Baa3/ BBB- 25.0
BB+ / Ba1/ BB+ or below 37.5
If during the course of any payment period any of the rating
agencies mentioned above shall announce a change of its rating
of the Guarantor's Senior Funded Debt, and as a result of such
change, the Applicable Rate would increase or decrease, if
calculated on that date, the Applicable Rate will change with
effect from the date of such announcement. In the event of a
split rating, the rating of the majority (or in the case of
three different ratings, the middle rating) will apply.
(B) Underwriting and Participation Fees: The Borrowers shall
pay to the Arranger for its own account an underwriting fee in
an amount already agreed between the Arranger and the Guarantor.
The Administrative Agent shall pay to each Bank (other than the
Administrative Agent or the Arranger) a participation fee in the
amount already agreed between the Arranger and that Bank upon
receipt of the same by the Administrative Agent from the
Borrowers.
(C) Administrative Agent's Fee: The Borrowers shall pay to the
Administrative Agent for its own account an agency fee in an
amount and at such times as heretofore agreed between the
Administrative Agent and the Guarantor.
11 TAXES
(A) Payments to be Free and Clear: All sums payable by any of
the Borrowers or the Guarantor under this Agreement shall be
paid (a) free of any restriction or condition, (b) free and
clear of and (except to the extent required by law) without any
deduction or withholding for or on account of any Tax and (c) without
deduction or withholding (except to the extent required by law)
on account of any other amount, whether by way of set-off or
otherwise.
(B) Grossing-up of Payments:
(1) If any of the Borrowers, the Guarantor or any other Person
(whether or not a party to, or on behalf of a party to, this
Agreement) must at any time deduct or withhold any Tax or other
amount from any sum paid or payable by, or received or
receivable from, the Borrowers or the Guarantor under this
Agreement, the relevant Borrower or the Guarantor shall pay such
additional amount as is necessary to ensure that the
Administrative Agent or, as the case may be the Bank to which
that sum is due receives on the due date and retains (free from
any liability other than Tax on its own Overall Net Income) a
net sum equal to what it would have received and so retained had
no such deduction or withholding been required or made.
However, if:-
(a) on the due date of a payment of interest to a Bank on an
Advance, that Bank is not a Qualifying Lender and
(b) as a result, the relevant Borrower or the Guarantor is
required to deduct or withhold United Kingdom income tax or
United States withholding tax from that payment of interest,
the relevant Borrower or the Guarantor shall not be so required
to pay an additional amount in respect of that deduction or
withholding unless it results from the introduction of or any
change in, or in the interpretation or application of, any
relevant law or any relevant practice of the Inland Revenue or
the Internal Revenue Service after this Agreement is entered
into.
(2) If any of the Borrowers, the Guarantor or any other Person
(whether or not a party to, or on behalf of a party to, this
Agreement) must at any time pay any such Tax or other amount on,
or calculated by reference to, any sum received or receivable by
the Administrative Agent or, as the case may be, any Bank under
this Agreement (except for a payment by the Administrative Agent
or a Bank of Tax on its own Overall Net Income), the relevant
Borrower or the Guarantor shall pay or procure the payment of
that Tax or other amount together with any interest or penalty
that becomes payable or, if that Tax or other amount is payable
and paid by the Administrative Agent or any Bank, shall
reimburse it on demand for the amount paid by it (as evidenced
by an accompanying certificate) including any interest or
penalty.
(3) Within 30 days after paying any sum from which it is
required to make any deduction or withholding, and within 30
days after the due date of payment of any Tax or other amount
which it is required by paragraph (2) above to pay, the relevant
Borrower or the Guarantor shall deliver to the Administrative
Agent evidence satisfactory to the Administrative Agent or, as
the case may be, the relevant Bank of that deduction,
withholding or payment and (where remittance is required) of the
remittance thereof to the relevant taxing or other authority.
(4) As soon as any of the Borrowers or the Guarantor is aware
that any such deduction, withholding or payment is required (or
of any change in any such requirement), it shall notify the
Administrative Agent.
Notwithstanding the foregoing, in no event shall the
compensation payable under this Clause 11 (to the extent, if
any, constituting interest under Applicable Laws) together with
all amounts constituting interest under Applicable Laws and
payable in connection with this Agreement exceed the Highest
Lawful Rate or the maximum amount of interest permitted to be
charged by Applicable Laws.
(C) Tax Forms:
(1) With respect to any Advances to be made to BFII, BFIE or
BFI, each Bank which is organised under the laws of a
jurisdiction outside the United States, on the date of the
initial Advance hereunder, and from time to time thereafter if
requested by the relevant Borrower or the Administrative Agent,
shall provide the Administrative Agent, the relevant Borrower
and the Guarantor with the forms prescribed by the Internal
Revenue Service of the United States certifying as to such
Bank's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made
to such Bank hereunder or other documents reasonably
satisfactory to the relevant Borrower, the Guarantor and the
Administrative Agent indicating that all payments to be made to
such Bank hereunder are exempt from such tax by an applicable
tax treaty or because such payments are effectively connected
with the conduct by such Bank of, a United States trade or
business. Unless and until such forms or other documents shall
have been provided to the Administrative Agent, the relevant
Borrower or the Guarantor (as the case may be) shall, where
required to do so under the laws of the United States of
America, withhold or deduct Tax in respect of such payments at
the applicable statutory rate and, unless and until such forms
or other documents shall have been so provided, neither the
relevant Borrower nor the Guarantor (as the case may be) shall
be required to pay any additional amount in accordance with
Clause 11(B)(1) in respect of any amount so withheld or deducted
unless the obligation to withhold or deduct results from the
introduction of or any change in, or in the interpretation or
application of, any relevant law or practice of the United
States tax authorities after the date hereof.
(2) To the extent that any Bank seeks to make, makes or acquires
any Advance to BFIA otherwise than through a U.K. lending office
("a U.K. Office"), each such Bank (other than a Bank resident in
the United Kingdom for the purposes of United Kingdom taxation)
shall complete such forms as may be prescribed by the United
Kingdom tax authorities from time to time for the purposes of
claiming relief under a relevant United Kingdom double taxation
treaty and shall submit such completed forms to the appropriate
tax authorities in the jurisdiction where such Bank is resident
or domiciled, in order to obtain an appropriate certification of
the fiscal status of such Bank in that jurisdiction and in order
to secure the onward transmission of such completed forms to the
relevant office of the United Kingdom tax authorities (currently,
the Inland Revenue (Foreign Intermediaries and Claims Office) in
Nottingham, England).
Unless and until BFIA shall have received a notice from the
United Kingdom tax authorities that interest in respect of any
Advance made otherwise than through a U.K. Office may be paid
free of any withholding or deduction on account of Tax, BFIA
shall, where required to do so under the laws of the United
Kingdom, withhold or deduct Tax in respect of such interest at
the applicable statutory rate, and unless and until BFIA shall
have received such a notice, neither BFIA nor the Guarantor
shall be required to pay any additional amount in accordance
with Clause 11(B)(1) in respect of any amount so withheld or
deducted unless the obligation to withhold or deduct results
from the introduction of or any change in, or in the
interpretation or application of, any relevant law or practice
of the United Kingdom tax authorities after the date hereof.
BFIA shall forthwith notify the Administrative Agent if it
receives from the United Kingdom tax authorities a notice that
interest in respect of any Advance made otherwise than through
a U.K. Office may be paid free of any withholding or deduction
on account of Tax.
12 ILLEGALITY
(A) If at any time any Bank determines that it is or will become
unlawful or contrary to any law or Directive of any Agency of
any country or state for it to allow all or part of its
Commitment to remain outstanding, to make, fund or allow to
remain outstanding all or part of its Outstandings, to carry out
all or any of its other obligations under this Agreement and/or
to charge or receive interest at the rate applicable or which
will be applicable during the current or next Interest Period,
then, unless the problem has been resolved by the operation of
Clause 7(C) or 7(D):-
(1) upon that Bank notifying the Borrowers, its Commitment
(if any) shall be cancelled; and
(2) the relevant Borrower shall prepay that Bank's share of
each Advance with accrued interest thereon and any other sum
then due to that Bank under this Agreement within 3 Business
Days of such notice or, if earlier, on such date as and to such
extent that Bank shall certify to be necessary to comply with
the relevant law or Directive.
(B) Notwithstanding Clause 12(A), if the foregoing illegality
only applies to the relevant Bank's LIBOR Advances, then, by
written notice to the Borrowers and to the Administrative Agent,
such Bank may:-
(1) declare that LIBOR Advances will not thereafter be made
by such Bank hereunder, whereupon the Borrowers shall be
prohibited from requesting LIBOR Advances from such Bank
hereunder unless such declaration is subsequently withdrawn; and
(2) require that all outstanding LIBOR Advances denominated
in Dollars made by it be converted to Base Rate Advances, in
which event (a) all such LIBOR Advances shall be automatically
converted to Base Rate Advances as of the effective date of such
notice and (b) all payments and prepayments of principal which
would otherwise have been applied to repay the converted LIBOR
Advances shall instead be applied to repay the Base Rate
Advances resulting from the conversion of such LIBOR Advances.
For purposes of this Clause, a notice to the Borrowers (with a
copy to the Administrative Agent) by any Bank shall be effective
on the date of receipt thereof by the relevant Borrower.
13 INCREASED COSTS
(A) Increased Costs: If the Administrative Agent or any Bank,
as the case may be, determines that, as a result of the
introduction of or any change in any law or Directive, or in the
interpretation or application thereof including, without
limitation, in respect of any change in or application of
reserve, capital adequacy, asset ratio or other similar
requirements which introduction or change takes effect after the
date of this Agreement:-
(1) the cost to that Bank of maintaining all or any part of
its Commitment and/or of making, maintaining or funding all or
any part of its share of any Advance or overdue sum is directly
or indirectly increased; and/or
(2) any sum received or receivable by it under this
Agreement or the effective return to it under this Agreement or
the overall return on its capital is directly or indirectly
reduced (except on account of Tax on its Overall Net Income);
and/or
(3) it directly or indirectly makes any payment (except on
account of Tax on its Overall Net Income) or forgoes any
interest or other return on or calculated by reference to the
amount of any sum received or receivable by it under this
Agreement; the Administrative Agent or that Bank, as the case
may be, shall as soon as possible after it becomes aware of any
such change notify the Borrowers and the Administrative Agent or
the Bank, as the case may be, of such change and its consequent
determination with a certificate evidencing details reasonably
sufficient to establish the basis on which any such increase in
cost, reduction, payment or forgone interest or other return was
calculated. Notwithstanding any other provision of this
Agreement, but subject to Clause 30(B), the Borrowers shall
indemnify the Administrative Agent or the Bank, as the case may
be, against that increase in cost, reduction, payment or forgone
interest or other return (except to the extent that it results
from any requirement, other than a capital adequacy requirement,
referred to in paragraph 4 of Schedule 4, a deduction or
withholding of Tax or is otherwise reflected in the CD Rate or
Base Rate in the case of CD Advances or Base Rate Advances) and,
accordingly, shall from time to time on demand pay to the
Administrative Agent, for its own account or for the account of
the relevant Bank, as the case may be, the amount certified by
it to be necessary so to indemnify it. Under this Clause 13, a
Bank shall be entitled to claim indemnification not only for a cost,
reduction, payment or forgone interest or other return directly
attributable to this Agreement, its Commitment, its share of any
Advance or any overdue sum, but also for that proportion of any cost,
reduction, payment or forgone interest or other return which the
Bank determines to be fairly allocable to this Agreement, its
Commitment, its share of any Advance or any overdue sum in
relation to any law or Directive applicable to that Bank or
affecting the conduct of that Bank's business or a type of
business or the manner in which or the extent to which that Bank
allocates capital resources.
(B) Regulation D: Without prejudice to the generality of Clause
13(A), if any Bank shall incur any costs in connection with the
making, funding or maintenance of the portion of any LIBOR
Advance made by such Bank to any of the Borrowers and resulting
from any change after the date of this Agreement in any reserve
requirements under Regulation D as in effect from time to time
(or any successor regulation issued by the Board or any
successor thereto) in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on LIBOR
Advances is determined or any category of extensions of credit
or other Assets which includes its portion of any LIBOR
Advance), such Bank may require the relevant Borrower to pay, on
the later of the date for payment of interest on such LIBOR
Advance and five Business Days after notification by such Bank
of the amount then due to it under this Clause 13(B), additional
interest on the portion of such LIBOR Advance made by such Bank
at a rate per annum equal to the amount by which (1)(a) the rate
of interest applicable to such LIBOR Advance (exclusive of the
Applicable Margin) divided by (b) one minus the increase in the
reserve ratio resulting from any such change prescribed by
Regulation D for such requirements exceeds (2) the rate
specified in sub-paragraph (1)(a) such rate per annum to be
adjusted automatically on and as of the effective date of any
change in such reserve ratio. Any Bank wishing to require
payment of such additional interest (i) shall promptly so notify
the relevant Borrower and the Administrative Agent, in which
case such additional interest on the Outstandings of such Bank
shall be payable directly to such Bank with respect to each
LIBOR Advance and (ii) shall notify the relevant Borrower and
the Administrative Agent of the amount then due it under this
Clause 13(B) as evidenced by an accompanying certificate. Each
Bank which would otherwise be entitled to payment under this
Clause 13(B) undertakes that it will take such reasonable steps
as are in the opinion of such Bank available to it (including
nominating a different Lending Office in a different
jurisdiction) to reduce to a minimum the amount required to be
paid by the relevant Borrower under this Clause 13(B). Any such
costs resulting from any such reserve requirements existing at
the date of this Agreement are for the account of each Bank
incurring such costs and may not be claimed from, and will not
be paid by, the relevant Borrower.
Notwithstanding the foregoing, in no event shall the
compensation payable under this Clause 13 (to the extent, if
any, constituting interest under Applicable Laws) together with
all amounts constituting interest under Applicable Laws and
payable in connection with this Agreement exceed the
Highest Lawful Rate or the maximum amount of interest permitted
to be charged by Applicable Laws.
14 CHANGE IN MARKET CONDITIONS
(A) Triggering Events: If in relation to any LIBOR Advance or
CD Advance:-
(1) no, or only one, Reference Bank (a) in the case of a
LIBOR Advance, supplies a quotation as required by Clause 6(C)
or (b) in the case of a CD Advance, provides the information
required pursuant to the definition of "CD Rate"; or
(2) in the case of any LIBOR Advance, on the basis of
notifications from the Majority Banks, the Administrative Agent
determines that (a) the Majority Banks are unable to obtain
matching deposits in the Inter-bank Market at or about 11.00
a.m. on the Rate Fixing Day in sufficient amounts to fund their
respective share of the LIBOR Advance during the related
Interest Period or (b) the arithmetic mean (rounded up, if
necessary, to the next 1/16%) of the quotations supplied by the
Reference Banks does not accurately reflect the cost to the
Majority Banks of obtaining such deposits; or
(3) the Administrative Agent determines that, by reason of
circumstances affecting the Inter-bank Market, adequate and fair
means do not or will not exist for determining the rate of
interest applicable for that related Interest Period; or
(4) in the case of any CD Advance, the Administrative Agent
shall have determined that the CD Rate cannot be determined for
any reason, including the inability of the Administrative Agent
to obtain sufficient bids in accordance with the terms of the
definition of Fixed Certificate of Deposit Rate, or the Majority
Banks shall have determined (and notified the Administrative
Agent) that the CD Rate for such CD Advance will not adequately
and fairly reflect the cost to any Bank of making or maintaining
such CD during such Interest Period;
the Administrative Agent shall promptly notify the relevant
Borrower and the Banks and that Advance shall not be made. In
such an event, unless the relevant Borrower otherwise elects,
any request by such Borrower for a LIBOR Advance or CD Advance
as the case may be shall be deemed to be a request for a Base
Rate Advance until the circumstances giving rise to such event
no longer exist or an alternative basis for calculating interest
on a LIBOR Advance or a CD Advance, as the case may be, is
agreed pursuant to Clause 14(B).
(B) Negotiation: The Administrative Agent (on behalf of and
after consultation with the Banks) shall then negotiate as soon
as reasonably practicable with the relevant Borrower with a view
to agreeing an alternative basis for calculating the interest
payable on the LIBOR Advance or CD Advance, as the case may be,
to which that Interest Period relates. Any alternative basis
agreed in writing by the Administrative
Agent (on behalf of and with the consent of all the Banks) and
the relevant Borrower shall take effect in accordance with its
terms.
(C) Individual Non-Availability:
(1) If in relation to (a) any LIBOR Advance, any Bank notifies
the Administrative Agent that by reason of circumstances
affecting the Inter-bank Market, it is unable to obtain matching
deposits in the London Inter-bank Market at or about 11.00 a.m.
(London time) on the Rate Fixing Day in sufficient amounts to
fund its share of the LIBOR Advance for the related Interest
Period; or (b) in relation to any LIBOR Advance or CD Advance,
by reason of circumstances affecting the Inter-bank Market or
the market in certificates of deposit, the quotations supplied
by the Reference Banks do not accurately reflect the cost to it
of making or maintaining such Advance, the Administrative Agent
shall promptly notify the relevant Borrower accordingly unless
it has already given a notification to the relevant Borrower in
relation to that LIBOR Advance under Clause 14(A). In such an
event, unless the relevant Borrower otherwise elects, any
request by such Borrower for a LIBOR Advance or CD Advance as
the case may be shall be deemed to be a request for a Base Rate
Advance until the circumstances giving rise to such event no
longer exist or an alternative basis for calculating interest on
that Bank's share in such LIBOR Advance or CD Advance, as the
case may be, is agreed to pursuant to paragraph (2) below.
(2) The relevant Borrower, the Administrative Agent and that
Bank shall then negotiate (unless and until Clause 14(B) comes
into operation in relation to that Advance) with a view to
agreeing on an alternative basis for calculating the rate of
interest payable on that Bank's share of such Advance. Any
alternative basis agreed in writing by the relevant Borrower,
the Administrative Agent and that Bank within 10 days of the
Administrative Agent's notification under paragraph (1) above
shall take effect in accordance with its terms. If an
alternative basis is not so agreed and the Advance has not been
converted to a Base Rate Advance in accordance with Clause 14(A)
or paragraph (1) above, that Bank's share of such Advance shall
during that Interest Period bear interest at the rate per annum
equal to the sum of the Applicable Margin and the cost to it (as
certified by it to the relevant Borrower within 10 days of the
end of that initial 10 day period and expressed as a rate per
annum) of funding its share during that Interest Period by
whatever means it determines to be most appropriate.
15 MITIGATION
If any circumstances arise which result, or would on the giving
of notice (or the like) result, in any of the Borrowers or the
Guarantor having to make a payment to or for the account of a
Bank under Clause 11(B), 12, 13 or 14, or in a Bank's Commitment
being cancelled under Clause 12(A), then without in any way
limiting, reducing or otherwise qualifying any of the
obligations of the Borrowers or the Guarantor under Clauses 11
to 14:-
(A) promptly after an officer of that Bank with
responsibility for its participation in the Facility becomes
aware of the relevant circumstances and their results, that
Bank shall notify the relevant Borrower;
(B) in the event that any Bank shall give a notice pursuant
to Clause 15(A), the relevant Borrower may give notice to such
Bank (with a copy to the Administrative Agent) that it wishes
such Bank to novate all its Commitment to another Qualifying
Lender in accordance with the provisions of Clause 27. Each
Bank giving a notice pursuant to Clause 15(A) agrees to novate
its Commitment to any Qualifying Lender pursuant to Clause 27
upon receipt by such Bank of an amount equal to the sum of all
its Outstandings, accrued interest and all other fees and
amounts due to the Bank hereunder calculated, in each case, to
the date such Commitment is novated; and
(C) in consultation with the relevant Borrower and the
Administrative Agent, that Bank shall take all such steps as it
determines are reasonably open to it and as are acceptable to
the relevant Borrower and the Administrative Agent to mitigate
the effect of those circumstances (such as changing its Lending
Office, restructuring its participation in the Facility and/or
novating some or all of its rights or obligations under this
Agreement to another Person acceptable to the relevant Borrower
and willing to take that novation).
However, no Bank shall be obliged to take any such steps which
in its opinion would or might have an adverse effect on that
Bank.
16 GUARANTEE AND INDEMNITY
(A) Guarantee: The Guarantor unconditionally and irrevocably
guarantees that, if for any reason any of the Borrowers do not
pay any sum payable by it under this Agreement by the time, on
the date and otherwise in the manner specified in this Agreement
(whether on the normal due date, on acceleration or otherwise),
the Guarantor will pay that sum before close of business on that
date in the Place of Payment.
(B) Guarantor as Principal Debtor: As between the Guarantor and
(apart from the Borrowers) the other parties to this Agreement
but without affecting any of the Borrowers' obligations, the
Guarantor shall be liable under this Clause 16 as if it were the
sole principal debtor and not merely a surety. Accordingly, it
shall not be discharged, nor shall its liability be affected, by
anything which would not discharge it or affect its liability if
it were the sole principal debtor (including (1) any time,
indulgence, concession, waiver or consent at any time given to
the relevant Borrower or any other Person, (2) any amendment or
supplement to any other Clause of this Agreement or to any
Security or other Guarantee, (3) the making or absence of any
demand on the relevant Borrower or any other Person for payment,
(4) the enforcement or absence of enforcement of this Agreement
or of any Security or other Guarantee, (5) the taking, existence
or release of any Security or other Guarantee, (6) the
Winding-up of the relevant Borrower or any other Person or (7)
the illegality, invalidity or unenforceability of or any defect
in any provision of this Agreement or any of the relevant
Borrower's obligations under it).
(C) Guarantor's Obligations Continuing: The Guarantor's
obligations under this Agreement are and will remain in full
force and effect by way of continuing security until no sum
remains to be lent under this Agreement and the Administrative
Agent and Banks have irrevocably received or recovered all sums
payable under this Agreement. Furthermore, those obligations
of the Guarantor are additional to, and not instead of, any Security
or other Guarantee at any time existing in favour of any Person, whether
from the Guarantor or otherwise, and may be enforced without
first having recourse to the relevant Borrower, any other
Person, any Security or any other Guarantee. The Guarantor
irrevocably waives the requirement to receive any notice or
demand of any kind.
(D) Exercise of Guarantor's Rights: So long as any sum remains
to be lent or remains payable under this Agreement:-
(1) any right of the Guarantor, by reason of the performance
of any of its obligations under this Clause 16, to be
indemnified by any of the Borrowers, to take the benefit of or
enforce any Security or other Guarantee or to exercise any right
of subrogation or set-off shall be exercised and enforced only
in such manner and on such terms as the Administrative Agent
(acting on instructions from the Majority Banks) may require;
and
(2) any amount received or recovered by the Guarantor (a) as
a result of any exercise of any such right or (b) in the
Winding-up of any of the Borrowers shall be held in trust for
the Administrative Agent and the Banks and immediately paid to
the Administrative Agent.
(E) Avoidance of Payments: The Guarantor shall on demand
indemnify the Adminstrative Agent and each Bank against any
funding or other cost, loss, expense or liability (including
loss of Margin) sustained or incurred by the Administrative
Agent or, as the case may be, that Bank as a result of it being
required for any reason (including any bankruptcy, insolvency,
Winding-up or similar law of any jurisdiction) to refund all or
part of any amount received or recovered by it in respect of any
sum payable by any of the Borrowers under this Agreement and
shall in any event pay to the Administrative Agent or, as the
case may be, the relevant Bank on demand the amount so refunded
by it.
(F) Suspense Accounts: For the purpose of enabling the
Administrative Agent or any Bank to maximise its recoveries in
any actual or potential Winding-up, any amount received or
recovered by the Administrative Agent or any Bank (otherwise
than as a result of a payment by any of the Borrowers to the
Administrative Agent) in respect of any sum payable by any of
the Borrowers under this Agreement may be placed by the
recipient in an interest bearing suspense account. That amount
may be kept there (with any interest earned being credited to
that account) unless and until the recipient is satisfied that
it is not obliged to pay any further sum under this Agreement
and that it has irrevocably received or recovered its share of
the Advances, all interest accrued thereon and any other sums
payable to it under this Agreement.
(G) Indemnity: As separate, independent and alternative
stipulations, the Guarantor unconditionally and irrevocably
agrees:-
(1) that any sum which, although expressed to be payable by
any of the Borrowers under this Agreement, is for any reason
(whether or not now existing and whether or not now known or
becoming known to any party to this Agreement) not recoverable
from the Guarantor on the basis of a guarantee shall
nevertheless be recoverable from it as if it were the sole
principal debtor and shall be paid by it to the Administrative
Agent on demand; and
(2) as a primary obligation to indemnify the Administrative
Agent and each Bank against any loss suffered by it as a result
of any sum expressed to be payable by any of the Borrowers under
this Agreement not being paid by the time, on the date and
otherwise in the manner specified in this Agreement or any
payment obligation of any of the Borrowers under this Agreement
being or becoming void, voidable or unenforceable for any reason
(whether or not now existing and whether or not now known or
becoming known to any party to this Agreement), the amount of
that loss being the amount expressed to be payable by any of the
Borrowers in respect of the relevant sum.
17 PAYMENTS
(A) By Banks: On each date on which any amount is to be made
available to any of the Borrowers by the Banks in respect of an
Advance, each Bank shall make its share of that amount available
to the Administrative Agent. Each such amount shall be made
available in the currency in which the Advance is to be
denominated during the Interest Period beginning on that date:-
(1) if payable in Sterling, so as to be received in Sterling
in immediately available cleared funds before 11 a.m. (London
time) to the Administrative Agent's account no. 1000037 (in the
name of "Credit Suisse, New York Re. BFI") with Credit Suisse of
5 Cabot Square, London, England or, as the case may be, such
other account of the Administrative Agent and/or with such other
bank in the City of London as the Administrative Agent shall
have designated for that purpose; and
(2) if payable in any other currency, in that currency and
in such funds and by such time on the due date as may then be
generally accepted for the settlement in the Place of Payment of
international payments in that currency to such account with
such bank in the Place of Payment as the Administrative Agent
shall have designated for that purpose.
(B) Disbursement to the Borrowers: The Administrative Agent
shall make the amounts so received by it from the Banks
available to the relevant Borrower before close of business in
the Place of Payment on that date by payment in the same
currency and funds as received by the Administrative Agent to
such account with such bank as the relevant Borrower shall have
specified in the notice requesting that Advance. If any Bank
makes its share of an Advance available to the Administrative
Agent later than required by Clause 17(A), the Administrative
Agent shall make that share available to the relevant Borrower
as soon as practicable thereafter.
(C) Currency of Payments: Each repayment or prepayment of
principal shall be made in the currency in which the Advance or
other amount so repaid or prepaid was denominated immediately
before the repayment or prepayment. Each payment of interest
shall be made in the currency in which the Advance or other
amount in respect of which that interest accrued is denominated.
Each additional amount payable under Clause 11(B)(1) shall be
paid in the same currency as the sum to which it relates. Each
sum payable under Clause 11(B)(2), 13, 16(E) or 25(C) shall be
paid in the currency specified by the Person for whose account
it is payable. All payments in respect of costs, losses,
expenses and liabilities under Clauses 17(G)(2), 22(A), 22(B),
23(H), 25(A) or 25(B) shall be made in the currency in which
they were incurred. All other payments shall be made in
Sterling or, following the operation of Clause 2(F), Dollars.
(D) By the Borrowers or the Guarantor: On each date on which a
payment is to be made by any of the Borrowers or the Guarantor,
it shall make that payment to the Administrative Agent in the
currency specified in Clause 17(C):-
(1) if payable in Sterling, so as to be received in Sterling
in immediately available cleared funds before 11 a.m. (London
time) (in the case of the relevant Borrower) or close of
business in the City of London (in the case of the Guarantor) to
the Administrative Agent's account specified in Clause 17(A)(1)
or, as the case may be, such other account of the Administrative
Agent and/or with such other bank in the City of London as the
Administrative Agent shall have designated to it for that
purpose; and
(2) if payable in any other currency, in that currency and
in such funds and (in the case of the relevant Borrower) by such
time on the due date as may then be generally accepted for the
settlement in the Place of Payment of international payments in
that currency or (in the case of the Guarantor) by close of
business in the Place of Payment. All such payments shall be
made to such account with such bank in the Place of Payment as
the Administrative Agent shall have designated to it for that
purpose.
(E) Distribution to Banks: The Administrative Agent shall make
available to each Bank before close of business in the Place of
Payment on that date its share (if any) of any sum so received
by the Administrative Agent from the Borrowers in the same
currency and funds as received by the Administrative Agent to
such account of that Bank with such bank in the Place of Payment
as it shall have designated to the Administrative Agent for that
purpose. If any sum is received by the Administrative Agent
from any of the Borrowers later than the time specified in
Clause 17(D) or from the Guarantor, the Administrative Agent
shall make each Bank's share (if any) available to it as soon as
practicable thereafter.
(F) Order of Distribution: If the amount received by the
Administrative Agent from any of the Borrowers and/or Guarantor
on any date is less than the total sum remaining and/or becoming
due under this Agreement on that
date, the Administrative Agent shall apply that amount in or
towards payment of the following sums in the following order:-
(1) first, any sum then due to the Administrative Agent in
its capacity as such;
(2) secondly, in or towards payment pro rata of any sums
(other than principal of or interest on the Advances) then due
to the Banks (or any of them);
(3) thirdly, in or towards payment pro rata of any interest
then due on the Advances;
(4) fourthly, in or towards payment pro rata of any
principal then due.
Any such applications shall override any purported appropriation
by any Person. The Administrative Agent may (if and to the
extent necessary) convert one currency into another.
(G) Refunding of Payments: The Administrative Agent shall not
be obliged to (but may) make available to any Person any sum
which it is expecting to receive for the account of that Person
until it has been able to establish that it has received that
sum. If and to the extent that it does so but it transpires
that it had not then received the sum which it paid out:-
(1) the Person to whom the Administrative Agent made that
sum available shall on request refund it to the Administrative
Agent and
(2) that Person or (at the option of the Administrative
Agent) the Person by whom that sum should have been made
available shall on request pay to the Administrative Agent the
amount (as certified by the Administrative Agent) which will
indemnify the Administrative Agent against any funding or other
cost, loss, expense or liability sustained or incurred by it as
a result of paying out that sum before receiving it.
(H) Non-Business Days:
(1) If any Repayment Date or the Final Maturity Date would
otherwise fall on a non-Business Day, it shall instead fall on
the next Business Day in the same calendar month (if there is
one) or the preceding Business Day (if there is not).
(2) Any payment to be made by any of the Borrowers or the
Guarantor on a day which is not a Repayment Date and which would
otherwise be due on a non-Business Day shall instead be due on
the next Business Day.
(I) Netting of Payments: Notwithstanding any other provision of
this Agreement:-
(1) if on any date an amount (the "new amount") is to be
advanced by a Bank under this Agreement and an amount (the "old
amount") is due from the relevant Borrower to that Bank under
this Agreement in the same currency, that Bank shall apply the
new amount in or towards payment of the old amount and
(2) if on any date an amount (the "new amount") is to be
advanced by a Bank under this Agreement and an amount (the "old
amount") is due from the relevant Borrower to that Bank under
this Agreement in a different currency and if the relevant
Borrower and the Administrative Agent so agree by 10.00 a.m.
(New York time) two Business Days before the relevant Advance
Date (or, if Clause 7(D) applies, by such time on such date as
the Administrative Agent determines to be appropriate in the
circumstances), the Administrative Agent shall apply a sum equal
to the new amount (or, as the case may be, so much of the new
amount as is necessary) in purchasing in the London foreign
exchange market, for value on the due date of payment of the old
amount, an amount in the currency of the old amount equal to the
old amount (or, as the case may be, so much of the old amount as
can be purchased with the new amount) and shall on receipt of
the amount so purchased apply it in or towards payment of the
old amount, unless for any reason either of those applications
cannot be made at the relevant time.
The relevant Bank shall remain obliged to advance any excess
(or, as the case may be, the relevant Borrower and the Guarantor
shall remain obliged to pay any shortfall) in accordance with
this Clause 17. Nothing in this Clause 17(I) shall be effective
to create a charge.
18 WARRANTIES
(A) By the Borrowers and the Guarantor: Each of the Borrowers
and the Guarantor severally represents and warrants to and for
the benefit of each other party to this Agreement (but, in the
case of BFIA, BFII and BFIE, only in relation to itself and its
Subsidiaries) as follows:-
(1) Status: each of the Borrowers, the Guarantor and each
Principal Subsidiary (a) is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate power
to own its property and to carry on its business as now being
conducted, (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the properties owned or
leased by it therein or in which the nature of the business
conducted by it makes such qualification necessary except where
the failure of the relevant Borrower, the Guarantor or such
Principal Subsidiary to be so qualified or in good standing,
individually or collectively, would not have a Material Adverse
Effect on the Group, and (d) in the case of each of BFIA, BFII
and BFIE, is wholly-owned and Controlled by the Guarantor.
(2) Powers: each of the Borrowers and the Guarantor has the
corporate power to enter into, exercise its rights and perform
and comply with its obligations under this Agreement and (in the
case of BFIA) to make and implement the Offer all of which have
been duly authorised by all proper and necessary corporate
action;
(3) Authorisation and Consents: all actions, conditions and
things required by applicable federal, state, or local statute
or any order, rule or regulation of any court or governmental
agency or body to be taken, fulfilled and done (including the
obtaining of any necessary Consents) in order (a) to enable each
of the Borrowers and the Guarantor lawfully to enter into,
exercise their respective rights and perform and comply with
their respective obligations under this Agreement, (b) to ensure
that those obligations are legally binding and enforceable in
accordance with their respective terms, (c) to enable BFIA to
make and implement the Offer and (d) to make this Agreement
admissible in evidence in the courts of England, and the state
and federal courts of each of the States of Texas, Delaware and
New York, have been taken, fulfilled and done;
(4) Non-Violation of Laws, etc.: the entry by each of the
Borrowers and the Guarantor into, exercise of their respective
rights and/or performance of or compliance with their respective
obligations under this Agreement and/or the making and
implementation of the Offer do not and will not violate (a) any
statute or any order, rule or regulation of any court or
governmental agency or body to which either of them is subject,
(b) their respective constitutional documents, or (c) any
agreement to which any of them or any Subsidiary is a party or
which is binding on them or their respective Assets other than
violations of any such agreements which individually or
collectively would not have a Material Adverse Effect on the
Group, and do not and will not, except as provided in Clause
19(B), result in the creation of, or oblige either of them to
create, any security over those Assets;
(5) Obligations Binding: the obligations of each of the
Borrowers and the Guarantor under this Agreement are valid,
binding and enforceable in accordance with their terms;
(6) Accounts:
(a) The audited financial statements with respect to
the Guarantor and its consolidated Subsidiaries included in the
Annual Report on Form 10-K for the year ended September 30, 1993
filed by the Guarantor pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), have been
prepared in accordance with generally accepted accounting
principles accepted in the United States of America for the
periods concerned, conform to the requirements of Regulation S-X
of the Securities and Exchange Commission and fairly present the
financial position, results of operations and cash flows of the
Guarantor and its consolidated subsidiaries at the respective
dates and for the respective periods indicated therein;
(b) The unaudited financial statements with respect to
the Guarantor and its consolidated subsidiaries included in the
Reports on Form 10-Q for the quarters ended December 31, 1993,
March 31, 1994 and June 30, 1994 filed by the Guarantor pursuant
to Section 13 of the Exchange Act, (i) have been prepared in
conformity with the rules and regulations of the Securities and
Exchange Commission and (ii) in the opinion of the management of
the Guarantor, all adjustments necessary to a fair statement of
the financial position, results of operations and cash flows for
the periods indicated have been made;
(7) Litigation: no proceedings against or affecting any of
the Borrowers or the Guarantor is pending or to the knowledge of
either of them threatened before any court or governmental
agency or department:-
(a) which purports to or does restrain the entry into,
exercise of any of their respective rights under and/or
performance or enforcement of or compliance with any of their
respective obligations under this Agreement; or
(b) which involves a material risk of the ultimate
disposition of such proceeding having (either singly or when
aggregated with any other proceeding) a Material Adverse Effect
on the Group;
(8) No Default: no Event of Default or Potential Event of
Default has occurred and is continuing or will occur as a result
of making any Advance. Neither the Guarantor, the Borrowers nor
any of their respective Subsidiaries are in breach of or default
under any agreement relating to borrowed money to an extent or
in a manner which is likely to have a Material Adverse Effect on
the Group;
(9) Investment Company Act; Public Utility Holding Company
Act: neither the Guarantor nor any Subsidiary is (a) an
"investment company" as defined in, or subject to regulation as
such under, the Investment Company Act of 1940, as amended, or
(b) a non-exempt "holding company" subject to regulation or, to
the knowledge of the Guarantor's officers, an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended;
(10) ERISA: neither the Guarantor nor any Subsidiary has
incurred any accumulated funding deficiency within the meaning
of ERISA which would have a Material Adverse Effect on the Group
and neither the Guarantor nor any Principal Subsidiary has
incurred any liability in connection with any Plan under
Sections 501 or 502 of ERISA, Subtitle IV of ERISA, or Chapter
43 of the Code which would have a Material Adverse Effect on the
Group, and each Plan is and has been in compliance in all
material respects with all applicable laws;
(11) Tax Returns and Payments:
(a) the Guarantor and its Subsidiaries have filed all
federal, state and other tax returns (or obtained extensions
with respect thereto) which, to the knowledge of the Guarantor's
officers, are required to be filed and have paid all taxes which
are shown to be due pursuant to such returns. No material
income tax liability of the Guarantor and its Subsidiaries has
been asserted by the Internal Revenue Service of the United
States of America, the Inland Revenue of Great Britain, or any
state or local agency for income taxes in excess of those
already paid which is not being contested in good faith by
appropriate proceedings and for which adequate reserves have not
been created on the books of the Guarantor and its Subsidiaries;
(b) the federal income tax liabilities of the Guarantor
and its Subsidiaries, if any, have been finally determined by
the Internal Revenue Service and satisfied for all taxable years
through the 1985 fiscal year.
(12) Existing Security: no Security exists on or over
the Assets except as permitted by Clause 19(B).
(13) No Material Adverse Change: there has been no material
adverse change in the financial position or results of
operations of the Guarantor since September 30, 1993.
(14) Winding-up: no meeting has been convened for
Winding-up any of the Borrowers or the Guarantor, no such step
is intended by any of them and, so far as either of them is
aware, no petition, application or the like is outstanding for
Winding-up any of them.
(15) Information Memorandum:
(a) the information in the Information Memorandum
relating to the Borrowers, the Guarantor and their respective
Subsidiaries and affiliates was true, complete and accurate in
all material respects at the date thereof.
(b) the information in the Information Memorandum
relating to Attwoods was correctly extracted from publicly
available information.
(16) Proceedings Affecting Offer or Attwoods Group: no
government or other Agency has instituted or (to the best of the
knowledge and belief of either BFIA or the Guarantor) threatened
any action, legal proceedings, suit, inquiry or investigation or
enacted or made, or (to the best of the knowledge and belief of
either BFIA or the Guarantor) proposed to enact or make, any
statute, regulation or order which might:-
(a) make illegal or restrict, prohibit, delay or
otherwise interfere with the acquisition of any or all of the
shares in Attwoods, the making or implementation of the Offer or
any other transaction contemplated hereunder or hereby; or
(b) require the divestiture by any member of the Group
or by Attwoods or any Subsidiary of Attwoods of all or any part
of its revenues, which divestiture could reasonably be expected
to be likely to have a Material Adverse Effect on the Group; or
(c) have a materially prejudicial effect on the
business, financial condition or prospects of Attwoods and its
Subsidiaries taken as a whole.
No other litigation, arbitration, administrative proceeding,
injunction or order is current or pending or (to the best of the
knowledge and belief of either BFIA or the Guarantor) threatened
or has been made which might have any of the effects mentioned
in (a), (b) or (c) above.
(17) Margin Stock; Use of Proceeds: neither the Guarantor
nor any of its Subsidiaries is engaged in the business of
extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U). No part of
the proceeds of any Advance will be used, directly or
indirectly, for the purpose of purchasing or carrying or trading
in any securities under such circumstances as to involve the
Guarantor or any Bank in a violation of Regulation G, T, U or X.
(18) Franchises and Other Rights: the Guarantor and each of
its Subsidiaries have all franchises, permits, licenses, and
other authority (collectively, the "Operating Rights") as are
necessary to enable them to carry on their respective businesses
as now being conducted, failure to have which would in the
aggregate have a Material Adverse Effect on the Group.
(19) Repetition: each of the representations and warranties
in paragraphs (1) to (5) above will be correct and complied with
so long as any sum remains to be lent or remains payable under
the Credit Agreement and those in paragraphs (6) to (18) above
(other than paragraphs (13), (15) and (16)) will be correct and
complied with on each Advance Date, in each case as if repeated
then by reference to the then existing circumstances.
(B) Qualifications to Warranties: Each representation and
warranty in paragraphs (3)(d) and (5) of Clause 18(A) shall
(where applicable) be subject, as to matters of law only, to the
qualifications in the opinions referred to in Schedule 1.
19 UNDERTAKINGS
Each of the Borrowers and the Guarantor severally undertakes
(but, in the case of each of BFIA, BFII and BFIE, only in
relation to itself and its Subsidiaries) that, so long as
any sum remains to be lent or remains payable under the Facility:-
(A) Status: each of their respective payment obligations
under this Agreement rank and will at all times rank at least
equally and rateably in all respects with all its other
unsecured and unsubordinated Indebtedness other than statutorily
preferred Indebtedness;
(B) Negative Pledge of the Guarantor:
(1) except as otherwise provided in paragraph (2) below, the
Guarantor shall not, and shall not permit any Restricted
Subsidiary to, incur any Debt secured by a Lien upon any
Principal Property of the Guarantor or any Restricted Subsidiary
or upon any shares of stock other than margin stock (within the
meaning of Regulation U) or any long-term receivables of the
Guarantor from any Restricted Subsidiary (whether such Principal
Property, shares of stock or long-term receivables are now owned
or hereafter acquired) without in any such case effectively
providing concurrently with the incurrence of any such Debt that
all sums payable at that time or thereafter under this Agreement
(together with, if the Guarantor shall so determine, any other
Indebtedness of the Guarantor or such Restricted Subsidiary then
existing or thereafter created which is not subordinate to such
sums) shall be secured equally and rateably with (or, at the
option of the Guarantor, prior to) such Debt, so long as such
Debt shall be so secured; provided, however, that nothing in
this sub-clause (B) shall prevent, restrict or apply to (and
there shall be excluded from secured Debt in any computation
under this sub-clause (B)) Debt secured by:-
(a) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business that are not yet
past due or which are being contested by the Guarantor in good
faith and against which adequate reserves as required by
generally accepted accounting principles have been established
by the Guarantor;
(b) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to
participate in any fund in connection with worker's
compensation, unemployment insurance, old-age pensions or other
social security programs;
(c) Liens of mechanics, materialmen, warehouses,
carriers, or other like liens, securing obligations incurred in
the ordinary course of business that are not yet past due or
which are being contested by the Guarantor in good faith and
against which adequate reserves as required by generally
accepted accounting principles have been established by the
Guarantor;
(d) Liens on property, shares of stock or Indebtedness
of any corporation existing at the time such corporation becomes
a
Restricted Subsidiary or arising thereafter (i)
otherwise than in connection with the borrowing of money
arranged thereafter and (ii) pursuant to contractual commitments
entered into prior to and not in contemplation of such
corporation becoming a Restricted Subsidiary;
(e) Liens on any property (including shares of stock or
Debt) existing at the time of acquisition thereof (including
acquisition through merger or consolidation) or securing the
payment of all or any part of the purchase price or construction
cost thereof or securing any Debt incurred prior to, at the time
of, or within 180 days after, the acquisition of such property,
shares of stock or Debt or the completion of any such
construction, whichever is later, for the purpose of financing
all or any part of the purchase price or construction cost
thereof (provided such Liens are limited to such property,
improvements thereon and the land upon which such property and
improvements are located and any other property not then
constituting a Principal Property);
(f) Liens on any property to secure all or any part of
the cost of development, operation, construction, alteration,
repair or improvement of all or any part of such property, or to
secure Debt, incurred prior to, at the time of or within 180
days after, the completion of such development, operation,
construction, alteration, repair or improvement, whichever is
later, for the purpose of financing all or any part of such cost
(provided such Liens are limited to such property, improvements
thereon and the land upon which such property and improvements
are located and any other property not then constituting a
Principal Property);
(g) Liens which secure Debt owing by a Restricted
Subsidiary to the Guarantor or to another Restricted Subsidiary
or by the Guarantor to a Restricted Subsidiary;
(h) Liens on property of the Guarantor or a Restricted
Subsidiary in favour of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any
State thereof, or in favour of any other country or any
political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or
to secure any Indebtedness incurred for the purpose of financing
all or any part of the purchase price or the cost of
construction of the property subject to such Liens, or in favour
of any trustee or mortgagee for the benefit of holders of
Indebtedness of any such entity incurred for any such purpose;
(i) Liens incurred in connection with tax exempt or
similar financing of pollution control, sewage or solid or
hazardous waste disposal facilities, or similar qualified
facilities;
(j) Liens existing at June 30, 1994 and as set out in
Schedule 5; and
(k) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in
part, of any Lien referred to in the foregoing sub-paragraphs
(a) to (j), inclusive, or of any Debt secured thereby; provided
that such extension, renewal or replacement Lien shall be
limited to all or any part of the same property that secured the
Lien extended, renewed or replaced (plus any improvements on
such property) and shall secure no larger amount of Debt than
that existing at the time of such extension, renewal or
replacement;
(2) notwithstanding the foregoing provisions of this Clause
(B), the Guarantor and any one or more Restricted Subsidiaries
may incur Debt secured by a Lien which would otherwise be
subject to the foregoing restrictions if at the time it does so
(the "Incurrence Time") the aggregate amount of such Debt plus
all other Debt of the Guarantor and its Restricted Subsidiaries
secured by a Lien which would otherwise be subject to the
foregoing restrictions (not including Debt permitted to be
secured under paragraph (1) above), plus the aggregate
Attributable Debt (determined as of the Incurrence Time) of Sale
and Leaseback Transactions (other than Sale and Leaseback
Transactions permitted by paragraphs (1) and (2) of Clause (C)
below) entered into after the date of this Agreement and in
existence at the Incurrence Time (less the aggregate amount of
proceeds of such Sale and Leaseback Transactions which shall
have been applied in accordance with paragraph (4) of Clause (C)
below), do not exceed ten per cent. (10%) of Consolidated Net
Tangible Assets;
(C) Sale and Leaseback Transactions: the Guarantor shall
not itself, and shall not permit any Restricted Subsidiary to,
enter into any arrangements after the date of this Agreement
with any bank, insurance company or other lender or investor
(other than the Guarantor or another Restricted Subsidiary)
providing for the leasing as lessee by the Guarantor or any such
Restricted Subsidiary of any Principal Property (except a lease
for a temporary period not to exceed three years by the end of
which it is intended the use of such Principal Property by the
lessee will be discontinued), which was or is owned by the
Guarantor or a Restricted Subsidiary and which has been or is to
be sold or transferred by the Guarantor or a Restricted
Subsidiary, more than 180 days after the completion of
construction and commencement of full operation thereof by the
Guarantor or such Restricted Subsidiary, to such lender or
investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such
Principal Property (herein called a "Sale and Leaseback
Transaction") unless:-
(1) the Guarantor or such Restricted Subsidiary would
(at the time of entering into such arrangement) be entitled
pursuant to sub-paragraphs (a) through (h) of paragraph (1) of
Clause (B) above, without equally and rateably securing all sums
payable at that time or thereafter under this Agreement, to
incur Debt secured by a Lien on such Principal Property; or
(2) such Sale and Leaseback Transaction relates to a
landfill or other waste disposal site (excluding any plant or
similar facility located thereon) owned by the Guarantor, the
relevant Borrower or such Restricted Subsidiary or which the
Guarantor, the relevant Borrower or such Restricted Subsidiary
has the right to use; or
(3) the Attributable Debt of the Guarantor and its
Restricted Subsidiaries in respect of such Sale and Leaseback
Transaction and all other Sale and Leaseback Transactions
entered into after the date of this Agreement (other than such
Sale and Leaseback Transactions as are permitted by paragraph
(1), (2) or (4) of this Clause (C)), plus the aggregate
principal amount of Debt secured by Liens on Principal
Properties then outstanding (excluding any such Debt secured by
Liens covered in sub-paragraphs (a) through (h) of paragraph (1)
of Clause (B)) which do not equally and rateably secure such
sums, would not exceed ten per cent. (10%) of Consolidated Net
Tangible Assets; or
(4) the Guarantor, within 180 days after the sale or
transfer, applies or causes a Restricted Subsidiary to apply an
amount equal to the greater of the net proceeds of such sale or
transfer or fair market value of the Principal Property so sold
and leased back at the time of entering into such Sale and
Leaseback Transaction (in either case as determined by the Board
of Directors of the Guarantor) to the repayment or prepayment of
Advances or to the retirement of other indebtedness of the
Guarantor (other than Indebtedness subordinated to the
obligations of the Guarantor under this Agreement) or
indebtedness of a Restricted Subsidiary, for money borrowed,
having a stated maturity more than 12 months from the date of
such application or which is extendible at the option of the
obligor thereon to a date more than 12 months from the date of
such application, provided that the amount to be so applied
shall be reduced by the principal amount of any such
indebtedness of the Guarantor or a Restricted Subsidiary
voluntarily retired by the Guarantor or a Restricted Subsidiary
within 180 days after such sale or transfer. Notwithstanding
the foregoing, no retirement referred to in this paragraph (4)
may be affected by payment at maturity.
Notwithstanding the foregoing, where the Guarantor or any
Restricted Subsidiary is the lessee in any Sale and Leaseback
Transaction, Attributable Debt shall not include any Debt
resulting from the Guarantee by the Guarantor or any other
Restricted Subsidiary of the lessee's obligation thereunder if
the lessee's obligation is included in Attributable Debt.
(D) Disposals: the Guarantor will not, and will ensure that
its Subsidiaries will not, (whether by a single transaction or
a number of related transactions and whether or not at one time
or over a period of time) sell or otherwise dispose of all or
substantially all of the assets of the Guarantor and its
Subsidiaries taken as a whole.
(E) Merger and Consolidation: neither any of the Borrowers
nor the Guarantor shall merge into or consolidate with any
Person and they shall not permit any Person to merge into or
consolidate with either of them unless:-
(1) in case the relevant Borrower or the Guarantor
shall merge into or consolidate with another corporation, the
corporation formed by such consolidation or into which the
relevant Borrower or the Guarantor as the case may be is merged
or consolidated shall be a corporation organised and existing
under the laws of England (in the case of BFIA) or the laws of
the United States of America, any State thereof or the District
of Columbia (in the case of BFII, BFIE or the Guarantor) and, if
the Guarantor or the relevant Borrower are not the survivor,
such corporation shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the
Administrative Agent, in form satisfactory to the Majority
Banks, the due and punctual payment of all sums payable at that
time or thereafter under this Agreement and the performance of
every covenant of the relevant Borrower or the Guarantor, as the
case may be, contained in this Agreement to be performed or
observed; and
(2) immediately after giving effect to such transaction
and treating any Indebtedness which becomes an obligation of the
Guarantor, the relevant Borrower or a Subsidiary as a result of
such transaction as having been incurred by the Guarantor, the
relevant Borrower or such Subsidiary at the time of such
transaction, no Event of Default or Potential Event of Default
shall have occurred and be continuing;
provided that, in the event of a merger or consolidation of
the Guarantor, the undertaking of the Banks to make Advances to
the Borrowers shall cease to be in effect unless the Guarantor
is the surviving entity.
(F) Consolidated Net Worth: The Guarantor shall not permit
Consolidated Net Worth (i) to be less than $1,500,000,000 and
(ii) at any time during the fiscal year ending September 30,
1995 and each fiscal year thereafter to be less than an amount
equal to the sum of (A) the amount of Consolidated Net Worth
required under this Paragraph (F) for the immediately preceding
fiscal year plus (B) 25% of Consolidated Net Income for such
immediately preceding fiscal year; provided, however, the amount
of any foreign currency translation adjustment shall not be
included for purposes of determining Consolidated Net Worth; and
provided further, if Consolidated Net Income in any such preceding
fiscal year is less than zero, the amount to be aggregated for such
fiscal year shall be zero.
(G) Financial Statements and Other Information: the
Guarantor shall maintain a system of accounting in accordance
with generally accepted accounting principles and practices in
the United States of America and will furnish to the
Administrative Agent (with a sufficient number of copies for
each Bank):-
(1) as soon as available, and in any case within 120
days after the end of each fiscal year of the Guarantor, the
consolidated balance sheet of the Guarantor and its Subsidiaries
as of the close of such fiscal year, and the related
consolidated statement of income, consolidated statement of cash
flows and consolidated statement of retained earnings (or such
other related statements as the Guarantor shall prepare in
accordance with such principles and practices) for the Guarantor
and its Subsidiaries for such year, setting forth, in
comparative form, the corresponding figures from the preceding
fiscal year, certified by independent public accountants
selected by the Guarantor;
(2) as soon as available, and in any case within 60
days after the end of each of the first three fiscal quarters of
each fiscal year of the Guarantor, and signed by an authorised
financial officer of the Guarantor, the consolidated balance
sheet of the Guarantor and its Subsidiaries as at the end of
such quarter and the related consolidated statement of income
for such fiscal quarter and fiscal year to date and consolidated
statement of cash flows for such fiscal year to date (or such
other related statements as the Guarantor shall prepare in
accordance with generally accepted accounting principles and
practice in the United States of America) for the Guarantor and
its Subsidiaries for such fiscal quarter and for the fiscal year
to date ;
(3) at the time of each delivery of a balance sheet
pursuant to the foregoing paragraphs (1) and (2), a certificate
of an authorised financial officer of the Guarantor stating that
no Event of Default or Potential Event of Default shall have
occurred and be continuing, and setting forth computations in
reasonable detail showing, as at the date of such balance sheet,
whether or not there was compliance with the financial covenant
contained in Clause (F) above;
(4) promptly after their becoming available, (a) copies
of all financial statements, reports and proxy statements which
the Guarantor shall have sent to its stockholders generally; and
(b) copies of all registration statements (other than
registration statements on Form S-8 or any successor form) and
regular and periodic reports (other than reports on Form 11-K or
any successor form), if any, which the Guarantor or any of the
Borrowers shall have filed with the Securities and
Exchange Commission, the Stock Exchange or any governmental
agency or agencies substituted therefor, or any similar or
corresponding governmental department, commission, board, bureau
or agency, federal, state or foreign, or (except for routine
listing applications) with any securities exchange, provided
that these obligations do not extend to documents filed and not
available for public inspection; and
(5) such other information relating to the performance
of the provisions of this Agreement by any of the Borrowers and
the Guarantor or to the business and financial position of the
Guarantor and its Subsidiaries as the Administrative Agent or
any Bank (through the Administrative Agent) may from time to
time reasonably request including, without limitation,
information concerning material legal proceedings and such legal
opinions and/or other documents relevant in the context of or
relating to this Agreement as the Administrative Agent may
reasonably request; and
(6) promptly after a financial officer becomes aware
thereof and provided the same has been made publicly available,
each change in the rating given by either Standard & Poor's,
Moody's or Duff & Phelps to any outstanding senior indebtedness
of the Guarantor.
(H) Payment of Taxes: each of the Borrowers and the
Guarantor will pay and discharge, and cause each Subsidiary to
pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon either of them or upon their
income or profits, or upon any property belonging to them, prior
to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien or charge upon any
material property of the relevant Borrower, the Guarantor or
such Subsidiary not permitted by paragraph (B)(1)(a) above,
provided that neither the Borrowers, the Guarantor nor any such
Subsidiary shall be required to pay any such tax, assessment,
charge, levy or claim the payment of which is being contested in
good faith and by proper proceedings and in respect of which the
relevant Borrower or the Guarantor, as the case may be, has
provided adequate reserve in its books.
(I) Insurance: to the extent such insurance shall be
available on commercially reasonable terms, each of the
Borrowers and the Guarantor shall, and shall cause its
Subsidiaries to, keep adequately insured by financially sound
and reputable insurers, or by way of adequate self-insurance,
all risks of loss of a character usually insured by corporations
of comparable size and financial strength and with comparable
risks.
(J) Maintenance of Existence: subject to Clause (E) each of
the Borrowers and the Guarantor will:-
(1) preserve and maintain its corporate existence in
good standing if failure to do so could have a Material Adverse
Effect on the Group;
(2) qualify and remain qualified to do business as a
foreign corporation in each jurisdiction in which the character
of the properties owned or leased by it therein or in which the
transaction of its business is such that failure to qualify has
or could have a Material Adverse Effect on the Group.
(K) Compliance with Applicable Laws: each of the Borrowers
and the Guarantor will comply, and cause each Subsidiary to
comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority of England,
the United States of America or such other jurisdiction to which
they or any Subsidiary may be subject, a breach of which has or
could have a Material Adverse Effect on the Group and, without
prejudice to the generality of the foregoing, the relevant
Borrower will not apply the proceeds of any Advance in such a
way that would result in the violation by the Guarantor or any
Bank of the provisions of Regulations U, T, G or X.
(L) Notices of Default: each of the Borrowers and the
Guarantor will furnish to the Administrative Agent, immediately
upon becoming aware of the existence of any Event of Default or
Potential Event of Default, a written notice specifying the
nature and period of existence thereof and what action the
relevant Borrower or the Guarantor is taking or proposes to take
with respect thereto.
(M) Inspection: each of the Borrowers and the Guarantor
shall permit an authorised representative or representatives of
the Administrative Agent or any of the Banks to visit and
inspect at all reasonable times, at the risk and expense of the
inspecting party, any of the properties of the Guarantor, the
Borrowers or their respective Subsidiaries, including its books,
and to make extracts therefrom (subject to any confidentiality
agreements, copyright laws and similar requirements) and to
discuss the affairs, finances, and accounts of the Guarantor,
the Borrowers or their respective Subsidiaries with its officers
and employees.
(N) Prior Approval to Variation of Offer: there will be no
amendments, addition to, revision, renewal or waiver of the
Offer and/or all or any of the terms and conditions of the Offer
without the prior approval of the Arranger. Such approval will
not be unreasonably withheld.
(O) Compliance with Regulations/Purchases: the Offer will
comply with The City Code on Take-overs and Mergers. In
addition BFIA and the Guarantor will not and will ensure that no
Person acting in concert with either of them will acquire any
shares in Attwoods at a price higher than that price per share
under the Offer at that time without the prior approval of the
Arranger and they will each comply in all respects with The City
Code on Take-overs and Mergers.
(P) Compulsory Acquisitions: as and when it is entitled to
do so, BFIA will promptly take all necessary action to exercise
all rights it may have under Sections 428 to 430F of the
Companies Act 1985 to acquire those shares in Attwoods not
already acquired by it.
(Q) Releases etc: BFIA will ensure that, promptly after the
issue thereof, there are delivered to the Administrative Agent
enough copies for the Banks of the Offer Document, any
amendment, addition to, revision or renewal of the Offer and any
press release or other announcement at any time by or on behalf
of BFIA in relation to the Offer.
(R) Prior Approval of References to Banks etc.: BFIA and
the Guarantor shall ensure that, before the issue of any
document or the making of any announcement referred to in
sub-clause (P), any reference therein to the Facility or all or
any of the Banks and the Administrative Agent shall have been
approved by the Arranger, such approval not to be unreasonably
withheld.
20 EVENTS OF DEFAULT
The following are Events of Default:-
(A) Non-Payment: the Borrowers or the Guarantor do not pay
in the manner provided in this Agreement (1) any principal
payable under it when due or (2) any other sum payable under it
within three Business Days after notice of that non-payment has
been given to it by the Administrative Agent.
(B) Breach of Representation or Warranty: any
representation, warranty or statement by or on behalf of any of
the Borrowers or the Guarantor in this Agreement or in any
document, certificate or financial statement delivered in
connection with it proves to have been incorrect, in any
material respect when made and the same remains incorrect for a
period of 30 days after the earlier of written notice of such
circumstance shall have been given to the relevant Borrower or
the Guarantor, as the case may be, by the Administrative Agent
or any Bank or discovery of such circumstance by the senior
financial officer or senior operating officer of the relevant
Borrower or the Guarantor as the case may be; or
(C) Breach of Undertaking: any of the Borrowers or the
Guarantor does not comply with its obligations under Clause
19(D), (E), (F) or (J)(1); or
(D) Breach of Other Obligation: any of the Borrowers or
the Guarantor does not perform or comply with any one or more of
its other obligations under this Agreement or the Commitment
Letter, and such failure shall remain unremedied for a period of
30 days after the earlier of written notice of such failure
shall have been given to the relevant Borrower or the Guarantor,
as the case may be, by the Administrative Agent or any Bank or
discovery of such failure by the senior financial officer or senior
operating officer of the relevant Borrower; or
(E) Cross Default: any of the Borrowers, the Guarantor or
any of their respective Subsidiaries shall (a) default in the
payment of any Indebtedness of the relevant Borrower, the
Guarantor or such Subsidiary (as the case may be), or any
interest or premium thereon, when due whether by acceleration or
otherwise beyond any period of grace provided with respect
thereto or (b) default in the performance or observance of any
obligation or condition with respect to such other Indebtedness
if such default causes the holder of such Indebtedness or any
Person acting on such holder's behalf to accelerate the maturity
thereof (provided that if such default or failure shall be cured
or waived by the holders of such Indebtedness, in each case as
may be permitted by the indenture, agreement or instrument
evidencing such Indebtedness, then the Event of Default
hereunder by reason thereof shall be deemed likewise to have
been thereupon cured or waived), if in the case of any defaults
described in clauses (a) and (b) of this Clause (E), the
aggregate principal amount of all such Indebtedness for which
all such defaults shall have occurred and be continuing exceeds
$25,000,000; provided, however, a default for purposes of this
Clause (E) shall not be deemed to exist by reason of the
acceleration of the maturity of any such obligation to a Bank or
an affiliate (within the meaning of Regulation U) of a Bank
solely by reason of a default in the performance of a term or
condition in any agreement or instrument under or by which such
obligation is created, evidenced or secured, which term and
condition restricts the right of the relevant Borrower, the
Guarantor or any other Person to sell, pledge or otherwise
dispose of any margin stock (within the meaning of Regulation U)
held by the relevant Borrower, the Guarantor or such other
Person; or
(F) Inability to Pay Debts: any of the Borrowers, the
Guarantor or any Principal Subsidiary shall admit in writing its
inability to pay, or generally shall not be paying, its debts as
such debts become due; or
(G) Involuntary Winding up: (a) the presentation to a
court having jurisdiction in the premises of a petition (i)
seeking a decree or order for relief in respect of the relevant
Borrower, the Guarantor or any Principal Subsidiary in an
involuntary case or proceeding under any applicable English,
United States Federal or State bankruptcy, insolvency,
reorganisation or other similar law, (ii) seeking a decree or
order adjudging the relevant Borrower, the Guarantor or any
Principal Subsidiary a bankrupt or insolvent, (iii) seeking
reorganisation, arrangement, adjustment or composition of or in
respect of the relevant Borrower, the Guarantor or any Principal
Subsidiary under any applicable English, United States Federal
or State law, or (iv) seeking the appointment of a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the relevant Borrower, the Guarantor or any
Principal Subsidiary or of any substantial part of its Assets,
or the Winding Up of its affairs, and in any such case such
petition remaining unstayed or not having been dismissed for a
period of 90 consecutive days or (b) a decree, order or other
judgment of the court is entered in respect of any of the
remedies, reliefs or other matters for which any petition
referred to in (a) above is presented; or
(H) Voluntary Winding up: the commencement by any of the
Borrowers, the Guarantor or any Principal Subsidiary of a
voluntary case or proceeding under any applicable English,
United States Federal or State bankruptcy, insolvency,
reorganisation or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in
respect of the relevant Borrower, the Guarantor or any Principal
Subsidiary in an involuntary case or proceeding under any
applicable English, United States Federal or State bankruptcy,
insolvency, reorganisation or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or
consent seeking reorganisation or relief under any applicable
English, United States Federal or State law, or the Consent by
the relevant Borrower, the Guarantor or any Principal Subsidiary
to the filing of such petition or to the appointment of or the
taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the
relevant Borrower, the Guarantor or any Principal Subsidiary or
of any substantial part of its Assets, or the making by it of a
general assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action
by the board of directors or the stockholders of the relevant
Borrower, the Guarantor or any Principal Subsidiary in
furtherance of any such action; or
(I) Enforcement Proceedings: any of the Borrowers, the
Guarantor or any Principal Subsidiary shall suffer the entry of
a final judgment or judgments for the payment of money in excess
of $25,000,000 in aggregate against it and the same shall not be
discharged (or provision made for its discharge) or a stay of
execution thereof shall not be procured, within the appeal time
provided by law or rules of the court and the relevant Borrower,
the Guarantor or such Principal Subsidiary, as the case may be,
shall not, within said period, or such longer period during
which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during
such appeal; or
(J) ERISA: any finding or determination shall be made with
respect to a Plan under Section 4041(c) or (e) of ERISA, or any
fact or circumstance shall occur with respect to a Plan which,
in the opinion of the Majority Banks, provides grounds for the
commencement of any proceeding under Section 4042 of ERISA, or
any proceeding shall be commenced with respect to a Plan under
Section 4042 of ERISA, or any Plan termination or any full or
partial withdrawal from a Plan or Plans shall occur which could
result in liability of the Guarantor or any Principal Subsidiary
to the Pension Benefit Guaranty Corporation or to the Plan or Plans
in the aggregate amount of $20,000,000 or more, or the actuarial
present value of unfunded vested benefits under all Plans shall
exceed $50,000,000; or
(K) Illegality: it is unlawful for the Borrower and/or the
Guarantor to perform its obligations to pay any sum payable by
it under this Agreement; or
(L) Ownership of BFIA, BFIE and BFII: BFIA, BFIE, or BFII
(or its successor pursuant to any merger or consolidation
permitted pursuant to Clause 19(E)) ceases to be wholly-owned
and Controlled by the Guarantor; or
(M) Guarantee: the Guarantee by the Guarantor of the
obligations of the Borrowers in respect of the Facility is not
(or is claimed by the Guarantor not to be) in full force and
effect; or
(N) Analogous Events: any event occurs which, under the law
of any relevant jurisdiction, has an analogous or equivalent
effect to any event mentioned in sub-clause (G), (H) or (I).
If at any time and for any reason (whether within or beyond the
control of any party to this Agreement):-
(1) either of the Events of Default specified in Clause (G)
or (H) occurs; or
(2) any other Event of Default mentioned above occurs and,
while such Event of Default is continuing, the Administrative
Agent, having been so instructed by the Majority Banks, by
notice to the Borrowers shall so declare, the Commitments
shall immediately be cancelled and/or all Advances, accrued
interest thereon and any other sum then payable under this
Agreement shall automatically become and be immediately due and
payable without presentment, demand, protest, notice of intent
to accelerate, notice of acceleration or other notice of any kind
to either the Borrowers or the Guarantor, or any other Person,
all of which are hereby expressly waived by the Borrowers and
the Guarantor.
21 DEFAULT INTEREST
(A) Interest on Overdue Sums: Subject to the provisions of
Clause 30(B) if any of the Borrowers do not pay any sum payable
under this Agreement when due, it shall pay interest on the
amount from time to time outstanding in respect of that overdue
sum for the period beginning on its due date and ending on the
date of its receipt by the Administrative Agent (both before and
after judgment) in accordance with this Clause 21. For the
purposes of this Clause 21, any payment received by the
Administrative Agent after the time due on the due date but
which is received too late to be made available on that day by
the Administrative Agent to the Banks pursuant to Clause 17(D)
shall be deemed to be received on the next Business Day (although
credit will be given by the Administrative Agent to the relevant
Borrower for any overnight interest earned by it on such moneys pending
payment thereof to the Banks).
(B) Default Interest Periods and Rates:
(1) In the case of a LIBOR Advance, CD Advance or any other sum
payable hereunder (other than in connection with a Base Rate
Advance), default interest shall be calculated and payable by
reference to successive Interest Periods, each of which (other
than the first, which shall begin on the due date) shall begin
on the last day of the previous one. Each such Interest Period
shall be of three months or such shorter period as the
Administrative Agent may from time to time select and notify to
the Banks and the rate of interest applicable for a particular
Interest Period or part thereof shall be the rate per annum
equal to the sum of one per cent. (1%) and the rate which would
be applicable to that overdue sum for that Interest Period under
Clause 6(B) if that overdue sum were a non-overdue LIBOR Advance
or CD Advance, as the case may be, except that:-
(a) subject to the following exceptions, until the third
Business Day after the Administrative Agent becomes aware of the
relevant default, each Interest Period relating to the relevant
overdue sum shall be an "overnight" period beginning on one
Business Day and ending on the next and the rate of interest for
a particular "overnight" period shall be the rate per annum
equal to the sum of 1%, the Applicable Margin, the Associated
Costs (if the overdue sum is denominated in Sterling) and the
arithmetic mean (rounded up, if necessary, to the next 1/16%) of
the respective rates quoted by each Reference Bank to the
Administrative Agent on request as the rate at which it is
offering "overnight" deposits in the currency of that overdue
sum for that period in amounts comparable to that overdue sum;
(b) if the overdue sum is of principal of a LIBOR Advance or
CD Advance and becomes due otherwise than on the Repayment Date
relating to that LIBOR Advance or CD Advance, the first default
Interest Period applicable to that overdue sum shall end on that
Repayment Date and the rate of interest applicable to that sum
for that Interest Period shall be the rate per annum equal to
the sum of one per cent. (1%) and the rate applicable to it
immediately before it became due; and
(c) if any of the events mentioned in Clause 14(A) occurs in
relation to any Interest Period applicable to an overdue sum,
the rate of interest payable on each Person's share of that sum
for that Interest Period or part thereof shall be the sum of one
per cent. (1%) and the rate as set by operation of Clause 14.
(2) In the case of a Base Rate Advance, such interest shall be
calculated at the rate per annum equal to the sum of one per
cent. (1%) and the rate which would be applicable to that
overdue sum under Clause 6(B) if that overdue sum were a Base
Rate Advance and shall be payable on demand.
(C) Payment and Compounding of Default Interest: Any interest
payable under this Clause 21 which is not paid when due in
accordance with Clauses 6(E) and (F), as the case may be, shall,
to the extent permitted by Applicable Laws, be added to the
overdue sum and itself bear interest accordingly.
Notwithstanding the foregoing, in no event shall the
compensation payable under this Clause 21 (to the extent, if
any, constituting interest under Applicable Laws) together with
all amounts constituting interest under Applicable Laws and
payable in connection with this Agreement exceed the Highest
Lawful Rate or the maximum amount of interest permitted to be
charged by Applicable Laws.
22 INDEMNITIES
(A) General Indemnity: Each of the Borrowers and the Guarantor
(each an "Indemnifying Party") jointly and severally shall
indemnify the Administrative Agent, the Arranger, each Bank and
each affiliate thereof and their respective directors, officers,
employees and agents (each an "Indemnified Party") from, and
hold each of them harmless against, any and all losses,
liabilities, claims, damages or reasonable expenses to which any
of them may become subject or which any of them may have
incurred, insofar as such losses, liabilities, claims, damages
or reasonable expenses arise out of or result from (i) the Offer
(whether or not made) or any acquisition or proposed acquisition
by any member of the Group or any person acting in concert with
any member of the Group of any shares of Attwoods or (ii) this
Agreement or any actual or proposed use by any of the Borrowers
of the proceeds of any extension of credit by any Bank hereunder
or breach by any Indemnifying Party of this Agreement or any
other documents executed in connection with this Agreement or
(iii) any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating
to the foregoing, and such Indemnifying Party shall reimburse
each Indemnified Party upon demand for any expenses (including
legal fees or, if such Indemnified Party shall use in-house
counsel instead, the allocated cost of internal counsel)
reasonably incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence
or willful misconduct of the Indemnified Party. Promptly after
receipt by any Indemnified Party of notice of the commencement
of any investigation, litigation or proceeding in respect of
which indemnity may be sought from such Indemnifying Party under
this Clause 22(A), such Indemnified Party will notify each
Indemnifying Party in writing of the commencement thereof.
Subject to the provisions hereinafter stated, each Indemnifying
Party shall be entitled to participate in, and may, if it so
elects, upon delivery to each of the Banks of a written
undertaking by each Indemnifying Party in form and substance
acceptable to the Administrative Agent that each Indemnifying
Party will not contest the rights of the Indemnified Party to
indemnification in connection with such investigation,
litigation or proceeding, maintain or assume the defence of any
such investigation, litigation or proceeding (including the
employment of counsel, who shall be counsel satisfactory to each
Indemnified Party involved therein, whether or not as a party),
and the payment of expenses thereof. If the defence of such
investigation, litigation or proceeding is assumed by the
Indemnifying Parties, each Indemnified Party shall have the
right to employ separate counsel and to participate in the
defence thereof but the reasonable fees and expenses of such
counsel shall not be at the expense of the Indemnifying Parties
unless the employment of such counsel has been specifically
authorised in writing by the relevant Indemnifying Party.
Notwithstanding the foregoing, the Administrative Agent shall at
any time have the right to employ counsel to represent such
Indemnified Parties in any such investigation, litigation or
proceeding if, in the reasonable judgment of the Administrative
Agent, such is advisable, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the relevant
Indemnifying Party, it being understood, however, that the
Indemnifying Parties shall not, in connection with any one such
action or separate but substantially similar or related actions
in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys for all
Indemnified Parties. The Indemnifying Parties shall not be
liable to indemnify any Person for any settlement of such action
effected without the Indemnifying Party's consent. Without
limiting any provision of this Agreement, it is the express
intention of the parties hereto that each Person to be
indemnified hereunder shall be indemnified and held harmless
against any and all losses, liabilities, claims or damages
arising out of or resulting from the ordinary, sole or
contributory negligence of such Person. Without prejudice to
the survival of any other obligations of the Indemnifying Party
hereunder, the obligations of the Indemnifying Parties under
this Clause 22(A) shall survive the termination of this
Agreement.
(B) Miscellaneous Indemnities: Notwithstanding the generality
of Clause 22(A) the Borrowers and the Guarantor shall jointly
and severally on demand indemnify the Administrative Agent and
each Bank against any funding or other cost, loss, expense or
liability (including loss of the Applicable Margin) sustained or
incurred by it as a result of:-
(1) an Advance not being made by reason of non-fulfilment of
any of the conditions in Clause 3 or 4(A), or not being made in
the Alternate Currency requested by the relevant Borrower by
reason of the operation of Clause 7(E),or not being made by
reason of the relevant Borrower purporting to revoke a Notice of
Drawing;
(2) the occurrence or continuance of any Event of Default or
Potential Event of Default; or
(3) the receipt or recovery by any party (or the
Administrative Agent on its behalf) of all or any part of an
Advance or overdue sum otherwise than on the last day of an
Interest Period or on a Quarter Date or a Repayment Date, as the
case may be, relating to that Advance or overdue sum.
The relevant Bank shall certify to the Borrowers the amount
required so to indemnify such Bank and shall provide reasonable
detail of the basis for the calculation of such amount.
(C) Broken Funding Costs: In respect of a LIBOR Advance or CD
Advance the amount payable in the case of Clause 22(B)(1) and
(3) above shall in any event include the amount (if any) by
which:-
(1) the amount of interest which the relevant Person is able
to obtain by placing an amount equal to its share of the
relevant Advance or overdue sum on deposit in the Inter-bank
Market, for the remainder of the relevant Interest Period, as
soon as reasonably practicable after it becomes aware of the
relevant event referred to in Clause 22(B)(1) or (3);
is less than:-
(2) the amount of interest which, in accordance with the
expressed terms of this Agreement, would otherwise be payable to
that Person on its share of that Advance for the relevant
Interest Period or (as the case may be) on the relevant amount
so received or recovered for the remainder of the relevant
Interest Period.
(D) Currency Indemnity:
(1) In respect of any sum payable by the Borrowers or the
Guarantor under or in connection with this Agreement, including
damages, the currency specified in Clause 17(C) in respect of
that sum (the "Currency of Account") shall be the sole currency
of account and payment.
(2) Any amount received or recovered in a currency other
than the relevant Currency of Account (whether as a result of,
or of the enforcement of, a judgment or order of a court of any
jurisdiction, in the Winding-up of any of the Borrowers or the
Guarantor or otherwise) by the Administrative Agent or any Bank
in respect of any sum expressed to be due to it from the
Borrowers or the Guarantor under this Agreement shall only
constitute a discharge to the relevant Borrower and the
Guarantor to the extent of the amount in that Currency of
Account which the recipient is able, in accordance with its
usual practice, to purchase with the amount so received or
recovered in that other currency on the date of that receipt or
recovery (or, if it is not practicable to make that purchase on
that date, on the first date on which it is practicable to do
so).
(3) If that amount in that Currency of Account is less than
the amount expressed to be due to the recipient under this
Agreement, each of the Borrowers and the Guarantor shall
indemnify it against any loss sustained by it as a result. In
any event, each of the Borrowers and the Guarantor shall
indemnify the recipient against the cost of making any such
purchase. For the purpose of this Clause 22(D), it will be
sufficient for the Administrative Agent or Bank, as the case may
be, to demonstrate in reasonable detail that it would have suffered
a loss had an actual exchange or purchase been made.
(E) Indemnities Separate: Each of the indemnities in this
Agreement 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 indulgence granted by the Administrative
Agent or any Bank and shall continue in full force and effect
despite any judgment, order, claim or proof for a liquidated
amount in respect of any sum due under this Agreement or any
other judgment or order.
Notwithstanding the foregoing, in no event shall the
compensation payable under this Clause 22 (to the extent, if
any, constituting interest under Applicable Laws) together with
all amounts constituting interest under Applicable Laws and
payable in connection with this Agreement exceed the Highest
Lawful Rate or the maximum amount of interest permitted to be
charged by Applicable Laws.
23 THE ADMINISTRATIVE AGENT
(A) Appointment of Administrative Agent: Each Bank irrevocably
appoints the Administrative Agent to act as its agent for the
purpose of this Agreement and authorises it to take such action
and exercise such rights, powers and discretions as are
specifically delegated to it by this Agreement and such other
action, rights, powers and discretions as are reasonably
incidental. However, the Administrative Agent may not begin any
legal action or proceeding in the name of a Bank without its
consent. The relationship between the Administrative Agent and
the Banks is of agent and principal only. The Administrative
Agent shall not be a trustee for any Bank, nor an agent or
trustee for the Borrowers or the Guarantor, under or in relation
to this Agreement.
(B) Administrative Agent's Duties: The Administrative Agent
shall:-
(1) promptly send to each Bank details of each communication
received by it from the Borrowers or the Guarantor under this
Agreement, except that details of any communication relating to
a particular Bank shall be sent to that Bank only;
(2) promptly send to each Bank a copy of any legal opinion
delivered under this Agreement and of any document or
information received by it under Clause 19;
(3) subject to the other provisions of this Clause 23, act
in accordance with any instructions from the Majority Banks or,
if so instructed by the Majority Banks, refrain from exercising
a right, power or discretion vested in it under this Agreement;
and
(4) have only those duties, obligations and responsibilities
expressly specified in this Agreement.
(C) Administrative Agent's Rights: The Administrative Agent
may:-
(1) perform any of its duties, obligations and
responsibilities under this Agreement by or through its
personnel or agents;
(2) refrain from exercising any right, power or discretion
vested in it under this Agreement until it has received
instructions from the Majority Banks as to whether (and, if it
is to be, the way in which) it is to be exercised and shall in
all cases be fully protected when acting, or (if so instructed)
refraining from acting, in accordance with instructions from the
Majority Banks;
(3) treat (a) the Bank which makes available any share of an
Advance as the Person entitled to repayment of that share unless
all or part of it has been novated (or the Administrative Agent
has received notice of assignment of all or part of it) in
accordance with Clause 27(C) and (b) the offices set under a
Bank's name at the end of this Agreement (or, as the case may
be, set out in the relevant Novation Notice or notice of
assignment) as its U.S. Lending Office or U.K. Lending Office
(as the case may be) unless the Administrative Agent has
received from that Bank a notice of change of such Lending
Office in accordance with Clause 27(D). The Administrative
Agent may act on any such novation or notice until it is
superseded by a further novation or notice;
(4) refrain from doing anything which would or might in its
opinion be contrary to any law or Directive or otherwise render
it liable to any Person and may do anything which is in its
opinion necessary to comply with any law or Directive;
(5) assume that no Event of Default or Potential Event of
Default has occurred unless an officer of the Administrative
Agent, while active on the account of the Borrowers or the
Guarantor, acquires actual knowledge to the contrary; and
(6) refrain from taking any step (or further step) to
protect or enforce the rights of any Person under this Agreement
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 or liabilities
(including reasonable legal fees) which it would or might
sustain or incur as a result;
(7) rely on any communication, certificate, legal opinion or
other document believed by it to be genuine;
(8) rely as to any matter of fact which might reasonably be
expected to be within the knowledge of the relevant Borrower or
the Guarantor on a statement by or on behalf of the relevant
Borrower or the Guarantor;
(9) obtain and pay for such legal or other expert advice or
services as may to it seem necessary or desirable and rely on
any such advice;
(10) retain for its own benefit and without liability to
account any fee or other sum receivable by it for its own
account; and
(11) accept deposits from, lend money to, provide any
advisory or other services to or engage in any kind of banking
or other business with any party to this Agreement or any
subsidiary or associated company of any party, or any State
Agency (and, in each case, may do so without liability to
account).
(D) Exoneration of Administrative Agent Neither the
Administrative Agent nor any of its respective personnel or
agents shall be:-
(1) responsible for the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, statement,
projection, assumption or information in the Information
Memorandum, this Agreement or any notice or other document
delivered under or in connection with this Agreement;
(2) responsible for the execution, delivery, validity,
legality, adequacy, enforceability or admissibility in evidence
of this Agreement or any such notice or other document;
(3) obliged to enquire as to the occurrence or continuation
of an Event of Default or Potential Event of Default; or
(4) liable for anything done or not done by it or any of
them under or in connection with this Agreement save in the case
of its or their own negligence or wilful misconduct.
(F) Agent as Lender: The Administrative Agent shall have the
same rights and powers with respect to its Commitment and share
of the Advances (if any) as any other Bank and may exercise
those rights and powers as if it were not also acting as Agent.
(G) Non-Reliance on the Administrative Agent: Each Bank
confirms that it has itself been, and will at all times continue
to be, solely responsible for making its own independent
investigation and appraisal of the business, financial position,
prospects, creditworthiness, status and affairs of any of the
Borrowers and the Guarantor and their respective Subsidiaries
and has not relied, and will not at any time rely, on the
Administrative Agent and/or any other Bank:-
(1) to provide it with any information relating to the
business, financial position, prospects, creditworthiness,
status or affairs of any of the Borrowers, the Guarantor or any
other Person, whether coming into its possession before or after
the making of any Advance (except, in the case of the
Administrative Agent, as stated in Clause 23(B)); or
(2) to check or enquire into the adequacy, accuracy,
completeness or reasonableness of any representation, warranty,
statement, projection, assumption or information at any time
provided by or on behalf of any of the Borrowers, the Guarantor
or any other Person
under or in connection with this Agreement (whether or not
that information has been or is at any time circulated to it by
the Administrative Agent), including any contained in the
Information Memorandum; or
(3) to assess or keep under review the business, financial
position, prospects, creditworthiness, status or affairs of any
of the Borrowers, the Guarantor or any other Person.
(H) Indemnity to the Administrative Agent: To the extent that
any of the Borrowers or the Guarantor do not do so on demand or
is not obliged to do so, each Bank shall on demand indemnify the
Administrative Agent in the proportion borne by its Outstandings
to all the Outstandings at the relevant time (or, if there are
then no Outstandings, in the proportion borne by its Commitment
to the total Commitments) against any cost, expense or liability
mentioned in Clause 25 or sustained or incurred by the
Administrative Agent in complying with any instructions from the
Majority Banks or otherwise sustained or incurred by it in
connection with this Agreement or its duties, obligations and
responsibilities under this Agreement except routine
administrative costs and expenses of the Administrative Agent or
to the extent that they are sustained or incurred as a result of
the negligence or wilful misconduct of the Administrative Agent
or any of its personnel or agents.
(I) Resignation and Removal of the Administrative Agent:
Notwithstanding the irrevocable appointments in Clauses 23(A)
and (I), the Administrative Agent may resign at any time (after
consultation with the Guarantor) if it gives at least 30 days'
notice to the Borrowers and the Banks and the Administrative
Agent may at any time be removed by the Majority Banks by giving
not less than 30 days' notice to the Administrative Agent and
the Borrowers. However, no resignation or removal shall be
effective until the successor has been appointed and accepted
its appointment in accordance with this Clause 23(I). The
Majority Banks may appoint a successor to the resigning or
removed Administrative Agent but, if the successor has not been
so appointed and accepted its appointment within 15 days after
the date of the notice of resignation or, as the case may be,
removal, the resigning Administrative Agent or, as the case may
be, the Guarantor may appoint a successor Administrative Agent,
which must be a reputable and experienced bank organised or
licensed under the laws of the United States or any state
thereof and having a combined capital and surplus of at least
$100,000,000. Any appointment of a successor must be in
writing, signed by the Person(s) appointing that successor and
delivered to that successor. Any acceptance of such appointment
must be in writing, signed by the Person appointed and delivered
to the Person(s) appointing that successor. The other parties
to this Agreement shall be promptly informed of the acceptance
by a successor Agent. Upon the successor accepting its
appointment, the resigning or, as the case may be, removed Agent
shall be automatically discharged from any further obligation
under this Agreement and its successor and each of the other
parties to this Agreement shall have the same rights and
obligations among themselves as they would have had if the
successor had been the original Agent party to this Agreement.
The resigning or, as the case may be, removed Agent shall
provide its successor with (or with copies of) such records as
its successor requires to carry out its duties under this
Agreement.
(J) Novation Notice: Each of the Borrowers, the Guarantor and
each Bank (except for a Bank voluntarily seeking the relevant
novation) irrevocably authorise the Administrative Agent to sign
each Novation Notice on their behalf.
24 SET-OFF/PRO RATA SHARING
(A) Set-Off: Each of the Borrowers and the Guarantor authorises
any other party to this Agreement to apply (without prior
notice) any credit balance (whether or not then due) to which it
is at any time beneficially entitled on any account at, any sum
held to its order by and/or any liability of, any office of that
party in or towards satisfaction of any sum then due from it to
that or any other party under this Agreement and unpaid and, for
that purpose, to convert one currency into another (but so that
nothing in this Clause 24(A) shall be effective to create a
charge). In the event that such party exercises its rights
under this Clause it shall notify the relevant Borrower or the
Guarantor as soon as reasonably practicable thereafter. No
party shall be obliged to exercise any of its rights under this
Clause, which shall be without prejudice 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).
(B) Pro Rata Sharing: If at any time the proportion received or
recovered (whether by direct payment, by exercise of any right
of set-off, combination of accounts or lien, or otherwise) by
any Bank in respect of the total sum which has become due to it
from the Borrowers and/or the Guarantor under this Agreement
before that time exceeds the proportion received or recovered by
the Bank(s) receiving or recovering the smallest proportion (if
any), then:-
(1) within 2 Business Days after receiving a request from
the Administrative Agent, that Bank shall pay to the
Administrative Agent an amount equal to the excess;
(2) the Administrative Agent shall promptly distribute that
payment as if it were made by the Borrowers or the Guarantor;
and
(3) as between the Borrowers, the Guarantor and the Banks,
that excess amount shall be treated as having been paid to the
Banks to which (and in the proportions in which) it is
distributed under (2) above, rather than as having been paid to
that Bank.
Within 2 Business Days after any Bank receives or recovers any
such sum otherwise than by payment through the Administrative
Agent, that Bank shall notify the Administrative Agent of the
amount and currency so received or recovered, how it was
received or recovered and whether it represents principal,
interest or other sums. If all or part of any amount so
received or recovered by that Bank has to be refunded by it
(with or without interest), each Bank to whom any part of that
amount has been distributed shall (within 2 Business Days after
receiving a request from that Bank) in turn pay to that Bank its
proportionate share of the amount to be refunded and of any
interest required to be paid by that Bank on that amount in
respect of all or any part of the period from the date of the
relevant distribution to the date of that payment to that Bank.
Any amount received or recovered by a Bank under a novation,
assignment, sub-participation (or the like) shall be ignored for
the purpose of this Clause 24(B). Furthermore, a Bank shall not
be obliged to share any amount which it has received or
recovered as a result of taking legal proceedings with any other
Bank which had an opportunity to participate in those legal
proceedings but did not do so and did not take separate legal
proceedings.
This Clause 24(B) shall apply, with any necessary modifications,
to any amount set-off under Clause 24(A) by any party to this
Agreement in respect of any sum due to any other party under
this Agreement.
25 EXPENSES AND STAMP DUTY
Whether or not any Advance is made under this Agreement, the
Borrowers shall pay:-
(A) Initial Expenses: promptly after demand, all costs and
expenses (including taxes thereon and legal fees (or, if such
party shall utilise in-house counsel instead, the allocated cost
of internal counsel)) (a) reasonably incurred by the
Administrative Agent and the Arranger in connection with the
preparation, negotiation or entry into of this Agreement and/or
(b) reasonably incurred by the Administrative Agent in
connection with any amendment of or waiver in respect of this
Agreement;
(B) Enforcement Expenses: on demand, all costs and expenses
(including taxes thereon and legal fees, including without
limitation the allocated cost of internal counsel) incurred by
the Administrative Agent or any Bank in protecting or enforcing
any rights under this Agreement and/or any such amendment or
waiver; and
(C) Stamp Duty: promptly, any stamp, documentary,
registration or similar Tax payable in the United Kingdom and
the United States of America in connection with the entry into,
performance, enforcement or admissibility in evidence of this
Agreement (other than any such tax arising as a result of any
assignment by a Bank pursuant to Clause 27 unless such
assignment is made pursuant to the operation of Clause 15)
and/or any such amendment or waiver, and shall indemnify the
Administrative Agent and the Banks against any liability with
respect to or resulting from any delay in paying or omission to
pay any such Tax.
Any demand for payment given under this Clause 26 shall be
accompanied by a certificate providing reasonable detail of the
relevant expenses or taxes.
26 CALCULATIONS AND EVIDENCE
(A) Basis of Calculation: All interest in respect of or in
connection with LIBOR Advances and CD Advances and fees due
hereunder shall accrue from day to day and shall be calculated
on the basis of a year of 365 days (in the case of Sterling) or
360 days (in any other case) and the actual number of days
elapsed and all interest in respect of or in connection with
Base Rate Advances shall accrue from day to day and shall be
calculated on the basis of a year of 365 days or 366 days
(except that interest calculated with reference to the Base CD
Rate or the Federal Funds Effective Rate shall be calculated on
the basis of a 360 day year only), as the case may be, and the
actual number of days elapsed.
(B) Loan Accounts: The entries made in the accounts maintained
by each Bank in accordance with its usual practice shall be
prima facie evidence of the existence and amounts of the
obligations of the Borrowers recorded in them save for manifest
error.
(C) Certificates Conclusive: A certificate by the
Administrative Agent, the Arranger or any Bank as to any sum
payable to it under Clause 11(B), 12, 13, 14, 16, 17(G), 21, 22,
23(H) or 25, and any other certificate, determination,
notification or opinion of the Administrative Agent, any Bank or
the Majority Banks, provided for in this Agreement, shall be
conclusive save for manifest error. Any such certificate as to
any sum shall set out the basis of computation of that sum in
reasonable detail.
27 NOVATION AND ASSIGNMENT
(A) Benefit and Burden of this Agreement: This Agreement shall
benefit and be binding on the parties, any New Bank in respect
of which a Novation Notice becomes effective in accordance with
Clause 27(C), any permitted assignee and their respective
successors. Any reference in this Agreement to any party shall
be construed accordingly.
(B) Borrowers and Guarantor: None of the Borrowers nor the
Guarantor may assign or transfer all or part of its rights or
obligations under this Agreement.
(C) Banks: Any Bank may at any time novate all or part of its
share of an Advance or all or any part of its Commitment (a) to
any other Bank or to any Qualifying Lender which is a holding
company or subsidiary of that Bank or a subsidiary of any such
holding company without the consent of any party or (b) to any
other Qualifying Lender with the consent of the Borrowers (such
consent not to be unreasonably withheld). However, no consent
shall be needed after any notice is sent under Clause 20(1) or
(2). Any such novation shall be made by delivering to the
Administrative Agent a duly completed and executed Novation
Notice together with a copy of the written consent of the
Borrowers (if applicable) to such novation. On receipt of such
a notice, the Administrative Agent shall countersign it for and
on behalf of itself and the other parties to this Agreement and
subject to the terms of that Novation Notice:-
(1) to the extent that in that Novation Notice the relevant
Bank seeks to novate its share of an Advance and/or its
Commitment, each of the Borrowers, the Guarantor and that Bank
shall each be released from further obligations to each other
and their respective rights against each other shall be
cancelled (such rights and obligations being referred to as
"discharged rights and obligations")
(2) each of the Borrowers, the Guarantor and the relevant
New Bank shall each assume new obligations towards each other
and/or acquire new rights against each other which differ from
the discharged rights and obligations only insofar as the
Borrowers, the Guarantor and that New Bank have assumed and
acquired the same in place of the Borrowers, the Guarantor and
that Bank and
(3) the New Bank and the other parties to this Agreement
(other than the Borrowers and the Guarantor) shall acquire the
same rights and assume the same obligations between themselves
as they would have acquired and assumed had that New Bank been
an original party to this Agreement as a Bank with the rights
and/or obligations acquired or assumed by it as a result of that
novation (and, to that extent, the original Bank and those other
parties shall each be released from further obligations to each
other).
Any Bank may at any time assign all or part of its rights under
this Agreement to any Person to whom it may novate such rights
and such assignment shall become effective when the
Administrative Agent has been notified of it by that Bank and
has received from the transferee an undertaking by the
transferee (addressed to all the parties to this Agreement) to
be bound by this Agreement and to perform the obligations
transferred to it. Any costs incurred by the Administrative
Agent, that Bank or its transferee in connection with the
preparation of that undertaking shall be borne by that Bank.
Any such assignee or transferee shall be treated as a Bank for
all purposes of this Agreement and shall be entitled to the full
benefit of this Agreement to the same extent as if it were an
original party in respect of the rights or obligations assigned
or transferred to it.
Notwithstanding anything to the contrary, any Bank may at any
time, without the consent of the relevant Borrower, assign and
pledge all or any portion of its Commitment and the Advances
owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Bank from its obligations
hereunder.
(D) Lending Offices: The Banks shall ensure that all Advances
to the Borrowers are made through a Lending Office that is a
Qualifying Lender. The initial U.K. Lending Office and U.S.
Lending Office of each Bank is set under its name at the end of
this Agreement. Any Bank may at any time change its U.K.
Lending Office or U.S. Lending Office in relation to all or a
specified part of its Commitment or Outstandings by notifying
the Administrative Agent of the fax number, telex number and
address of such new Lending Office.
(E) Reference Banks: If a Reference Bank ceases to have a
London office (with respect to LIBOR Advances) or a New York
office (with respect to CD Advances or Base Rate Advances) or
assigns all of its rights under this Agreement or if the
Commitment of any Reference Bank is cancelled under Clause 9(B)
or its share of any LIBOR Advance or any CD Advance made by it
is prepaid under Clause 8(B) or 12, it shall be replaced as a
Reference Bank by such other Bank with an office in London (or
New York as appropriate) as the Administrative Agent (after
consultation with the Borrowers) shall designate by notice to
the Borrowers and the Banks.
(F) Disclosure of Information: The Administrative Agent or any
Bank may disclose to a potential assignee or transferee or any
other Person proposing to enter into contractual arrangements
with any Bank in relation to this Agreement or an affiliate of
that Bank such information about the Borrowers, the Guarantor or
any Subsidiary as it may think fit, provided that prior to any
such disclosure each such potential assignee or transferee shall
agree to preserve the confidentiality of any non-public
information concerning the Borrowers, the Guarantor or any
Subsidiary disclosed to it.
28 REMEDIES, WAIVERS, AMENDMENTS AND CONSENTS
(A) No Implied Waivers; Remedies Cumulative: Time shall be of
the essence of this Agreement but no failure on the part of the
Administrative Agent or any Bank to exercise, and no delay on
its part in exercising, any right or remedy under this Agreement
will operate as a waiver thereof, nor will any single or partial
exercise of any right or remedy preclude any other or further
exercise thereof 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 (whether
provided by law or otherwise).
(B) Amendments, Waivers and Consents: Any provision of this
Agreement may be amended only if the Borrowers, the Guarantor
and the Majority Banks so agree in writing and any Event of
Default or Potential Event of Default may be waived before or
after it occurs only if the Majority Banks so agree in writing
but:-
(1) an amendment or waiver which changes or relates to (a)
the amount of the Available Facility or any Bank's Commitment or
Available Commitment, (b) the Final Maturity Date, (c) the
amount or currency of the Advances, (d) the amount or date of
any repayment thereof, (e) the length of Interest Periods, (f)
the rate or dates of payment of interest, (g) the amount or
date(s) of payment of any fee payable under Clause 10, (h) the
currency of any payment, (i) the Guarantor's guarantee and
indemnity, (j) the definition of "Majority Banks" or (k) this
Clause 28(B), shall require the agreement of all the Banks and
(in the case of an amendment) the Borrowers and the Guarantor
also; and
(2) an amendment or waiver which changes or relates to the
rights and/or obligations of the Administrative Agent shall
require its agreement also.
Any such waiver, and any consent by the Administrative Agent,
any Bank or the Majority Banks under any provision of this
Agreement, must be in writing and may be given subject to any
conditions thought fit by the Person giving that waiver or
consent. Any waiver or consent shall be effective only in the
instance and for the purpose for which it is given.
29 COMMUNICATIONS
(A) Addresses: Each communication under this Agreement shall be
made by fax, telex or otherwise in writing. Each communication
or document to be delivered to any party under this Agreement
shall be sent to that party at the fax number, telex number or
address from time to time designated by that party to the
Administrative Agent (or, in the case of the Administrative
Agent, by it to each other party) for the purpose of this
Agreement. The initial fax number, telex number, address and
Person (if any) so designated by the Borrowers, the
Administrative Agent and the Guarantor are set out under their
respective names at the end of this Agreement. Any
communication or document from or to the Borrowers or the
Guarantor shall be sent to, by or through the Administrative
Agent.
(B) Deemed Delivery: Any communication from the Borrowers or
the Guarantor shall be irrevocable, and shall not be effective
until received by the Administrative Agent. Any other
communication to any Person shall, if not actually received, be
deemed to be received by that Person (if sent by fax or telex)
on the next working day in the place to which it is sent or (in
any other case) when left at the address required by Clause
29(A) or five days after being despatched by registered mail (by
registered airmail if to another country) postage prepaid and
addressed to it at that address.
30 PARTIAL INVALIDITY
(A) Partial Invalidity: 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.
(B) Usury Not Intended: Each of the Borrowers, the Guarantor
and the Banks intend to strictly comply with all applicable
laws, including Applicable Laws. Accordingly, the provisions of
this Clause 30(B) shall govern and control over every other
provision of this Agreement and the Fee Letter, which conflicts
or is inconsistent with this Clause 30(B) even if such provision
declares that it controls (unless such provision expressly
identifies and refers to this Clause 30(B) and specifically
states that it will control over this Clause 30(B)). As used in
this Clause 30(B), the term "interest" includes the aggregate of
all charges which constitute interest under Applicable laws,
provided that, to the maximum extent permitted by Applicable
Laws, (a) any non-principal payment shall be characterized as an
expense or fee or something other than compensation for the use,
forbearance or detention of money and not as interest, and (b)
all interest at any time contracted for, reserved,
charged or received shall be amortized, prorated, allocated and
spread, in equal parts during the full term of the Advances. In
no event shall any of the Borrowers or any other Person be
obligated to pay, or any Bank have any right or privilege to
reserve, receive or retain, (a) any interest in excess of the
maximum amount of nonusurious interest permitted under
Applicable Laws, or (b) total interest in excess of the amount
which such Bank could lawfully have contracted for, reserved,
received, retained or charged had the interest been calculated
for the full term of the Advances at the Highest Lawful Rate.
On each day, if any, that the interest rate (the "Stated Rate")
called for under this Agreement or other related document
exceeds the Highest Lawful Rate, the rate at which interest
shall accrue shall automatically be fixed by operation of this
sentence at the Highest Lawful Rate (or, at any time no Highest
Lawful Rate shall exist, at the rate provided by Clause 21) for
that day, and shall remain fixed at the Highest Lawful Rate (or
at any time no Highest Lawful Rate shall exist, at the rate
provided by Clause 21) for each day thereafter until the total
amount of interest accrued equals the total amount of interest
which would have accrued if there were no such ceiling rate as
is imposed by this sentence. Thereafter, interest shall accrue
at the Stated Rate unless and until the Stated Rate again
exceeds the Highest Lawful Rate when the provisions of the
immediately preceding sentence shall again automatically operate
to limit the interest accrual rate. The daily interest rates to
be used in calculating interest at the Highest Lawful Rate shall
be determined by dividing the applicable Highest Lawful Rate per
annum by the number of days in the calendar year for which such
calculation is being made. None of the terms and provisions
contained in this Agreement or any other related document which
directly or indirectly relate to interest shall ever be
construed without reference to this Clause 30(B) or construed to
create a contract to pay for the use, forbearance or detention
of money at an interest rate in excess of the Highest Lawful
Rate. If the term of any Advance is shortened by reason of
acceleration of maturity as a result of any Event of Default or
other cause, or by reason of any required or permitted
prepayment, and if for that (or any other) reason any Bank at
any time (including but not limited to the stated maturity of
any Advance) is owed or receives (and/or has received) interest
in excess of interest calculated at the Highest Lawful Rate,
then and in any such event all of any such excess interest shall
be cancelled automatically as of the date of such acceleration,
prepayment or other event which produces the excess, and, if
such excess interest has been paid to a Bank, it shall be
credited pro tanto against the then-outstanding principal
balance of the relevant Borrower's obligations to such Bank,
effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted
or all of such principal has been fully paid and satisfied,
whichever occurs first, and any remaining balance of such excess
shall be promptly refunded to its payor.
31 NATURE OF RIGHTS AND OBLIGATIONS
(A) Liability Several: The liability of the Banks is several.
No party to this Agreement shall be responsible for the
obligations of any other party. The failure of a Bank to
perform its obligations shall not release any other party from
its obligations.
(B) Rights Several: The rights of the Banks are also several.
The amount at any time owing by any of the Borrowers to any
party under this Agreement shall be a separate and independent
debt from the amount owing to any other party.
(C) Continuation of Certain Obligations: The obligations of any
party under or in respect of Clause 11, 13, 21, 22, 23(H), 24
and 25 shall continue even after all the Commitments have
terminated and all the Advances have been repaid or prepaid.
32 COUNTERPARTS
This Agreement may be signed in any number of counterparts, all
of which taken together and when delivered to and accepted by
the Administrative Agent shall constitute one and the same
instrument. Any party may enter into this Agreement by signing
any such counterpart.
33 GOVERNING LAW AND JURISDICTION
(A) GOVERNING LAW: THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND.
(B) ENGLISH COURTS: FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT
AND EACH BANK, ALL THE PARTIES IRREVOCABLY AGREE THAT THE COURTS
OF ENGLAND ARE TO HAVE JURISDICTION TO SETTLE ANY DISPUTES WHICH
MAY ARISE OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THAT,
ACCORDINGLY, ANY LEGAL ACTION OR PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT ("PROCEEDINGS") MAY BE BROUGHT
IN THOSE COURTS AND EACH OF THE BORROWERS AND THE GUARANTOR EACH
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS.
(C) U.S. COURTS: WITHOUT PREJUDICE TO CLAUSE 33(B), THE
BORROWERS AND THE GUARANTOR EACH FURTHER IRREVOCABLY AGREE THAT
ANY PROCEEDINGS MAY BE BROUGHT IN ANY NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN NEW YORK CITY OR IN THE COURTS
OF THE STATE OF TEXAS AND SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF EACH SUCH COURT.
(D) OTHER COMPETENT JURISDICTION: NOTHING IN THIS CLAUSE 33
SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT AND/OR ANY
BANK TO TAKE PROCEEDINGS AGAINST THE BORROWERS OR THE GUARANTOR
IN ANY OTHER COURT OF COMPETENT JURISDICTION NOR SHALL THE
TAKING OF PROCEEDINGS IN ONE OR MORE JURISDICTIONS PRECLUDE THE
ADMINISTRATIVE AGENT AND/OR ANY BANK FROM TAKING PROCEEDINGS IN
ANY OTHER JURISDICTION, WHETHER CONCURRENTLY OR NOT.
(E) VENUE: THE BORROWERS AND THE GUARANTOR EACH IRREVOCABLY
WAIVE ANY OBJECTION WHICH IT MAY AT ANY TIME HAVE TO THE LAYING
OF THE VENUE OF ANY PROCEEDINGS IN ANY COURT REFERRED TO IN THIS
CLAUSE 33 AND ANY CLAIM THAT ANY SUCH PROCEEDINGS HAVE BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(F) SERVICE OF PROCESS:
(1) THE BORROWERS AND THE GUARANTOR EACH IRREVOCABLY APPOINTS
BFIA, BFI AND CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK,
NEW YORK 10019 TO
RECEIVE, FOR IT AND ON ITS BEHALF, SERVICE OF PROCESS IN ANY
PROCEEDINGS IN ENGLAND, TEXAS AND NEW YORK, RESPECTIVELY. SUCH
SERVICE SHALL BE DEEMED COMPLETED ON DELIVERY TO THE RELEVANT
PROCESS AGENT (WHETHER OR NOT IT IS FORWARDED TO AND RECEIVED BY
THE RELEVANT BORROWER OR THE GUARANTOR). IF FOR ANY REASON
EITHER PROCESS AGENT CEASES TO BE ABLE TO ACT AS SUCH OR NO
LONGER HAS AN ADDRESS IN LONDON, HOUSTON OR NEW YORK CITY, AS
THE CASE MAY BE, THE RELEVANT BORROWER AND THE GUARANTOR EACH
IRREVOCABLY AGREE TO APPOINT A SUBSTITUTE PROCESS AGENT
ACCEPTABLE TO THE ADMINISTRATIVE AGENT, AND TO DELIVER TO THE
ADMINISTRATIVE AGENT A COPY OF THE NEW AGENT'S ACCEPTANCE OF
THAT APPOINTMENT, WITHIN 30 DAYS.
(2) THE BORROWERS AND THE GUARANTOR EACH IRREVOCABLY CONSENT TO
ANY PROCESS IN ANY PROCEEDINGS ANYWHERE BEING SERVED BY MAILING
A COPY BY REGISTERED OR CERTIFIED PREPAID AIRMAIL POST TO IT IN
ACCORDANCE WITH CLAUSE 29. SUCH SERVICE SHALL BECOME EFFECTIVE
30 DAYS AFTER MAILING PROVIDED THAT PROOF OF RECEIPT CAN BE
SHOWN.
(3) NOTHING SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.
(G) CONSENT TO ENFORCEMENT ETC: THE BORROWERS AND THE GUARANTOR
EACH IRREVOCABLY AND GENERALLY CONSENT IN RESPECT OF ANY
PROCEEDINGS IN A COURT OF COMPETENT JURISDICTION TO THE GIVING
OF ANY LAWFUL RELIEF IN CONNECTION WITH THOSE PROCEEDINGS
INCLUDING, WITHOUT LIMITATION, THE MAKING, ENFORCEMENT OR
EXECUTION AGAINST ANY OF ITS OR ITS SUBSIDIARIES' ASSETS
(IRRESPECTIVE OF THEIR USE OR INTENDED USE) OF ANY FINAL AND
NON-APPEALABLE ORDER OR JUDGMENT WHICH MAY BE MADE OR GIVEN IN
THOSE PROCEEDINGS.
(H) TRIAL BY JURY WAIVED
(1) EACH OF THE BORROWERS AND THE GUARANTOR HERETO WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR
INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER.
(2) EACH OF THE BORROWERS AND THE GUARANTOR HERETO (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OR ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THIS WAIVER.
This Agreement has been entered into on the date stated at
the beginning.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
The Borrowers
BFIA
BFI ACQUISITIONS PLC
5 Roundwood Avenue
Stockley Park
Uxbridge, Middlesex UB11 1BX
Fax No.: (4481) 848 1289
Attention: Managing Director
By: EDWARD NORWOOD
BFII
BFI INTERNATIONAL, INC.
757 North Eldridge
Houston, TX 77079
Fax No.: (713) 870 7569
Attention: Corporate Secretary
By: HENRY HIRVELA
BFIE
BROWNING-FERRIS INDUSTRIES EUROPE, INC.
3500 GK Utrecht
Holland
Fax No.: (3130) 871292
Telex No.: 47364 bfie
Attention: Vice President - Law
By: HENRY HIRVELA
BFI
BROWNING-FERRIS INDUSTRIES, INC.
757 North Eldridge
Houston, TX 77079
Fax No.: (713) 870-7825
By: JEFFREY E. CURTISS
The Guarantor
BROWNING-FERRIS INDUSTRIES, INC.
757 N. Eldridge
Houston, TX 77079
Fax No.: (713) 870-7825
Attention: Corporate Secretary
By: JEFFREY E. CURTISS
The Administrative Agent
CREDIT SUISSE
Tower 49 - 12 East 49th Street
New York, NY 10017
Fax No.: (212) 238-5246/5247
Attention: Hazel Leslie, Loan Administration
By: ROBERT B. POTTER MATT MOSER
MEMBER OF SENIOR MANAGEMENT ASSOCIATE
The Arranger
CREDIT SUISSE
Tower 49 - 12 East 49th Street
New York, NY 10017
Fax No.: (212) 238-5246/5247
Attention: Hazel Leslie, Loan Administration
By: ROBERT B. POTTER MATT MOSER
MEMBER OF SENIOR MANAGEMENT ASSOCIATE
The Banks Commitment
CREDIT SUISSE 80,000,000 pounds
U.K. Lending Office
5 Cabot Square
London, E14 4QR
Fax No.: (4471) 888-8398
Attention: Client Services Unit
U.S. Lending Office
Tower 49 - 12 East 49th Street
New York, NY 10017
Fax No.: (212) 238-5246/5247
Attention: Hazel Leslie, Loan Administration
By: STEPHEN M. FLYNN MARIA N. GASPARA
MEMBER OF SENIOR MANAGEMENT ASSOCIATE
ABN-AMRO BANK N.V. 60,000,000 pounds
U.K. Lending Office
101 Moorgate
London EC2M 6SB
Fax No.: (4471) 588-2975
Telex No.: 887139 ABNALN G
Attention: Loan Administration Dept., Debbie Winchester
U.S. Lending Office
Three Riverway, Suite 1700
Houston, TX 77056
Fax No.: (713) 629 7533
Telex No.: 6868916 ABN INTL HOU
Attention: Ms. Patricia Baker
By: MIKE OAKES
By: L. DAVID WRIGHT
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION 60,000,000 pounds
U.K. Lending Office
26 Elmfield Road
Bromley Kent BR 11WA
Fax No.: (4481) 313-2392
Telex No.: 888412
Attention: Mr. Joy Baker
U.S. Lending Office
333 Clay Street #4550
Houston, TX 77002
Fax No.: (713) 651-4841
Attention: Ms. Phyllis Tennard
By: MELINDA H. NICKENS
DEUTSCHE BANK AG 60,000,000 pounds
U.K. Lending Office
6 Bishopsgate
London EC2P 2AT
Fax No.: (4471) 971-7924
Telex No.: 9401555
Attention: Mr. A. Richardson
U.S. Lending Office
31 West 52nd Street
New York, NY 10019
Fax No.: (212) 474-8212
Telex No.: 429166
Attention: Mr. John Quinn
By: DR. HANS-DIETER WETTLAUFER JEAN M. HANNIGAN
VICE PRESIDENT ASSISTANT VICE PRESIDENT
THE FUJI BANK, LIMITED 60,000,000 pounds
U.K. Lending Office
River Plate House
7-11 Finsbury Circus
London EC2M 7DH
Fax No.: (4471) 588-1400/759-0048
Attention: Mr. John Higgins
U.S. Lending Office
One Houston Centre
1221 McKinney Street, Suite 4100
Houston, TX 77010
Fax No.: (713) 759-0048
Attention: Ms. Jenny Lin
By: DAVID KELLEY
VICE PRESIDENT AND SENIOR MANAGER
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK 60,000,000 pounds
U.K. Lending Office
P.O. Box 161
60 Victoria Embankment
London EC4Y OJP
Fax No.: (4471) 325-8114/8127
Telex No.: 896631 MGTG
Attention: Ms. Gill Langley/
Ms. Stephanie Kerrigan
U.S. Lending Office
c/o J.P. Morgan Services, Inc.
500 Stanton-Christiana Road
Newark, DE 19713
Fax No: (302) 634-1094
Telex No.: 177615 MGT UT
Attention: Loan Department (MOF)
By: EDGAR SMITH
VICE PRESIDENT
NATIONSBANK OF TEXAS, N.A./
NATIONSBANK OF NORTH
CAROLINA, N.A. 60,000,000 pounds
U.K. Lending Office
Nationsbank of North Carolina N.A. - London Branch
35 New Broad Street
London EC2M 1NH
Fax No.: (4471) 628-8692
Attention: Loans Administration
By: STEWART M. KENNEDY
U.S. Lending Office
Nationsbank of Texas, N.A.
901 Main Street
14th Floor
Dallas, TX 75202
Fax No.: (214) 508 0944
Attention: Mr. Geri Lewis
By: F. HUNDLEY
CHEMICAL BANK 60,000,000 pounds
U.S. Lending Office
5th Floor
270 Park Avenue
New York, NY 10017
Fax No.: (212) 270-5844
Telex No.: 420120 CBC U1
Attention: Credit Administrative Unit
(cc: Julian Pitt at the UK
Lending office)
U.K. Lending Office
125 London Wall
London EC2Y 5AJ
Fax No.: (4471) 777-4727
Telex No.: 94060000
Attention: Mr. David Staples
By: DAVID STAPLES
VICE PRESIDENT
Total Commitments 500,000,000 pounds
SCHEDULE 1
Conditions Precedent
1. Payment to the Arranger, the Administrative Agent and the
Banks of all fees, costs and expenses then due.
2. Receipt of certified copies of the Offer Document in the
form previously approved by the Arranger.
3. The Office of Fair Trading indicating in terms satisfactory
to the Arranger that it is not the intention of the Secretary
of State for Trade and Industry to refer the proposed
acquisition of Attwoods by BFIA, or any matters arising
therefrom, to the Monopolies and Mergers Commission.
4. No government or other Agency has instituted or threatened
any action, legal proceedings, suit, inquiry or investigation
or enacted, made or proposed any statute, regulation or order
which in the opinion of the Arranger is likely to have any of
the effects mentioned in paragraphs (16) (a), (b) or (c) of
Clause 18(A). No other litigation, arbitration, administrative
proceedings, injunction or order is current, pending or
threatened or has been made which in the opinion of the
Majority Banks is likely to have any such effect.
5. No material adverse change in the financial position or
results of operations of the Group from that set forth in the
Information Memorandum.
6. All necessary corporate documents, board resolutions,
shareholders' resolutions and specimen signatures and certified
copies of the constitutional documents of the Borrowers and the
Guarantor.
7. All necessary Consents (whether in relation to the Offer
the Credit Agreement or otherwise) shall have been obtained.
8. Legal opinions from:
(A) Linklaters & Paines, English legal advisers to
the Arranger substantially in the form set out in Schedule 11;
(B) internal counsel of the Guarantor substantially
in form set out in Schedule 9;
(C) Fulbright & Jaworski, U.S. legal adviser to the
Borrowers and the Guarantor substantially in form set out in
Schedule 10; and
(D) Simmons & Simmons, English legal advisers to the
Borrowers and the Guarantor substantially in the form set out
in Schedule 8.
9. Certificates from each of the Borrowers and the Guarantor,
dated on or after the date of this Agreement, substantially in
the form set out in Schedules 6 and 7 respectively, duly
executed by a duly authorised officer of each of the Borrowers
and the Guarantor respectively, together with the documents stated
by the relevant certificate as being delivered with it.
10. No condition of the Offer having been waived in whole or
part and the Offer Document not having been amended, added to,
revised or renewed, in each case without the prior approval of
the Arranger and the Offer not having lapsed.
11. The Offer has become (or, but only if the Arranger has
given prior approval to such declaration, has been declared)
unconditional in all respects.
SCHEDULE 2
Notice of Drawing
To: The Administrative Agent
Attention: [ ]
500,000,000 pounds Revolving Credit Agreement dated [ ],
1994
We refer to the above Agreement between, inter alia,
ourselves, the Banks and yourselves as Administrative Agent.
Terms defined in that Agreement have the same meaning in this
notice.
We give you notice that we wish [EITHER] [a LIBOR Advance
of [insert currency and amount] to be made to us under that
Agreement on [ ], 19[ ] (or, if that is not a Business
Day, on the next Business Day). We elect for the Interest
Period relating to that LIBOR Advance to be of * [or, if that
election is ineffective, of ** months]***.
[OR] [a CD Advance of $[ ] to be made to us under that
Agreement on [ ], 19[ ] (or, if that is not a Business
Day, on the next Business Day). We elect for the Interest
Period relating to that CD Advance to be [30/60/90/180 days].]
[OR] [a Base Rate Advance of $[ ] to be made to us
under that Agreement on [ ], 19[ ] (or if that is not a
Business Day, on the next Business Day).]
The proceeds of that Advance are to be made available to us
by credit to [insert details of account in the Place of
Payment].
We confirm that no Event of Default or Potential Event of
Default has occurred and is continuing or will occur as a
result of making that Advance and that all warranties in Clause
18(A) of that Agreement [(except those in Clause 18(A)(13),
(15) and (16))]**** have been complied with and would be
correct in all material respects if repeated today and on the
day on which that Advance is made.
Dated ______________, 19___
[INSERT IDENTITY OF BORROWER]
By:______________________
* insert 1, 2, 3, 6, 9 or 12 months or 1 week in the case of
a Sterling Advance
** insert 1, 2, 3 or 6
*** insert only if 9 or 12 month Interest Period selected
**** delete for first Advance made under the Agreement
SCHEDULE 3
Novation Notice
To: Credit Suisse
[
]
Attention: [ ]
[Name of Borrower]
500,000,000 pounds Revolving Credit Agreement
dated [ ], 1994
1. This Novation Notice relates to the above Agreement. Terms
defined in the Agreement have the same meaning in this Novation
Notice.
2. The undersigned Existing Bank:-
(A) confirms that, to the extent details appear below under
the heading "Rights and/or Obligations to be Novated", those
details accurately summarise the rights and/or obligations
which are to be novated and which are, upon delivery of this
Novation Notice to the Administrative Agent (but subject to 3
below), cancelled and discharged in accordance with Clause
27(C) of the Agreement;
(B) confirms that any consent required in accordance with
Clause 27(C) of the Agreement has been obtained to this
novation; and
(C) gives notice to the undersigned New Bank that the
Existing Bank is under no obligation to repurchase all or any
part of those rights and/or obligations at any time nor to
support any losses suffered by the New Bank.
3. The undersigned New Bank agrees that it assumes and
acquires new rights and/or obligations in accordance with
Clause 27(C) of the Agreement on and with effect from [
], 19[ ] [subject only to the Administrative Agent's having
received tested telex confirmation from [ ]
that the sum of [ ] has been credited to the Existing
Bank's account with [ ] for value that date].
4. The undersigned New Bank:-
(A) confirms that, until further notice, its Lending
Office(s) and details for communications are as set out below;
(B) agrees to perform and comply with the obligations
expressed to be imposed on it by Clause 27(C) of the Agreement
as a result of this Novation Notice taking effect;
(C) acknowledges and accepts paragraph 2(C) above;
(D) if not already a Bank, appoints the Administrative
Agent to act as its agent as provided in the Agreement and
agrees to be bound by the Agreement (including, but not limited
to, Clause 23); and
[(E) confirms that it is a Qualifying Lender.]
5. The above confirmations and agreements are given to and for
the benefit of and made with each of the other parties to the
Agreement.
6. This Novation Notice shall be governed by and construed in
accordance with the laws of England.
Existing Bank
Name:______________________
By:________________________
Authorised Signatory
Date: ______________, 199__
New Bank
Name:______________________
By:________________________
Authorised Signatory
Date: ______________, 199__
U.K. Lending Office(s)
Address: [ ]
Fax No: [ ]
Telex No: [ ]
Attention: [ ]
U.S. Lending Office(s)
Address: [ ]
Fax No: [ ]
Telex No: [ ]
Attention: [ ]
Payment Details
Bank:
Account Name:
Account No:
Reference (if any):
Rights and/or Obligations to be Novated
1. Existing Bank's Commitment to be novated:
2. Existing Bank's share of Advance(s):
Administrative Agent
Agreed for and on behalf of itself as Administrative Agent and
the other parties to the Agreement.
Name: CREDIT SUISSE
By:________________________
Authorised Signatory
Date:________________, 19__
SCHEDULE 4
Associated Costs
1. Until further notice, Associated Costs in relation to the
Interest Period (or any part of the Interest Period) of any
LIBOR Advance denominated in Sterling or any Interest Period
(or part of an Interest Period) relating to any Advance or
overdue sum denominated in Sterling will be determined by the
Administrative Agent on the basis of calculations made by each
Reference Bank as at 11 a.m. (London time) on the first day of
that Interest Period (and, in the case of an Interest Period of
more than 3 months, on the first Business Day of the second,
and each (if any) successive, 3 month period during that
Interest Period) by reference to circumstances existing as at
that time, in accordance with the following formula:-
AB + C(B-D) + E(B-F)
100 - (A+E)
where:-
A = the minimum percentage of eligible liabilities which
authorised institutions are then required by the Bank of
England to hold in non-interest bearing balances with the Bank
of England
B = the percentage rate per annum equal to the rate at
which that Reference Bank is offered 3 month Sterling deposits
by prime banks in the London inter-bank market at or about 11
a.m. on the date of calculation
C = the average percentage of eligible liabilities which
authorised institutions are then required by the Bank of
England to maintain as secured deposits with members of the
London Discount Market Association ("LDMA") and/or with money
brokers or with gilt edged market makers recognised for this
purpose by the Bank of England
D = the lower of B and the percentage rate per annum equal
to the rates offered to that Reference Bank by a member of the
LDMA at or about 11 a.m. on the date of calculation for the
placing of a 3 month Sterling deposit by that Reference Bank
with that member of the LDMA
E = the minimum percentage of eligible liabiliites which
authorised institutions are then required by the Bank of
England to place as special deposits with the Bank of England
F = the lower of B and the percentage rate per annum at
which interest is then paid by the Bank of England on special
deposits
For the purpose of this formula, each of those 6 percentages
shall be expressed as a number (not a percentage).
2. Each Reference Bank shall use reasonable endeavours to
supply to the Adminstrative Agent on request the percentage
rate per annum so calculated by it on any date. If any
Reference Bank does not do so on request of the Administrative
Agent, the Administrative Agent shall make the relevant
determination on the basis of the quotations supplied by the
remaining Reference Banks. If no, or only one, Reference Bank
supplies a quotation, then instead of Associated Costs being
payable in respect of the relevant Interest Period (or part
thereof), each Bank shall be entitled to claim compensation
under Clause 13.
3. On each Associated Costs calculation date during any
Interest Period relating to any LIBOR Advance or overdue sum,
the Administrative Agent shall determine the arithmetic mean of
the percentage rates per annum so calculated by the Reference
Banks on that Associated Costs calculation date and, if that
arithmetic mean is not a whole multiple of 1/16%, shall round
it up to the next 1/16%. The figure so determined shall be the
Associated Costs applicable for that Interest Period or, as the
case may be, the relevant part of that Interest Period.
4. In the event of the introduction of or any change in any
present or future reserve asset ratio, cash ratio, secured
deposit, monetary control ratio, special deposit, liquidity
and/or similar requirement imposed from time to time by the
Bank of England and/or any other Agency of the United Kingdom
(but excluding capital adequacy requirements or any change in
the minimum percentage of eligible liabiliites which authorised
institutions are required to maintain in reserve assets, cash
ratio deposits, secured deposits or special deposits) or any
change in the interpretation or application of any such
requirement, the Adminstrative Agent may at any time give
notice to BFIA and the Banks of (A) the amendments determined
by the Administrative Agent (after consultation with the Banks)
to be necessary to the above formula and/or date of calculation
so as to (but only so as to) restore the position in terms of
overall return to that which prevailed before such change
occurred and (B) the date as from which the amended formula
and/or date(s) of calculation are to apply. As from the date
notified until any later date notified by the Administrative
Agent under this paragraph 4, Associated Costs shall be
calculated in accordance with the formula and/or on the date(s)
of calculation so notified.
SCHEDULE 5
Liens existing as of June 30, 1994
$
Mortgages Payable (by segment): (Millions)
Solid Waste 6.2
Corporate 0.1
International(1) 0.5
6.8
Other Secured Obligations (by segment):
Solid Waste 7.4
International(1) 5.7
13.1
Total Liens 19.9
(1) Excluding Otto Entsorgungsdienstleistung GmbH
SCHEDULE 6
Certificate of each of the Borrowers
To Credit Suisse as the Administrative Agent
and Arranger and the Banks parties to the
the Agreement referred to below. [ ], 1994
I refer to the 500,000,000 pounds Revolving Credit
Agreement dated [ ], 1994 between, inter alia,
[ ] as borrower (the "Borrower"), Browning-Ferris
Industries, Inc. (the "Guarantor") and yourselves (the
"Agreement"). Terms defined and references construed in the
Agreement have the same meaning and construction in this
Certificate.
I am a Director of the Borrower and hereby certify as
follows:-
1. Authority: I am duly authorised to give this Certificate.
2. Powers: Delivered with this Certificate and signed or
initialled by me for the purpose of identification is a true,
complete and up-to-date copy of the Memorandum and Articles of
Association of the Borrower as in effect when it signed the
Agreement and on the date of this Certificate. The Borrower is
carrying on a business authorised under its Memorandum of
Association. Neither the entry into the Agreement by the
Borrower, nor the exercise of its rights and/or performance of
or compliance with its obligations under the Agreement does or
will violate, or exceed any borrowing or other power or
restriction granted or imposed by, its Memorandum or Articles
of Association.
3. Due Authorisation: Delivered with this Certificate and
signed or initialled by me for the purpose of identification is
a true and complete copy of the Minutes of a duly convened
meeting of the Board of Directors of the Borrower duly held on
[ ], 1994 at which a duly constituted quorum of
Directors was present and voting throughout and at which the
Resolutions set out in the Minutes were duly passed. Each of
those Resolutions remains in full force and effect without
modification. Those Resolutions constitute all action necessary
on the part of the Borrower to approve the Agreement and to
authorise the signing of the Agreement and the giving of any
communications and/or taking of any other action required under
or in connection with the Agreement on behalf of the Borrower.
4. Due Execution: The Agreement has been unconditionally
signed and delivered by the Borrower. [The/Each] person who
signed the Agreement on behalf of the Borrower was a duly
authorised signatory of the Borrower when the Agreement was
entered into. Delivered with this Certificate and signed or
initialled by me for the purpose of identification is a list of
the names and titles, and specimens of the signatures, of the
persons who are at the date of this Certificate the Directors
and Secretary of the Borrower and who (either individually or
with others, as provided in the
resolutions referred to in 3 above) signed the Agreement and/or
are authorised to give all communications and take any other
action required under or in connection with the Agreement on
behalf of the Borrower.
..................................
Director of [ ]
SCHEDULE 7
Certificate of Guarantor
To Credit Suisse as the Administrative Agent
and Arranger and the Banks parties to the
the Agreement referred to below. [ ], 1994
I refer to the 500,000,000 pounds Revolving Credit
Agreement dated [ ], 1994 between BFI Acquisitions
plc, Browning-Ferris Industries Europe, Inc., Browning-Ferris
Industries International, Inc., Browning-Ferris Industries,
Inc. (the "Guarantor") and yourselves (the "Agreement"). Terms
defined and references construed in the Agreement have the same
meaning and construction in this Certificate.
I am an Officer of the Guarantor and hereby certify as
follows:-
1. Authority: I am duly authorised to give this Certificate.
2. Powers: Delivered with this Certificate and signed or
initialled by me for the purpose of identification is a true,
complete and up-to-date copy of the Restated Certificate of
Incorporation and By-laws of the Guarantor as in effect when it
signed the Agreement and on the date of this Certificate. The
Guarantor is carrying on a business authorised under its
Restated Certificate of Incorporation. Neither the entry into
the Agreement by the Guarantor, nor the exercise of its rights
and/or performance of or compliance with its obligations under
the Agreement does or will violate, or exceed any borrowing or
other power or restriction granted or imposed by, its Restated
Certificate of Incorporation or By-laws.
3. Due Authorisation: Delivered with this Certificate and
signed or initialled by me for the purpose of identification is
a true and complete copy of the Resolutions adopted by
unanimous written consent dated [ ] of the Executive
Committee of the Board of Directors of the Guarantor. Each of
those Resolutions remains in full force and effect without
modification. Those Resolutions constitute all action necessary
on the part of the Guarantor to approve the Agreement and to
authorise the signing of the Agreement and the giving of any
communications and/or taking of any other action required under
or in connection with the Agreement on behalf of the Guarantor.
4. Due Execution: The Agreement has been unconditionally
signed and delivered by the Guarantor. [The/Each] person who
signed the Agreement on behalf of the Guarantor was a duly
authorised signatory of the Guarantor when the Agreement was
entered into. Delivered with this Certificate and signed or
initialled by me for the purpose of identification is a list of
the names and titles, and specimens of the signatures, of the
persons who are at the date of this Certificate [the Directors
and Secretary] of the Guarantor and who (either individually or
with others, as provided in the resolutions referred to in 3
above)
signed the Agreement and/or are authorised to give all
communications and take any other action required under or in
connection with the Agreement on behalf of the Guarantor.
...........................................
Officer of Browning-Ferris Industries, Inc.
SCHEDULE 8
Opinion of Simmons & Simmons
To the Adminstrative Agent, the Arranger
and the Banks parties to the Agreement
referred to below. December 7, 1994
Dear Sirs,
We have acted as legal advisers in England to BFI
Acquisitions plc ("BFIA") in connection with a Revolving Credit
Agreement dated December 5, 1994 (the "Agreement") between,
inter alia, BFIA, Browning-Ferris Industries, Inc. as
Guarantor, and the Banks named in it and Credit Suisse as
Administrative Agent. Terms defined and references construed
in the Agreement have the same meaning and construction in this
opinion, which is given as contemplated by paragraph 8(D) of
Schedule 1 to the Agreement.
This opinion is limited to English law as applied by the
English courts at the date hereof and is given on the basis
that it will be governed by and construed in accordance with
English law. In particular we have made no investigation into
the laws of the state of Delaware or the federal laws of the
United States as a basis for the opinions expressed herein and
consequently do not express any opinion thereon.
For the purpose of this opinion we have examined a signed copy
of the Agreement, the certificate of BFIA delivered under
paragraph 9 of Schedule 1 to the Agreement, each of the
documents delivered with that certificate and such other
documents as we consider necessary.
Assumptions
We have assumed that:-
(i) the signatures on the Agreement are genuine and that the
Agreement has been delivered by each party;
(ii) the Agreement has been validly executed, delivered and
authorised by, and the performance thereof is within the
capacity and powers of, each of the Borrowers (as defined in
the Agreement), other than BFIA, and the Guarantor (as defined
in the Agreement); and
(iii) the results obtained in respect of the searches and
enquiries referred to below were accurate and complete and
disclosed all information which is material for the purposes of
this opinion. It should be noted, however, that searches at
the Companies Registry are not capable of revealing whether or
not a winding-up petition or a petition for an administration
order has been presented. Notice of a winding-up order made or
resolutions passed, or administration order made, or a receiver
or administrative receiver appointed may not be filed at the
Companies Registry immediately. Also, the results of oral
telephone enquiries of the Central Index of Winding-up
Petitions have been found to be unreliable.
Opinion
On the basis of, and subject to, the foregoing and the
reservations set out below, and subject to any matters not
disclosed to us, we are of the opinion that:-
(i) BFIA is a company duly incorporated and validly existing
in England under the Companies Acts 1985 to 1989;
(ii) a search made on 7th December, 1994 at the Companies
Registry revealed no order for the winding-up of BFIA and no
notice of the appointment of a receiver. A telephone inquiry
of the Central Registry of Winding-up Petitions made on 7th
December, 1994 revealed that no petition for winding-up of BFIA
had been presented;
(iii) BFIA has corporate power to enter into and perform its
obligations under the Agreement and has taken all necessary
corporate action to authorise borrowings under the Agreement
and to authorise the signing, delivery and performance of the
Agreement;
(iv) the Agreement constitutes valid, binding and enforceable
obligations of the Borrowers and the Guarantor;
(v) the execution, delivery and performance by BFIA of the
Agreement does not constitute and will not result in any breach
of its Memorandum and Articles of Association;
(vi) no consents, approvals, authorisations, registrations,
licences, notarisations or orders of or filings with any
governmental or other regulatory authority of the United
Kingdom are required of BFIA in connection with the performance
by BFIA of its obligations under the Agreement in order that
the opinion in paragraph (iv) above can be given; and
(vii) it is not necessary in order to ensure the legality,
validity, binding nature, enforceability or admissibility as
evidence of the Agreement under the laws of England that it be
filed, recorded or enrolled with any court or authority in
England or that any stamp, registration or similar tax be paid
on or in relation to it.
Reservations
We have the following reservations:-
(i) the validity, performance and enforcement of the
obligations of BFIA under the Agreement may be limited by laws
relating to bankruptcy, insolvency, liquidation,
reorganisation, court schemes, moratoria, administration and
other laws of general application relating to or affecting the
rights of creditors;
(ii) the term "enforceable" as used above means that the
obligations assumed by the relevant party under the relevant
document are of a type which the English courts enforce. It
does not mean that those obligations will necessarily be
enforced in all circumstances in accordance with their terms.
In particular:-
(a) enforcement may be limited by general principles of
equity - for example, equitable remedies may not be available
where damages are considered to be an adequate remedy;
(b) claims may become barred under the Limitation Acts
or may be or become subject to defences of set-off or
counterclaim;
(c) where obligations are to be performed in a
jurisdiction outside England, they may not be enforceable in
England to the extent that performance would be illegal under
the laws of that jurisdiction;
(iii) a certificate, determination, notification or opinion as
to any matter might be held by the English courts not to be
conclusive if it could be shown to have an unreasonable or
arbitrary basis or in the event of manifest error;
(iv) depending on the nature of the illegality, invalidity or
unenforceability in question, a provision in the Agreement
providing for the severability of a provision held to be void,
illegal or unenforceable might not be effective;
(v) an English court may refuse to give effect to a provision
in the Agreement in respect of the costs of unsuccessful
litigation brought before an English court or where the court
has itself made an order for costs;
(vi) under English law the terms of an agreement under hand
may be varied by oral or written agreement of, or the conduct
of, the parties;
(vii) an English court will give effect to the provisions of
Clause 21 of the Agreement only if it can be established that
any amount payable thereunder is a genuine pre-estimate of loss
and is not a penalty;
(viii) a provision that a notice or appointment is
irrevocable may not be enforceable; and
(ix) except as expressly stated above we do not express any
opinion as to any tax (including value added tax) consequences
arising out of the Agreement or any payments made thereunder.
Disclosure
This opinion is addressed to the Administrative Agent, Arranger
and Banks referred to above solely for their own use and
benefit and is neither to be transmitted to any other person,
nor relied upon by any other person or for any other purposes
nor quoted or referred to in any public document nor filed with
any government agency or other person, without our written
consent.
Yours faithfully
SIMMONS & SIMMONS
SCHEDULE 9
Opinion of Rufus Wallingford, Esq.
December 5, 1994
To the Administrative Agent, the Arranger and the Banks
Parties to the Agreement referred to below
Dear Sirs,
I am the General Counsel of Browning-Ferris Industries,
Inc., a Delaware corporation (the "Guarantor"), and have acted
as such in connection with the 500,000,000 pounds Revolving
Credit Agreement dated December 5, 1994 (the "Agreement") among
BFI Acquisitions plc, Browning-Ferris Industries Europe, Inc.,
BFI International, Inc., the Guarantor, the Banks named
therein, and Credit Suisse, as Administrative Agent and as
Arranger. Capitalized terms defined in the Agreement are used
herein as therein defined.
Solely in my capacity as General Counsel of the Guarantor,
I have examined, or have caused to be examined by other
attorneys under my supervision, originals or copies, certified
or otherwise identified to the examiner's satisfaction, of the
Agreement, the letter agreement among the Guarantor and the
Administrative Agent (the "Fee Letter") and such other
documents, corporate records, certificates of public officials
and other instruments and have conducted such other
investigations of fact and law as I have deemed necessary or
advisable for purposes of this opinion. The Agreement and the
Fee Letter are sometimes referred to herein as the "Credit
Documents".
In such examination, I have assumed (i) the statements of
fact made in all such certificates, documents and instruments
are true, accurate and complete, (ii) the genuineness of all
signatures (other than the signatures of Persons signing on
behalf of the Guarantor and each of the Borrowers), the
authenticity and completeness of all documents, certificates,
instruments and records submitted to me or persons under my
supervision as originals and the conformity to the original
instruments of all documents submitted to me or persons under
my supervision as copies, and the authenticity and completeness
of the originals of such copies, (iii) the due authorization,
execution and delivery by the Administrative Agent, the
Arranger and each Bank of the Credit Documents to which it is
a party, (iv) that the Administrative Agent, the Arranger and
each Bank has all requisite power and authority to execute,
deliver and perform the Credit Dcouments to which it is a party
and (v) the enforceability of the Agreement against the
Administrative Agent, the Arranger and each Bank.
In addition, in rendering this opinion, I have relied upon,
as to certain matters of fact, certificates of officers of the
Company and each of the Borrowers and certificates or telegrams
of public officials, without any independent investigation of
such matters.
Based upon the foregoing and relying upon the correctness
of all statements of fact contained in the documents,
certificates and records that I have examined either personally
or through attorneys under my supervision, and subject to the
assumptions, qualifications, limitations and exceptions set
forth herein, I am of the opinion that:
1. The Guarantor and each of the Borrowers has been duly
incorporated and is a validly existing corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power to own its properties
and conduct its business as now being conducted and is duly
qualified to do business in each jurisdiction in which the
character or location of its properties or the nature or
conduct of its business makes such qualification necessary,
except for those jurisdictions where the failure to be so
qualified would not have a Material Adverse Effect on the
consolidated financial condition of the Guarantor and its
Subsidiaries taken as a whole. Each Principal Subsidiary (as
determined as of September 30, 1994) has been duly incorporated
and is a validly existing corporation in good standing under
the laws of the jurisdiction of its incorporation and has the
corporate power to own its properties and to carry on its
business as now being conducted.
2. The Guarantor and each Borrower has full corporate
power and authority to execute, deliver and perform its
obligations under the Credit Documents to which it is a party.
No consent or approval of the Guarantor's stockholders or of
any governmental authority is required by the laws of the State
of Texas, the General Corporation Laws of the State of Delaware
or, to the best of my knowledge, the Federal laws of the United
States of America, to be obtained by the Guarantor as a
condition to the validity of the Agreement, provided that I
express no opinion as to the applicability of Federal or State
securities laws, rules or regulations.
3. All corporate actions required to be taken or performed
by the Guarantor and each Borrower in order to authorize the
Guarantor and each Borrower to execute, deliver and perform its
obligations under the Credit Documents to which it is a party
have been duly taken or performed.
4. There is no charter or by-law provision of the
Guarantor or any Borrower, and, to my knowledge, no statute,
regulation, rule, order or judgment, or provision of any
mortgage, indenture, contract or agreement to which the
Guarantor or any Borrower is a party or which is binding on it,
which would prohibit or prevent the execution, delivery or
performance of the terms of the Credit Documents by the
Guarantor or any Borrower.
5. The Agreement has been duly executed and delivered by
the Guarantor and each Borrower. The Fee Letter has been duly
executed and delivered by the Guarantor and constitutes a valid
and binding obligation of the Guarantor, enforceable in
accordance with its terms.
6. To my knowledge, except as disclosed in the Guarantor's
Annual Report filed with the Securities and Exchange Commission
on Form 10-K for the fiscal year ended September 30, 1994 there
are no legal or governmental proceedings or investigations
pending or threatened before any court or arbitrator or before
or by any governmental authority which, individually or, to the
extent involving related claims or issues, in the aggregate,
involve a material risk of being resolved in a manner that
would have a Material Adverse Effect on (i) the consolidated
financial condition of the Guarantor and its Subsidiaries taken
as a whole or (ii) the ability of the Guarantor to perform its
obligations under the Credit Documents.
7. Neither the Guarantor, BFII or BFIE is an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended, nor is the Guarantor a "holding company" or a
"subsidiary company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
The foregoing opinions are subject to the following
qualifications, limitations and exceptions:
(A) With respect to the opinion set forth in paragraph 5
above, I advise you that (i) the enforceability of the Credit
Documents may be limited by or affected by bankruptcy,
insolvency, reorganisation, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
providing for relief of debtors, including, without limitation,
applicable fraudulent transfer and fraudulent conveyance laws,
(ii) the remedies of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses or principles or to the discretion of the court before
which any proceeding therefor may be brought, regardless of
whether such proceeding be deemed one in law or equity, (iii)
rights to indemnity may be limited by state or federal laws and
the policies underlying such laws, (iv) provisions of the Fee
Letter which permit the Administrative Agent, the Arranger or
any Bank to take action or make determinations may be subject
to a requirement that such action be taken or such
determination be made on a reasonable basis and in good faith
and (v) a final judgment for a fixed sum of an English court of
competent jurisdiction may not be recognized and enforced by
the courts of the State of Texas.
(B) I express no opinion with respect to the effect,
validity or enforceability of any term of the Fee Letter
purporting to (i) establish evidentiary standards, (ii) waive
statutory rights or remedies, (iii) waive future laws or rights
that may arise in the future or (iv) prohibit the transfer,
alienation, hypothecation or encumbrance of property.
I am licensed to practice law in the State of Texas and I
express no opinion as to matters not governed by the federal
laws of the United States of America, the General Corporation
Laws of the State of Delaware or the laws of the State of Texas
(except for the choice-of-laws provisions of the State of
Texas, as to which I express no opinion).
The opinions expressed herein are for the sole benefit of,
and may only be relied upon by, the Administrative Agent, the
Arranger and the Banks and, without my prior written consent,
may not be relied upon in any manner by any other Person. This
opinion may not be furnished to any other Person without my
prior written consent, except that this opinion may be provided
(i) to the independent auditors and attorneys of the
Administrative Agent and each Bank, (ii) to any state or
federal authority having regulatory jurisdiction over either
the Administrative Agent or any Bank, as applicable, (iii)
pursuant to an order or legal process of any court or
governmental agency, (iv) to any successor to either the
Administrative Agent or any Bank and (v) in connection with any
legal action to which either the Administrative Agent or any
Bank, as applicable, is a party arising out of the Credit
Documents or relating to the transactions provided for therein.
The opinions expressed herein are as of the date hereof (and
not as of any other date, including, without limitation, the
effective date of any Credit Document if a date other than the
date hereof) and I make no undertaking to amend or supplement
such opinions as facts and circumstances come to my attention
or changes in the law occur which could affect such opinions.
Very truly yours,
SCHEDULE 10
Opinion of Fulbright & Jaworski L.L.P.
December 9, 1994
To Each Person Named on
Attachment A Hereto
Dear Sirs:
We have acted as special United States counsel to
Browning-Ferris Industries, Inc., a Delaware corporation (the
"Guarantor"), in connection with the 500,000,000 pounds
Multicurrency Revolving Credit Agreement dated December 5, 1994
(the "Agreement"), between BFI Acquisitions plc, BFI
International, Inc., Browning-Ferris Industries Europe, Inc.,
the Guarantor and the Persons named on Attachment A hereto.
The opinions expressed herein are furnished to you at the
request of the Guarantor pursuant to Clause 3 of the Agreement.
Capitalized terms used herein and not otherwise defined herein
have the respective meanings provided in the Agreement.
For purposes of rendering the opinions expressed herein, we
have examined the Agreement and such other documents as we have
deemed necessary as a basis for those opinions. In making that
examination, we have assumed the authenticity of each of those
documents that constitutes an original, the conformity to the
authentic original of each of those documents that constitutes
a copy, the genuineness of each signature on each of those
documents, and the legal capacity of each natural person who
executed any of those documents.
In rendering the opinions expressed herein, we have
assumed, without investigation, that:
(1) each Person identified in the Agreement as a party
thereto (i) has been duly organized, (ii) is validly existing,
and (iii) has corporate or equivalent power to execute and
deliver, and to perform its obligations under, the Agreement;
(2) the execution and delivery of the Agreement by
each Person identified therein as a party thereto has been duly
authorized by all necessary corporate or equivalent action on
the part of such Person;
(3) each Person identified in the Agreement as a party
thereto has duly executed and delivered the Agreement; and
(4) each Person identified in the Agreement as a party
thereto has (i) satisfied any other legal requirements that are
applicable to such Person to the extent necessary to make the
Agreement enforceable against such Person (ii) complied with
any other legal
requirements pertaining to the status of such Person as
such status relates to the rights of such Person to enforce the
Agreement against each other Person that is identified in the
Agreement as a party thereto.
Based upon the foregoing, and having regard for such legal
considerations as we have deemed relevant, we are of the
opinion, subject to the qualifications, exceptions, liimtations
and assumptions set forth herein, that:
1. The courts of the State of Texas and the State of New
York, and the courts of the United States of America sitting in
the State of Texas and in the State of New York, would,
assuming that such courts were to apply existing law, enforce
the agreement contained in Clause 33(A) of the Agreement that
the Agreement be governed by and construed in accordance with
the laws of England.
2. If, (i) as a result of a proceeding brought after the
execution and delivery of the Agreement, a judgment is obtained
in the courts of England against the Guarantor, BFII or BFIE
(ii) such judgment grants recovery of a sum of money (other
than taxes, fines or other penalties) on account of the failure
of the Guarantor, BFII or BFIE to perform its obligations under
the Agreement, (iii) such judgment is final, conclusive (within
the meaning of the Uniform Foreign Country Money-Judgments
Recognition Act, as in effect in the State of Texas, Tex. Civ.
Prac. & Rem. Code Sections 36.001 et seq. (the "Texas Act")), not
subject to appeal, and enforceable where rendered, (iv) such
judgment is filed in accordance with Section 36.0041 of the Texas
Act, together with an affidavit as required by Section 36.0042 of the
Texas Act, and (v) notice of such filing is provided in
accordance with Sections 36.0042 or 36.0043 of the Texas Act, then
such judgment, to the extent it grants recovery of a sum of
money, should be enforceable in the State of Texas unless such
judgment is not recognized for one or more of the reasons
specified in Section 36.005(b) of the Texas Act.
If, (i) as a result of a proceeding brought after the
execution and delivery of the Agreement, a judgment is obtained
in the courts of England against the Guarantor, BFII or BFIE,
(ii) such judgment grants recovery of a sum of money (other
than taxes, fines or other penalties) on account of the failure
of the Guarantor, BFII or BFIE to perform its obligations under
the Agreement, (iii) such judgment is final, conclusive (within
the meaning of the Uniform Foreign Country Money-Judgments
Recognition Act as in effect in the State of New York, N.Y.
Civ. Prac. L. & R. Article 53 (the "New York Act")), and
enforceable where rendered, then such judgment, to the extent
it grants recovery of a sum of money, should be recognized and
enforceable in the State of New York subject to the power of a
New York court to stay proceedings pending any appeal of such
judgment of such English court, unless such judgment is not
recognized for one or more of the reasons specified in Section 5304 of
the New York Act.
3. No stamp or registration duty or similar tax or charge
is payable in the State of Texas or the State of New York with
respect to the Agreement.
4. The Agreement should be admissible in evidence in a
lawsuit brought in the state courts of the State of Texas or
the State of New York or in the courts of the United States of
America sitting in the State of Texas or in the State of New
York to recover a sum of money from the Guarantor, BFII or BFIE
on account of the failure of the Guarantor, BFII or BFIE to
perform its obligations under the Agreement.
5. No consent or approval of any governmental authority is
required by the federal laws of the United States of America to
be obtained by Guarantor, BFII or BFIE as a condition to the
validity of the Agreement.
6. Except for any deduction or withholding (a) on the
payment of interest on Advances imposed as a result of the
failure or inability of any Bank, which is not a United States
(as defined in section 7701(a)(30) of the Code), to deliver to
the Borrowers and the Guarantor on the date of the initial
Advance and maintain in effect duplicate United States Internal
Revenue Service forms 1001 or 4224 certifying such Bank's
exemption from United States withholding tax on interest or
that such interest is effectively connected with a United
States trade or business, and (b) on the payment of fees or
other amounts paid under the Agreement imposed as a result of
the failure or inability of any Administrative Agent, Arranger
or Bank, (i) which is not a United States Person and which
receives fees attributable to its performance of services
within the United States or other United States source amounts,
to deliver to the Borrowers and the Guarantor before the date
of payment of any fees or other United States source amounts
and maintain in effect duplicate United States Internal Revenue
Service forms 1001 or 4224 certifying exemption from United
States withholding tax on fees or other amounts or (ii) which
is not a United States Person and which receives fees
attributable to its performance of services without the United
States or other foreign source amounts, to deliver to the
Borrowers and the Guarantor before the date of payment of any
fees or other foreign source amounts and maintain in effect
Internal Revenue Service forms W-8 or W-9, as appropriate, or
(iii) which is a United States Person and which receives fees
or other amounts, to deliver to the Borrowers and the Guarantor
before the date of payment of any fees or other amounts and
maintain in effect Internal Revenue Service forms W-9, there
are no present United States federal income taxes or backup
withholding taxes or taxes imposed by the State of Texas or the
State of New York required to be deducted or withheld from any
payments made by the Guarantor, BFII and BFIE under the
Agreement.
In rendering the opinion expressed in paragraph 1 above, we
have assumed without investigation that the transaction to
which the Agreement relates bears a reasonable relation to
England. Section 35.51 of the Texas Business and Commerce Code
provides, in effect, that the transaction bears a reasonable
relation to England if (i) a party to the transaction has its
chief executive office, or an office from which it conducted a
substantial part of the negotiations relating to the
transaction, in England, (ii) a party to the transaction is
required to perform a substantial part of its obligations
relating to the transaction in England, or (iii) a substantial
part of the negotiations relating to the transaction and the
signing of the Agreement by a party to the transaction, occurred
in England.
The opinion expressed in paragraph 1 hereof is subject to
the exception that the courts of the State of Texas and the
State of New York, and the courts of the United States of
America sitting in the State of Texas and in the State of New
York, may apply the following laws to the Agreement
notwithstanding the agreement that the Agreement shall be
governed by and construed in accordance with the laws of
England:
(1) laws of other jurisdictions governing the
organization or existence of any party to the Agreement, the
corporate or equivalent power of such party to execute and
deliver, or to perform its obligations under, the Agreement,
the authorization of the execution and delivery of the
Agreement by all necessary corporate or equivalent action on
the part of such party, and similar matters;
(2) bankruptcy, insolvency, reorganization or similar
laws of other jurisdictions affecting the rights of creditors
generally;
(3) federal laws of the United States of America,
including provisions of the National Bank Act or the
International Banking Act of 1978 that may limit the rate of
interest that you may take, receive, reserve or charge pursuant
to the Agreement;
(4) laws of other jurisdictions respecting real
property located therein;
(5) laws of other states that are mandatorily
applicable under Section 1.105(b) of the Texas Uniform
Commercial Code;
(6) laws of other states, judicial decisions and
general principles of equity affecting the availability of
remedies, but the application of those laws would not, in our
opinion, make the available remedies, taken as a whole,
inadequate for the practical realization of the benefits
intended to be provided by the Agreement;
(7) procedural laws and rules of the courts of the
State of Texas, the State of New York or the courts of the
United States of America (including, without limitation,
statutes and rules with respect to personal or subject matter
jurisdiction, service of process, necessary parties, prior
exhaustion of remedies as against principals, rights of
subrogation, rights of guarantors or sureties, evidence,
limitations of action, venue, joinder of parties, matters of
due process of law and similar matters);
(8) the Securities Act of the State of Texas, as
amended, and the rules and regulations thereunder;
(9) laws of the State of Texas and the State of New
York respecting (i) the submission of any party to the
jurisdiction of particular courts, (ii) the agreement of any
party concerning the
courts in which any action, suit or proceeding may be
instituted, (iii) the waiver by any party of trial by jury or
of any immunity from, or objection to, any action, suit or
proceeding on jurisdictional grounds or on grounds of venue or
forum non conveniens, (iv) irrevocability of appointment of
agents, or (v) the sufficiency or validity of any service of
process;
(10) laws of the State of Texas and the State of New
York pertaining to the conditions under which judgments of
courts of other jurisdictions may be enforced in the State of
Texas and the State of New York;
(11) fraudulent transfer and fraudulent conveyance laws
of other jurisdictions; and
(12) laws, if any, of jurisdictions, other than the
laws of the State of Texas, and the State of New York and the
federal laws of the United States of America, to which a party
to the Agreement may be subject and that may affect that
party's right or capacity to perform its obligations under, or
to receive the benefits of, the Agreement.
In rendering each of the opinions expressed in paragraph 1
above, we express no opinion regarding the right of any Person
to institute or maintain any action in any court or upon
matters respecting the jurisdiction of any court.
With respect to the opinion expressed in paragraph 2 above,
we advise you that (i) a judgment, if any there be, of the
courts of England that is entitled to be enforced in the State
of Texas under the provisions and conditions of the Act must
first be authenticated in accordance with applicable Texas law
and filed in the office of the clerk of a Texas court of
competent jurisdiction, and (ii) such judgment, when so
authenticated and filed, will have the same effect and be
subject to the same procedures, defenses and proceedings for
being reopened, vacated, stayed, enforced or satisfied as a
judgment of the Texas court in which it is filed.
With respect to the opinion expressed in paragraph 2 above,
we advise you that (i) a judgment, if any there be, of the
courts of England that is entitled to be enforced in the State
of New York under the provisions and conditions of the New York
Act must first be exemplified in accordance with applicable New
York law and (ii) such judgment, when so exemplified, must then
be made the subject of an action or motion, or the judgment be
interposed by way of counterclaim or cross-claim in a pending
New York action where applicable, in accordance with Section 5303 of
the New York Act. If successfully converted into a New York
judgment through one of the procedures set forth in Section 5303 of
the New York Act, the judgment becomes enforceable as a
judgment of the New York Court in which it is filed.
With respect to the opinion expressed in paragraph 2 above,
we also advise you that Section 36.0005(b) of the Texas Act and
Section 5303(b) of the New York Act provide that a foreign country
judgment need not be recognized if (i) the defendant in the
proceedings in the foreign country court did not receive notice
of the proceedings in sufficient time to enable the defendant
to defend, (ii) the judgment was obtained by fraud, (iii) the
cause of action on which the judgment is based is repugnant to
the public policy of the State of Texas or the State of New
York, as the case may be, (iv) the judgment conflicts with
another final and conclusive judgment, (v) the proceeding in
the foreign country court was contrary to an agreement between
the parties under which the dispute in question was to be
settled otherwise than by proceedings in that court or (vi) in
the case of jurisdiction based only on personal service, the
foreign country court was a seriously inconvenient forum for
the trial of the action. The Texas Act also provides that a
foreign country judgment need not be recognized if it is
established that the foreign country in which the judgment was
rendered does not recognize judgments against a citizen of that
foreign country rendered in the State of Texas under similar
circumstances and of the type of the foreign judgment sought to
be enforced. In addition, Section 35.005(a) of the Texas Act and
Section 5303(a) and (b) of the New York Act provide that a foreign
country court judgment is not conclusive, and therefore need
not be recognized, if (i) the judgment was rendered under a
system that does not provide impartial tribunals or procedures
compatible with the requirements of due process of law, (ii)
the foreign country did not have personal jurisdiction over the
defendant (in accordance with Texas or New York law, as the
case may be, and federal law of the United States of America),
or (iii) the foreign country court did not have jurisdiction
over the subject matter. The procedures for contesting
recognition of a foreign country judgment in a Texas court are
set forth in Section 36.0044 of the Texas Act.
With respect to the opinion set forth in paragraph 4 above,
both judicial systems rely on Rules of Evidence that are
remarkably similar. Those Rules require the trial judge to
rule on the admissibility of documents and other evidence, they
define relevance very broadly (any evidence having the tendency
to make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than
it would be without the evidence), and they require that the
court admit all relevant evidence unless (a) it is proscribed
by some other Rule, statute or constitutional provision, or (b)
the court finds that its probative value is substantially
outweighed by a danger of unfair prejudice, confusion, or
misleading the jury, or by considerations of undue delay, waste
of time, or needless presentation of cumulative evidence.
Although a party may complain on appeal of evidentiary rulings,
it may not obtain a reversal based on the erroneous admission
or exclusion of evidence unless it made proper and timely
objections in the trial court and convinces the appellate court
that a substantial right was prejudiced by the erroneous
ruling. Although no one can guarantee how a particular trial
judge will rule on any matters of evidence, it appears to be
obvious that in a lawsuit alleging that a guarantor is liable
to honor a guarantee because the primary obligor breached some
obligation found in its agreement, proving what the primary
obligor's contractual obligations (which were allegedly
breached) were is an essential element of the plaintiff's
case. Thus, the primary obligor's agreement should fit the
definition of relevance, and there appear to be no reasons why
it should be excluded. Perhaps because the answer seems to be
so obvious, there are very few reported cases addressing that
question, but those that do exist strongly support the conclusion
that the agreement should be admitted.
The opinions expressed herein are limited exclusively to
the laws of the State of Texas and the State of New York and
the federal laws of the United States of America.
The opinions expressed herein are for the sole benefit of,
and may be relied only by, you. Such reliance is limited to
the transactions contemplated by the Agreement, and the
opinions expressed herein are limited to the law existing on
the date hereof. In rendering those opinions, we do not
undertake to advise any Person of any change in law or fact
that may occur after the date hereof.
Very truly yours,
Fulbright & Jaworski L.L.P.
Attachment
Attachment A to Opinion of
Fulbright & Jaworski L.L.P.
Credit Suisse
12 East 49th Street
39th Floor
New York, New York 10017
ABN-AMRO Bank N.A.
Three Riverway, Suite 1600
Houston, Texas 77056
Bank of America National Trust and
Savings Association
Three Allen Center
333 Clay Street, Suite 4550
Houston, Texas 77002-4103
Deutsche Bank AG
31 West 52nd Street
New York, New York 10019
The Fuji Bank, Limited
1 Houston Center, Suite 4100
1221 McKinney Street
Houston, Texas 77010
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260-0060
Nations Bank of Texas, N.A.
700 Louisiana, 8th Floor
Houston, Texas 77002
NationsBank of North Carolina N.A.
35 New Broad Street
London EC2M 1NH
Chemical Bank
125 London Wall
London EC24 5AJ
SCHEDULE 11
Opinion of Linklaters & Paines
To the Administrative Agent, the Arranger and the Banks
Parties to the Agreement referred to below
December 9, 1994
Dear Sirs
1. We have acted as your English legal advisers in connection
with an agreement dated December 5, 1994 (the "Agreement")
between BFI Acquisitions plc, BFI International, Inc.,
Browning-Ferris Industries Europe, Inc. and Browning-Ferris
Industries Inc. (the "Borrowers"), Browning-Ferris Industries,
Inc. (the "Guarantor"), the Banks named in it and Credit Suisse
as Administrative Agent and Arranger. Terms defined in the
Agreement have the same meaning in this opinion.
2. This opinion is limited to English law as applied by the
English courts and is given on the basis that it will be
governed by and construed in accordance with English law.
3. For the purpose of this opinion we have examined a signed
copy of the Agreement. We have assumed that the Agreement has
been validly signed and delivered by each of the Borrowers and
the Guarantor and is within the capacity and powers of, and has
been validly authorised, signed and delivered by, each party.
4. In our opinion the Agreement constitutes valid, binding and
enforceable obligations of each of the Borrowers and the
Guarantor.
5. The term "enforceable" as used above means that the
obligations assumed by the Borrowers and the Guarantor under
the Agreement are of a type which the English courts enforce.
It does not mean that those obligations will necessarily be
enforced in all circumstances in accordance with their terms.
In particular:-
(a) Enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganisation and other laws of general
application relating to or affecting the rights of creditors.
(b) Enforcement may be limited by general principles of
equity - for example, equitable remedies may not be available
where damages are considered by the court to be an adequate
remedy.
(c) Claims may become barred under the Limitation Act 1980
or may be or become subject to set-off or counterclaim.
(d) Where obligations are to be performed in a jurisdiction
outside England, they may not be enforceable in England to the
extent that performance would be illegal under the laws of that
jurisdiction.
6. This opinion is subject to the following qualifications:-
(a) So far as they relate to United Kingdom stamp duties,
the undertakings and indemnities given by the Borrower in
Clause 25(C) of the Agreement may be void under Section 117 of
the Stamp Act 1891. However, no United Kingdom stamp duty is
payable in respect of the signing and delivery of the
Agreement.
(b) A certificate, determination, notification, opinion or
the like might be held by the English courts not to be
conclusive if it could be shown to have an unreasonable or
arbitrary basis or in the event of manifest error despite any
provision in the Agreement to the contrary.
(c) Any term of an agreement may be amended orally by the
parties despite provisions such as Clause 28(B) of the
Agreement.
(d) Interest provided for under Clause 21 of the Agreement
may not be recoverable if it amounts to a penalty under English
law.
(e) An English court may refuse to give effect to Clause
25(B) of the Agreement in respect of the costs of unsuccessful
litigation brought before an English court or where the court
has itself made an order for costs.
(f) Clause 30 of the Agreement may not be effective - it
depends on the nature of the illegality, invalidity or
unenforceability in question.
(g) The provisions of Clause 16(D) of the Agreement may
constitute a charge which, if the Guarantor has an established
place of business in England, requires to be registered under
Section 395 of the Companies Act 1985 and, unless the
prescribed particulars of that charge and a signed copy of the
Agreement are delivered for registration under that Section
within 21 days of the date of the Agreement, that charge may be
void against a liquidator, administrator or creditor of the
Guarantor.
7. This opinion is addressed to you solely for your own use
and benefit and solely for the purpose of the Agreement. It is
not to be transmitted to anyone else nor is it to be relied
upon by anyone else or for any other purpose or quoted or
referred to in any public document or filed with anyone without
our express consent.
Yours faithfully
Linklaters & Paines
Exhibit 12
BROWNING-FERRIS INDUSTRIES, INC.
AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
(Unaudited)
(Dollar Amounts in Thousands)
Three Months
Ended December 31,
---------------------
1994 1993
-------- --------
Earnings Available for Fixed Charges:
Income before minority interest $ 97,515 $ 58,991
Income taxes 65,010 39,327
-------- --------
Income before income taxes
and minority interest 162,525 98,318
Consolidated interest expense 31,261 17,089
Interest expense related to
proportionate share of 50% owned
affiliates 5,241 5,670
Portion of rents representing the
interest factor 6,913 4,523
Less-Equity in earnings of affiliates
less than 50% owned 1,005 91
-------- --------
Total $204,935 $125,509
======== ========
Fixed Charges:
Consolidated interest expense and
interest costs capitalized $ 33,765 $ 21,137
Interest expense and interest costs
capitalized related to proportionate
share of 50% owned affiliates 5,514 5,670
Portion of rents representing the
interest factor 6,913 4,523
-------- --------
Total $ 46,192 $ 31,330
======== ========
Ratio of Earnings to Fixed Charges 4.44 4.01
======== ========
