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CLIFFORD CHANCE
EXECUTION COPY
LONDON PACIFIC GROUP LIMITED
AS BORROWER
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
AS LENDER
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U.S.$50,000,000
MULTICURRENCY TERM FACILITY AGREEMENT
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CONTENTS
<S> <C>
Clause Page
1. Definitions And Interpretation..................................................................1
2. The Facility...................................................................................10
3. Utilisation of the Facility....................................................................11
4. Multicurrency Option...........................................................................12
5. Interest Periods...............................................................................14
6. Payment and Calculation of Interest............................................................15
7. Letter of Credit Commission....................................................................15
8. Market Disruption and Alternative Interest Rates...............................................16
9. Borrower's Liabilities in relation to Letters of Credit........................................17
10. Repayment......................................................................................17
11. Cancellation and Prepayment....................................................................18
12. Taxes..........................................................................................18
13. Tax Receipts...................................................................................19
14. Increased Costs................................................................................20
15. Illegality.....................................................................................21
16. Mitigation of Adverse Circumstances............................................................21
17. Representations................................................................................21
18. Financial Information..........................................................................24
19. Financial Condition............................................................................25
20. Covenants......................................................................................28
21. Events Of Default..............................................................................29
22. Commitment Commission and Fees.................................................................32
23. Costs and Expenses.............................................................................33
24. Additional Borrowers and Guarantors............................................................34
25. Guarantee And Indemnity of the Parent..........................................................35
26. Default Interest and Break Costs...............................................................39
27. Borrower's Indemnities.........................................................................40
28. Currency of Account and Payment................................................................41
29. Payments.......................................................................................42
30. Set-Off........................................................................................43
31. Assignments....................................................................................43
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32. Calculations and Evidence of Debt..............................................................44
33. Remedies and Waivers, Partial Invalidity.......................................................45
34. Notices........................................................................................46
35. Governing Law..................................................................................47
36. Jurisdiction...................................................................................47
Schedule 1 THE GUARANTORS...................................................................49
Schedule 2 CONDITIONS PRECEDENT.............................................................50
Schedule 3 UTILISATION REQUEST..............................................................51
Schedule 4 EXISTING ENCUMBRANCES............................................................52
Schedule 5 FORM OF COMPLIANCE CERTIFICATE...................................................54
Schedule 6 ACCESSION AGREEMENT..............................................................57
Schedule 7 MANDATORY COSTS..................................................................62
Schedule 8 FORM OF GUARANTEE................................................................64
Schedule 9 FORM OF LETTER OF CREDIT.........................................................69
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THIS AGREEMENT is made on 2 May 2000
BETWEEN
(1) LONDON PACIFIC GROUP LIMITED registered no. 30810 (the "Parent"); and
(2) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND (the "Bank").
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Accession Agreement" means an accession agreement substantially in the
form set out in Schedule 6 (Accession Agreement).
"Additional Borrower" means any company which has become an Additional
Borrower in accordance with Clause 24 (Additional Borrowers and
Guarantors).
"Additional Borrower Conditions Precedent" means those conditions
precedent specified in the Accession Agreement and referred to in Clause
24.1 (Accession of Borrowers).
"Advance" means an advance (as from time to time consolidated, divided
or reduced by repayment, in accordance with the terms hereof) made or to
be made by the Bank hereunder.
"Authorised Signatory" means, in relation to an Obligor, any person who
is duly authorised (in such manner as may be reasonably acceptable to
the Bank) and in respect of whom the Bank has received a certificate
signed by a director or another Authorised Signatory of such Obligor
setting out the name and signature of such person and confirming such
person's authority to act.
"Available Facility" means, at any time, save as otherwise provided
herein, $50,000,000 less:
(a) the Original Dollar Amount of each Advance which has then been made
and not repaid or prepaid prior to the Termination Date;
(b) the Original Dollar Amount of each Letter of Credit which has been
issued by the Bank and for which the Bank has not been reimbursed
prior to the Termination Date.
"Available Group Net Assets" means the value of the net assets of each
member of the Group (excluding investments in subsidiaries) excluding
(a) the assets of London Pacific Life Annuity Company and any other
member of the Group which is not permitted by law or any requirement
(whether or not having the force of law) of any
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competent authority in any jurisdiction in which it is incorporated or
carries on business to guarantee the liabilities of the Borrowers
hereunder or where the giving of such a guarantee would cause it to
breach any applicable solvency or other like ratio required by law or
any such competent authority and (b) any assets to which recourse in
respect of a guarantee of the liabilities of the Borrowers is not
permitted by law or any requirement (whether or not having the force of
law) of any competent authority in any jurisdiction in which the
relevant member of the Group is incorporated or carries on business as
shown in the latest audited consolidated financial statements of the
Parent and the latest relevant financial statements of each member of
the Group.
"Available Letter of Credit Facility" means, at any time and save as
otherwise provided herein, $10,000,000 less the Original Dollar Amount
of each Letter of Credit which has been issued and for which the Bank
has not been reimbursed prior to the Termination Date.
"Borrowers" means the Parent and any Additional Borrower hereunder.
"Business Day" means a day (other than a Saturday or Sunday) which is
not a public holiday and on which banks generally are open for business
in London and New York City and in relation to any date for the payment
or purchase of any sum denominated in:
(c) an Optional Currency (other than the euro), banks generally are open
for business in the principal financial centre of the country of such
Optional Currency; or
(d) the euro, banks generally are open for business in one or more
Participating member states specified by the Bank from time to time.
"Cash Collateral" means, in relation to a Letter of Credit, a deposit in
such interest-bearing account or accounts as the Bank may specify, such
deposit and account to be secured in favour of, and on terms and
conditions acceptable to, the Bank.
"Compliance Certificate" means a certificate substantially in the form
set out in Schedule 5 (Form of Compliance Certificate).
"Dispute" means any dispute referred to in Clause 36 (Jurisdiction).
"Dollar Amount" means:
(a) in relation to an Advance, its Original Dollar Amount as reduced by
the proportion (if any) of such Advance which has been repaid;
(b) in relation to a Letter of Credit at any time
(i) if such Letter of Credit is denominated in dollars, the
maximum actual and contingent liability of the Bank at such
time; and
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(ii) if such Letter of Credit is denominated in an Optional
Currency, the equivalent in dollars of the maximum actual and
contingent liability of the Bank at such time, calculated as
at the later of the dates which falls (a) two (2) Business
Days before its issue date or any renewal date or (b) the most
recent L/C Valuation Date; and
(c) in relation to the Outstandings, the aggregate of the Dollar Amounts
of each outstanding Advance and Letter of Credit.
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union.
"EMU Legislation" means legislative measures of the European Union for
the introduction of changeover to or operation of the euro in one or
more member states being in part legislative measures to implement EMU.
"Encumbrance" means (a) a mortgage, charge, pledge, lien or other
encumbrance securing any obligation of any person, (b) any arrangement
under which money or claims to, or the benefit of, a bank or other
account may be applied, set off or made subject to a combination of
accounts so as to effect discharge of any sum owed or payable to any
person or (c) any other type of preferential arrangement (including any
title transfer and retention arrangement) having a similar effect.
"Event of Default" means any circumstance described as such in Clause
21 (Events of Default).
"Existing Additional Borrower" has the meaning as set out in Clause
24.6 (Authorisation).
"Existing Amount" means, in relation to any Advance and any two
successive Interest Periods relating thereto, the amount of such
Advance at the beginning of the last day of the first of those Interest
Periods less any part thereof falling to be repaid on such day.
"Expiry Date" means, in relation to any Letter of Credit, the date on
which the maximum aggregate liability thereunder is reduced to zero.
"Facility" means the multicurrency term loan facility and letter of
credit facility granted to the Borrowers in this Agreement.
"Facility Office" means the office identified with the Bank's signature
below or such other office as it may from time to time select by notice
to the Parent.
"Group" means the Parent and its subsidiaries for the time being.
"Guarantors" means the Parent and any subsidiary of the Parent which
has then guaranteed amounts owing by the Borrowers hereunder and will,
initially, be the subsidiaries whose names are set out in Schedule 1
(Guarantors) and, in the event that a subsidiary of the Parent should
itself become an Additional Borrower, that subsidiary.
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"Guarantor Conditions Precedent" means those conditions precedent
referred to in Clause 24 (Additional Borrowers and Guarantors).
"Guaranteeing Group" means, at any time, the Parent and each of the
Guarantors (other than the Parent) at that time.
"Guaranteeing Group Net Assets" means the value of the net assets of
each member of the Guaranteeing Group excluding (a) investments in
subsidiaries and (b) any assets to which recourse in respect of a
guarantee of amounts due hereunder is not permitted by law or any
requirement (whether or not having the force of law) of any competent
authority in any jurisdiction in which the relevant member of the
Guaranteeing Group is incorporated or carries on business less loans to
members of the Group which are not members of the Guaranteeing Group as
shown in the latest audited consolidated financial statements of the
Parent and the latest relevant financial statements of each member of
the Guaranteeing Group.
"Initial Repayment Date" means the date falling twenty four months
after the date of this Agreement.
"Interest Period" means, save as otherwise provided herein any of those
periods mentioned in Clause 5.1 (Interest Periods).
"L/C Amount" means:
(a) each sum paid or due and payable by the Bank to the beneficiary of a
Letter of Credit pursuant to the terms of such Letter of Credit; and
(b) all liabilities, costs (including, without limitation, any costs
incurred in funding any amount which falls due from the Bank under the
Letter of Credit), claims, losses and expenses which the Bank incurs
or sustains in connection with a Letter of Credit.
in each case which has not been reimbursed pursuant to Clause 9
(Borrowers' Liabilities in relation to Letters of Credit).
"L/C Commission Rate" means a letter of credit commission rate of 35
pence per (pound)100 for the first 3 months of the letter of credit and
12 pence per (pound)100 thereafter.
"L/C Valuation Date" means the first Business Day which falls six (6)
months after the date hereof and each day falling at six (6) monthly
intervals hereafter.
"Letter of Credit" means, save as otherwise provided herein, a letter
of credit issued or to be issued by the Bank pursuant to Clause 3
(Utilisation of the Facility) substantially in the form as set out in
Schedule 9 (Form of Letter of Credit) or in such other form requested
by the Borrower which is acceptable to the Bank.
"LIBOR" means, in relation to any amount to be advanced to, or owing by
an Obligor hereunder on which interest for a given period is to accrue,
the rate per annum at which the Bank was offering to prime banks in the
London interbank market deposits
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in the currency of such amount for such period at or about 11.00 a.m.
(London time) on the Quotation Date for such period.
"Loan" means the aggregate principal amount for the time being
outstanding hereunder.
"Mandatory Cost Rate" means the rate determined in accordance with
Schedule 7 (Mandatory Costs).
"Margin" means 1.0 per cent. per annum.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Group taken as a whole; (b) the ability of an Obligor
to perform its obligations under this Agreement or any guarantee of the
Agreement; or (c) the validity or enforceability of the Agreement, such
guarantee or the rights or remedies of any party thereunder.
"New Amount" means, in relation to any Advance and any two successive
Interest Periods relating thereto, the amount of such Advance at the
beginning of the second of those Interest Periods, as determined in
accordance with Clause 4.3 (Amounts of Advances).
"Obligors" means the Borrowers and the Guarantors.
"Optional Currency" means any currency (except dollars) which:
(a) is freely transferable and freely convertible into dollars;
(b) is available to banks in the relevant interbank market; and
(c) has been previously approved in writing by the Bank as an optional
currency for the purpose of any utilisation, or denomination of any
Advance during an Interest Period relating thereto, at least three (3)
Business Days prior to delivery of the Utilisation Request for such
Advance or the request under Clause 4.1 (Parent's Request for Optional
Currency),
but, in the case of the currency of any Participating Member State, the
euro shall be an Optional Currency only in the form of the euro unit.
"Original Dollar Amount" means, in relation to an Advance:
(a) where such Advance came into existence as a result of a drawing under
the Facility, the amount specified as such in the Utilisation Request
relating thereto;
(b) where such Advance came into existence upon the consolidation of two
or more Advances, the aggregate of the Dollar Amounts of the Advances
so consolidated; and
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(c) where such Advance came into existence upon the division of an
Advance, the amount specified as such by the Parent pursuant to Clause
5.4 (Division of Advances).
"Outstanding Amounts" has the meaning as set out in Clause 25.10
(Suspense Accounts).
"Outstandings" means at any time, the aggregate of the Dollar Amounts
of each outstanding Advance and the Dollar Amounts of the maximum
actual and contingent liabilities of the Banks in respect of each
outstanding Letter of Credit.
"Participating Member State" means any member state which has adopted
the euro as its lawful currency at the relevant time.
"Permitted Encumbrance" means:
(a) any Encumbrance existing on the date hereof as specified in Schedule 4
(Existing Encumbrances) and provided that the principal amount secured
thereby is not hereafter increased; or
(b) any Encumbrance on any property or assets which is outstanding at the
time such property or assets are acquired by a member of the Group and
provided that the principal amount secured thereby is not increased
after its acquisition; or
(c) any Encumbrance created by a member of the Group prior to and not
created or agreed to be created in contemplation of its becoming a
member of the Group and provided that the principal amount secured
thereby is not subsequently increased.
"Potential Event of Default" means any event which may become (with the
passage of time, the giving of notice, the making of any determination
hereunder or any combination thereof) an Event of Default.
"Proceedings" means any proceedings referred to in Clause 36
(Jurisdiction).
"Quotation Date" means, in relation to any period for which an interest
rate is to be determined hereunder, the day on which quotations would
ordinarily be given by prime banks in the relevant interbank market for
deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that period, provided that,
if, for any such period, quotations would ordinarily be given on more
than one date, the Quotation Date for that period shall be the last of
those dates.
"Relevant Entity" means any subsidiary of the Parent (including a
Guarantor) and any holding company of any such subsidiary.
"Repayment Date" means the Initial Repayment Date or, if the Bank has
agreed to an extension of the date for repayment of the Loan pursuant
to Clause 10.2 (Consent to Request for Extension), the then latest date
for repayment of the Loan.
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"Repeated Representations" means each of the representations set out in
Clauses 17.1 (Status), 17.3 (Binding Obligations), 17.4 (Execution of
this Agreement), 17.7 (No Material Proceedings), 17.10 (Validity and
Admissibility in Evidence), 17.11 (Claims Pari Passu) and 17.17 (No
Event of Default).
"Subsequent Participant" means a Member State that adopts the euro as
its lawful currency after 1 January 1999.
"Term" means, in relation to a Letter of Credit, the period from its
Utilisation Date until its Expiry Date.
"Termination Date" means the day which is one month prior to the
Repayment Date.
"Treaty on European Union" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastrict Treaty
(which was signed at Maastrict on 7 February 1992 and came into force
on 1 November 1993).
"Unpaid Sum" means the unpaid balance of any of the sums referred to in
Clause 26.1 (Default Interest Periods).
"Utilisation Date" means, in relation to an Advance, the date on which
it is to be made and, in relation to a Letter of Credit, the date on
which it is to be issued.
"Utilisation Request" means a request substantially in the form set out
in Schedule 3 (Utilisation Request).
1.2 Interpretation
Any reference in this Agreement to:
the "Bank" shall be construed so as to include its and any subsequent
successors in accordance with their respective interests;
"borrowings" means any obligation for the payment or repayment of
money, whether present or future in respect of:
(a) amounts raised by borrowing and outstanding under any loan agreement
or acceptance under any acceptance credit facility;
(b) amounts raised and outstanding under any bill discounting or note
purchase facility;
(c) amounts raised and outstanding under any debenture, loan stock
instrument or commercial paper programme;
(d) the amount of any liability in respect of leases or hire purchase
contracts which would, in accordance with US GAAP (as used in the
Parent's most recent audited annual consolidated financial statements
from time to time) be treated as finance or capital leases (but
excluding any such finance or capital leases which have a value of
less than (pound)200,000);
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(e) the amount of any liability in respect of the purchase price for
property of any description (real or personal) or works or services or
any combination thereof the payment of which is deferred for a period
in excess of six months after delivery or performance; and
(f) amounts raised under any other transaction (including, without
limitation, any forward sale or purchase agreement) having the
commercial effect of a borrowing entered into by a person in order to
enable such person to finance its operations or capital requirements,
but shall not include guarantees or other indebtedness of a contingent
nature.
"connected person" has the meaning given to that term in Section 839 of
the Income and Corporation Taxes Act 1988;
"continuing" shall be construed, in relation to an Event of Default, as
a reference to an Event of Default which has not been waived in
accordance with the terms hereof;
"control" has the meaning given to that term in Section 416 of the
Income and Corporation Taxes Act 1988;
the "equivalent" on any date in one currency (the "first currency") of
an amount denominated in another currency (the "second currency") is a
reference to the amount of the first currency which could be purchased
with the amount of the second currency at the spot rate of exchange
quoted by the Bank at or about 11.00 a.m. on such date for the purchase
of the first currency with the second currency;
a "holding company" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned
company or corporation is a subsidiary;
"indebtedness" shall be construed so as to include any obligation
(whether incurred as principal or as surety) for the payment or
repayment of money, whether present or future, actual or contingent;
a "law" shall be construed as any law (including common or customary
law), statute, constitution, decree, judgment, treaty, regulation,
directive, bye-law, order or any other legislative measure of any
government, supranational, local government, statutory or regulatory
body or court;
a "member state" shall be construed as a reference to a member state of
the European Union;
a "month" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
succeeding calendar month save that, where any such period would
otherwise end on a day which is not a business day, it shall end on the
next succeeding business day, unless that day falls in the calendar
month succeeding that in which it would otherwise have ended, in which
case it shall end on the immediately preceding business day Provided
that, if a period starts on the
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last business day in a calendar month or if there is no numerically
corresponding day in the month in which that period ends, that period
shall end on the last business day in that later month;
a "person" shall be construed as a reference to any person, firm,
company, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing and shall be construed so
as to include their respective successors and assigns in accordance
with their respective interests;
"repay" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "prepay" (or, as the case may be,
the corresponding derivative form thereof);
a "subsidiary" of a company or corporation means any other company or
corporation which is a "subsidiary undertaking" of such company or
corporation as defined pursuant to Section 258 of the Companies Act
1985;
a "successor" shall be construed so as to include an assignee or
successor in title of such party and any person who under the laws of
its jurisdiction of incorporation or domicile has assumed the rights
and obligations of such party under this Agreement or to which, under
such laws, such rights and obligations have been transferred;
"tax" shall be construed so as to include any tax, levy, impost, duty
or other charge of a similar nature (including any penalty or interest
payable in connection with any failure to pay or any delay in paying
any of the same);
"VAT" shall be construed as a reference to value added tax including
any similar tax which may be imposed in place thereof from time to
time;
a "wholly-owned subsidiary" of a company or corporation shall be
construed as a reference to any company or corporation which has no
other members except that other company or corporation and that other
company's or corporation's wholly-owned subsidiaries or persons acting
on behalf of that other company or corporation or its wholly-owned
subsidiaries; and
the "winding-up", "dissolution" or "administration" of, or any other
insolvency event relating to, a company or corporation shall be
construed so as to include any equivalent or analogous proceedings
under the law of the jurisdiction in which such company or corporation
is incorporated or any jurisdiction in which such company or
corporation carries on business including the seeking of liquidation,
winding-up, reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors.
1.3 Currency Symbols
1.3.1 "$" and "dollars" denote lawful currency of the United States
of America and "sterling" denotes lawful currency of the
United Kingdom.
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1.3.2 "euro" means the single currency of the European Union as
constituted by the Treaty on the European Union as referred to
in EMU Legislation and "euro unit" means the currency unit of
the euro as defined in EMU Legislation.
1.4 Agreements and Statutes
Any reference in this Agreement to:
1.4.1 this Agreement or any other agreement or document shall be
construed as a reference to this Agreement or, as the case may
be, such other agreement or document as the same may have
been, or may from time to time be, amended, varied, novated or
supplemented; and
1.4.2 a statute or treaty shall be construed as a reference to such
statute or treaty as the same may have been, or may from time
to time be, amended or, in the case of a statute, re-enacted.
1.5 Headings
Clause and Schedule headings are for ease of reference only.
1.6 Time
Any reference in this Agreement to a time of day shall, unless a
contrary indication appears, be a reference to London time.
1.7 Third Party Rights
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Agreement.
2. THE FACILITY
2.1 Grant of the Facility
The Bank grants to the Parent through the Facility Office, upon the
terms and subject to the conditions hereof, a multicurrency term loan
facility in an aggregate amount of $50,000,000 (fifty million dollars)
or its equivalent from time to time in Optional Currencies.
2.2 Purpose and Application
The Facility is intended for general corporate purposes and,
accordingly, the Parent shall apply all amounts raised by it hereunder
in or towards satisfaction of its general corporate financing
requirements and the Bank shall not be obliged to concern itself with
such application.
2.3 Conditions Precedent
Save as the Bank may otherwise agree, none of the Borrowers may deliver
any Utilisation Request unless the Bank has confirmed to the Parent
that it has received all
<PAGE>
of the documents and other evidence listed in Schedule 2 (Conditions
Precedent) and that each is, in form and substance, satisfactory to the
Bank.
3. UTILISATION OF THE FACILITY
3.1 Utilisation Conditions
Save as otherwise provided herein, an Advance will be made by the Bank
to any Borrower or a Letter of Credit will be issued by the Bank on a
request by the Parent if:
3.1.1 not less than three (3) (or, if such Advance or Letter of
Credit is to be denominated in sterling, two (2)) Business
Days before the proposed date for the making of such Advance
or the issuing of the Letter of Credit, the Parent has
delivered to the Bank a completed Utilisation Request
therefor;
3.1.2 the Utilisation Date is a Business Day which is or precedes
the Termination Date;
3.1.3 the Utilisation Date is not less than five (5) Business Days
after the date upon which the Facility was previously
utilised;
3.1.4 (in respect of an Advance) the proposed Original Dollar Amount
of such Advance is a minimum amount of $1,000,000 and in
multiples of $500,000 (or, if less, equal to the Available
Facility);
3.1.5 (in respect of a Letter of Credit) the Bank has approved the
terms of the Letter of Credit (which, unless the Bank
otherwise agrees in writing, shall be substantially in the
form set out in Schedule 9 (Form of Letter of Credit)), the
purpose of its issue and the identity of the beneficiary;
3.1.6 (in respect of a Letter of Credit) the proposed Original
Dollar Amount of such Letter of Credit does not exceed the
Available Letter of Credit Facility on the Utilisation Date,
and when aggregated with each other Letter of Credit then in
issue and Advance outstanding does not exceed the Available
Facility on the Utilisation Date;
3.1.7 the proposed Original Dollar Amount of such Advance does not
exceed the Available Facility on the Utilisation Date;
3.1.8 (in respect of a Letter of Credit) the proposed Term is a
period not exceeding twelve (12) months, ending on or before
the Repayment Date;
3.1.9 (in respect of an Advance) the interest rate applicable to
such Advance during its first Interest Period would not fall
to be determined pursuant to Clause 8.1 (Market Disruption,
Substitute Interest Period and Interest Rate); and
3.1.10 on and as of the proposed Utilisation Date, (a) no Potential
Event of Default or Event of Default has occurred which is
continuing and has not been waived or would result from the
making of such Advance or issue of such Letter of Credit; (b)
no petition has been presented (which remains outstanding) for
the winding up of the Borrower wishing to borrow an Advance or
have the Letter
<PAGE>
of Credit issued; and (c) the Repeated Representations are
true in all material respects on and as of the Utilisation
Date.
3.2 Completion of Letters of Credit
The Bank is authorised to issue any Letter of Credit pursuant to Clause
3.1 (Utilisation Conditions for the Facility) by:
3.1 completing the issue date and the proposed Expiry Date of such
Letter of Credit; and
3.2 executing and delivering such Letter of Credit to the relevant
recipient on the Utilisation Date.
3.3 Renewal of a Letter of Credit
3.3.1 Not less than three (3) Business Days before the Expiry Date
of a Letter of Credit the Borrower which requested such Letter
of Credit may, by written notice to the Agent, request that
the Term of such Letter of Credit be extended.
3.3.2 The Bank shall treat such request in the same way as a
Utilisation Request for a Letter of Credit.
3.3.3 The terms of each renewed Letter of Credit shall be the same
as those of the relevant Letter of Credit immediately prior to
its renewal, save that its Term shall commence on the date
which was the Expiry Date of such Letter of Credit immediately
prior to its renewal and shall end on the proposed Expiry Date
specified in such request.
4.4 The Bank is authorised to amend any such Letter of Credit
pursuant to such request if the conditions set out in this
Agreement have been complied with.
4. MULTICURRENCY OPTION
4.1 Parent's Request for Optional Currency
The Parent may, not less than five (5) Business Days' before the first
day of an Interest Period, request (by notice to the Bank), that any
Advance be denominated in any Optional Currency during any Interest
Period relating thereto, in which event such Advance shall, subject to
Clause 4.2 (Conditions for Denomination in an Optional Currency), be
denominated in such Optional Currency. If the Parent does not make such
a request, each Advance shall be denominated in the currency in which
it was denominated during the preceding Interest Period.
4.2 Conditions for Denomination in an Optional Currency
If an Advance is to be denominated in an Optional Currency during any
Interest Period relating thereto, but:
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4.2.1 no later than 11.00 a.m. on the Quotation Date for such
Interest Period, the Bank notifies the Parent that the Bank is
of the opinion that it is not feasible for such Advance to be
made in such Optional Currency or, as the case may be,
denominated in such Optional Currency; or
4.2.2 to give effect to such request would cause the Outstandings to
be denominated in more than 5 Optional Currencies,
the Bank shall notify the Parent and such Advance shall be denominated
in dollars.
4.3 Amounts of Advances
The amount of an Advance during an Interest Period relating thereto (in
determining which it shall be assumed that any part of such Advance
falling to be repaid on or before the last day of the preceding
Interest Period, if any, relating thereto is duly repaid) shall be:
4.3.1 the Dollar Amount of such Advance if such Advance is to be
denominated in dollars during such Interest Period; or
4.3.2 if such Advance is to be denominated in an Optional Currency,
the amount of such Optional Currency which could be purchased
with the Dollar Amount of such Advance at the spot rate of
exchange quoted by the Bank at or about 11.00 a.m. on the
third Business Day preceding the first day of such Interest
Period for the purchase of such Optional Currency with
dollars.
4.4 Currency Change
If an Advance is to be denominated in different currencies during two
successive Interest Periods, then, on the last day of the first of
those Interest Periods:
4.4.1 the Bank shall:
(a) apply an amount equal to the New Amount of such Advance in or
towards the purchase of the Existing Amount of such Advance;
and
(b) pay any portion of the amount which is not applied in
accordance with sub-clause 4.4.1(a) to the Parent or, if an
Event of Default shall have occurred and the Bank so elects,
retain any such portion for its own account, any amount so
retained by the Bank being treated as if it were a prepayment
made by the Parent under Clause 11.2 (Prepayment); and
4.4.2 the Parent shall pay to the Bank a sum equal to the amount (if
any) by which the Existing Amount of such Advance exceeds the
portion thereof purchased by the Bank pursuant to sub-clause
4.4.1(a).
4.5 Same Currency
If an Advance is to be denominated in the same Optional Currency during
two successive Interest Periods and there is any difference between the
Existing Amount of
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such Advance and its New Amount, then, on the last day of the first of
those Interest Periods:
4.5.1 if the Existing Amount of such Advance exceeds its New Amount,
the Parent shall pay to the Bank an amount equal to the amount
of such excess; or
4.5.2 if the New Amount of such Advance exceeds its Existing Amount:
(a) the Bank shall pay to the Parent an amount equal to
the amount of such excess; or
(b) if an Event of Default shall have occurred and the
Bank so elects, no such payments shall be made and a
sum equal to the aggregate amount which would have
been so payable shall be treated as having been
prepaid by the Parent under Clause 11.2 (Prepayment).
5. INTEREST PERIODS
5.1 Interest Periods
The period for which an Advance is outstanding shall be divided into
successive periods each of which (other than the first, which shall
begin on the day such Advance is made) shall start on the last day of
the preceding such period.
5.2 Duration
The duration of each Interest Period shall, save as otherwise provided
herein, be one, three or six months, or such other period as the Parent
requests and the Bank agree, in each case as the Parent may, by not
less than three (or, if the Advance to which such Interest Period
relates is denominated in sterling, two) Business Days' prior notice to
the Bank select provided that:
5.2.1 if the Parent fails to give such notice of its selection in
relation to an Interest Period, the duration of that Interest
Period shall, subject to sub-clauses 5.2.2 and 5.2.3, be three
months;
5.2.2 the Parent may select an Interest Period of less than one
months' duration so long as a Repayment Date occurs within one
month of the date on which such Interest Period commences; and
5.2.3 any Interest Period which would otherwise end during the month
preceding, or extend beyond, a Repayment Date shall be of such
duration that it shall end on that Repayment Date.
5.3 Consolidation of Advances
If two or more Interest Periods relating to Advances denominated in the
same currency end at the same time, then, on the last day of those
Interest Periods, those Advances shall be consolidated into and treated
as a single Advance.
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5.4 Division of Advances
The Parent may, by not less than five Business Days' prior notice to
the Bank, direct that any Advance shall, at the beginning of any
Interest Period relating thereto, be divided into (and thereafter, save
as otherwise provided herein, treated in all respects as) two or more
Advances having such Original Dollar Amounts (in aggregate, equalling
the Dollar Amount of the Advance being so divided) as shall be
specified by the Parent in such notice, provided that the Parent shall
not be entitled to make such a direction if any Advance thereby coming
into existence would have an Original Dollar Amount of less than
$5,000,000.
5.5 Consolidated and Divided Advances
For the purpose of Clause 4 (Multicurrency Option), an Advance which
comes into existence upon the consolidation of two or more existing
Advances or the division of an existing Advance shall be treated as
having existed prior to the date on which it comes into existence and:
5.5.1 in the case of a consolidated Advance, having an amount equal
to the aggregate of the amounts of the Advances so
consolidated; and
5.5.2 in the case of a divided Advance, having an amount equal to
the portion of the Advance so divided which bears the same
proportion to the amount of the Advance so divided as the
Dollar Amount of the Advance coming into existence bears to
the Dollar Amount of the Advance so divided.
6. PAYMENT AND CALCULATION OF INTEREST
6.1 Payment of Interest
On the last day of each Interest Period the Parent shall pay accrued
interest on the Advance to which such Interest Period relates.
6.2 Calculation of Interest
The rate of interest applicable to an Advance from time to time during
an Interest Period relating thereto shall in relation to an Advance be
the rate per annum which is the sum of the Mandatory Cost Rate, the
Margin and LIBOR on the Quotation Date therefor.
7. letter of credit commission
The Parent shall, in respect of each Letter of Credit, pay to the Bank
a letter of credit commission in the currency in which the relevant
Letter of Credit is denominated at the L/C Commission Rate on the
maximum actual and contingent liabilities of the Bank under the
relevant Letter of Credit. Such letter of credit commission shall be
paid in advance in respect of each successive period of three months
(or such shorter period as shall end on the relevant Expiry Date) which
begins during the Term of the relevant
<PAGE>
Letter of Credit, the first such payment to be made on the Utilisation
Date for such Letter of Credit and thereafter on the first day of each
such period.
8. MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES
8.1 Market Disruption, Substitute Interest Period and Interest Rate
If, as a result of circumstances affecting the London Interbank Market
generally, at 11:00 a.m. on the Quotation Date for any Interest Period
relating to an Advance, the Bank was not offering to prime banks in the
London Interbank Market deposits in the currency of such Advance for
the proposed duration of such Interest Period then, notwithstanding the
provisions of Clauses 5 (Interest Periods) and 6 (Payment and
Calculation of Interest),
8.1.1 the duration of that Interest Period shall be one month or, if
less, such that it shall end on the next Repayment Date; and
8.1.2 the rate of interest applicable to such Advance from time to
time during such Interest Period shall be the rate per annum
which is the sum of the Mandatory Cost Rate (in the case of an
Advance denominated in sterling), the Margin and the rate per
annum determined by the Bank to be that which expresses as a
percentage rate per annum the cost to it of funding such
Advance during such Interest Period from whatever sources it
may select.
8.2 Alternative Interest Rate
If the interest rate applicable to an Advance during an Interest Period
falls to be determined pursuant to Clause 8.1 (Market Disruption,
Substitute Interest Period and Interest Rate):
8.2.1 the Bank shall notify the Parent of such event;
8.2.2 if the Bank or the Parent so requires, within five days of
such notification the Bank and the Parent shall enter into
negotiations with a view to agreeing a substitute basis for
determining the rates of interest from time to time applicable
to the Advances and/or upon which the Advances may be
maintained (whether in dollars, sterling or some other
currency) thereafter; and
8.2.3 if the Bank has required the Parent to enter into such
negotiations, the Bank may declare (any such declaration to be
binding on the Borrowers) that each Advance shall become due
and payable on the last day of its then current Interest
Period unless by then a substitute basis has been agreed in
relation thereto.
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9. BORROWER'S LIABILITIES IN RELATION TO LETTERS OF CREDIT
9.1 Right to make Payments under Letters of Credit
Each Bank shall be entitled to make any payment in accordance with the
terms of the relevant Letter of Credit without any reference to or
further authority from the Borrower or any other investigation or
enquiry. Each Borrower irrevocably authorises the Bank to comply with
any demand under a Letter of Credit which is valid on its face.
9.2 Revaluation of Outstandings
On each L/C Valuation Date, the Bank shall calculate the Outstandings
(having regard to changes in the Dollar Amounts of the Letters of
Credit which may arise as a result of currency fluctuations) and the
Bank shall notify the Parent of the amount, if any (the "Excess
Amount") by which the Outstandings exceed the Available Facility and
the Parent shall:
9.2.1 procure that the Bank's obligations under any Letters of
Credit are reduced by an amount no less than the Excess
Amount; or
9.2.2 secure such Excess Amount by providing Cash Collateral in an
amount no less than the Excess Amount.
10. REPAYMENT
10.1 Repayment and Extension Option
Each Borrower shall repay its respective proportion of the Loan on the
Initial Repayment Date provided that, one year after the date hereof
and annually thereafter until the Termination Date, the Parent may
within 90 days after delivery to the Bank of its audited consolidated
financial statements for any financial year (commencing with the
financial year ended 2000) request the Bank for an extension by twelve
months of the date on which the Loan shall be repaid, whereupon the
Bank shall respond within 90 days of such request.
10.2 Consent to Request for Extension
If the Bank consents to a proposed extension, then the date for
repayment of the Loan shall be extended by twelve months to the date
falling twelve months after the Initial Repayment Date (or, if the date
for repayment of the Loan has previously been extended, the then latest
date for repayment of the Loan). On the first Business Day after which
the Loan falls finally due to be repaid the Available Facility shall
reduce to zero.
<PAGE>
11. CANCELLATION AND PREPAYMENT
11.1 Cancellation
The Parent may, by giving to the Bank not less than thirty (30) days'
prior written notice to that effect, cancel the whole or any part
(being a minimum amount of $500,000) of the Available Facility.
11.2 Prepayment
The Parent or any Additional Borrower may, if the Parent has given to
the Bank not less than five (5) days' prior written notice to that
effect, prepay the whole or any part of any Advance borrowed by it such
that the Dollar Amount of such Advance will be reduced by the minimum
amount of $1,000,000 and integral multiples of $500,000 on the last day
of any Interest Period relating to such Advance; any payment so made
shall satisfy pro tanto the relevant Borrowers' obligation under Clause
10.1 (Repayment and Extension Option) in inverse chronological order.
11.3 Reborrowing
The Borrowers shall, subject to the other provisions of this Agreement,
be entitled to reborrow any amount prepaid pursuant to Clause 11.2
(Prepayment).
11.4 Cancellation of Letters of Credit
Any Borrower which has requested a Letter of Credit may give the Bank
not less than ten (10) Business Days' prior notice of its intention to
procure that the Bank's liability under such Letter of Credit is
reduced to zero (whereupon it shall do so).
11.5 Notice of Cancellation or Prepayment
Any notice of cancellation or prepayment given by the Parent pursuant
to this Clause 11 (Cancellation and Prepayment) shall be irrevocable,
shall specify the date upon which such cancellation or prepayment is to
be made and the amount of such cancellation or prepayment and shall
oblige the Parent to make such prepayment or procure such cancellation
on such date.
12. TAXES
12.1 Tax Gross-up
All payments to be made by an Obligor to the Bank hereunder shall be
made free and clear of and without deduction for or on account of tax
unless such Obligor is required to make such a payment subject to the
deduction or withholding of tax, in which case the sum payable by such
Obligor (in respect of which such deduction or withholding is required
to be made) shall be increased to the extent necessary to ensure that
the Bank receives a sum net of any deduction or withholding equal to
the sum which it would have received had no such deduction or
withholding been made or required to be made.
<PAGE>
12.2 Section 349 Bank Exception
Notwithstanding the provisions of Clause 12.1 (Tax Gross-up), no
Obligor shall be obliged to increase the amount of any payment
hereunder to the Bank pursuant to Clause 12.1 (Tax Gross-up) if the
requirement to make a deduction or withholding arises as a consequence
of the Bank not being recognised as a bank for the purposes of Section
349 of the Income and Corporation Taxes Act 1988 (a "Section 349
Bank").
12.3 Section 349 Bank Representation
The Bank represents that it is a Section 349 Bank and undertakes that
it will notify the Parent as soon as reasonably practicable after it
becomes aware thereof if at any time it ceases to be recognised as a
Section 349 Bank.
12.4 Reimbursement of Obligor
If an Obligor is required to increase the amount of any payment
hereunder to the Bank pursuant to Clause 12.1 (Tax Gross-up) and the
Bank is able to apply for or otherwise take advantage of any tax
credit, tax deduction or similar benefit by reason of the withholding
or deduction which such Obligor was required to make, the Bank shall
reimburse to such Obligor, upon receipt by the Bank, such part of any
such credit, deduction or benefit as is properly attributable to such
withholding or deduction and will leave the Bank in no worse position
than it would have been in had there been no tax imposed upon that
payment by such Obligor as aforesaid.
13. TAX RECEIPTS
13.1 Notification of Requirement to Deduct Tax
If, at any time, an Obligor is required by law to make any deduction or
withholding from any sum payable by it hereunder (or if thereafter
there is any change in the rates at which or the manner in which such
deductions or withholdings are calculated), such Obligor shall notify
the Bank thereof as soon as reasonably practicable after it becomes
aware of the same.
13.2 Evidence of Payment of Tax
If an Obligor makes any payment hereunder in respect of which it is
required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under
applicable law and shall as soon as reasonably practicable deliver to
the Bank an original receipt (or a certified copy thereof) issued by
such authority evidencing the payment to such authority of all amounts
so required to be deducted or withheld in respect of such payment.
13.3 Tax and Other Affairs
No provision of this Agreement shall interfere with the right of the
Bank to arrange its tax or any other affairs in whatever manner it
thinks fit, oblige the Bank to claim any
<PAGE>
credit, relief, remission or repayment in respect of any payment under
Clause 12 (Taxes) in priority to any other credit, relief, remission or
repayment available to it nor oblige the Bank to disclose any
information relating to its tax or other affairs or any computations in
respect thereof.
14. INCREASED COSTS
14.1 Increased Costs
If, by reason of (a) any change in law or in its interpretation or
administration and/or (b) compliance with any request or requirement
relating to the maintenance of capital or any other request from or
requirement of any central bank or other fiscal, monetary or other
authority:
14.1.1 the Bank or any holding company of the Bank is unable to
obtain the rate of return on its capital which it would have
been able to obtain but for the Bank's entering into or
assuming or maintaining a commitment, issuing or performing
its obligations under this Agreement or any Letter of Credit;
or
14.1.2 the Bank or any holding company of the Bank incurs a cost as a
result of the Bank's entering into or assuming or maintaining
a commitment or performing its obligations under this
Agreement or any Letter of Credit; or
14.1.3 there is an increase in the cost to the Bank or any holding
company of the Bank of funding or maintaining the Advances,
any Unpaid Sum or any Letter of Credit,
then the Obligor shall, from time to time on demand of the Bank,
promptly pay to the Bank amounts sufficient to indemnify the Bank or to
enable the Bank to indemnify its holding company from and against, as
the case may be, (a) such reduction in the rate of return of capital,
(b) such cost or (c) such increased cost.
14.2 Increased Costs Claims
If the Bank intends to make a claim pursuant to Clause 14.1 (Increased
Costs), it shall notify the Parent of the event giving rise to such
claim.
14.3 Exclusions
Notwithstanding the foregoing provisions of this Clause 14 (Increased
Costs), the Bank shall not be entitled to make any claim in respect of:
14.3.1 any cost, increased cost or liability as referred to in Clause
14.1 (Increased Costs) to the extent the same is compensated
by the Mandatory Cost Rate; or
14.3.2 any cost, increased cost or liability compensated by Clause 12
(Taxes).
<PAGE>
15. ILLEGALITY
If, at any time, it is or will become unlawful for the Bank to make,
fund, issue or allow to remain outstanding all or part of the Advances,
then the Bank shall, promptly after becoming aware of the same, deliver
to the Parent a notice to that effect and: 15.1.1 the Bank shall not
thereafter be obliged to make any Advances and the amount of the
Available Facility shall be immediately reduced to zero; 15.1.2 if the
Bank so requires, the Parent shall on such date as the Bank shall have
specified repay any outstanding Advances together with accrued interest
thereon and all other amounts owing hereunder; and
15.1.3 ensure that the liabilities of the Bank under or in respect of
each Letter of Credit is reduced to zero or otherwise secured
by providing Cash Collateral in an amount equal to the Bank's
maximum actual and contingent liabilities under such Letter of
Credit in the currency or currencies of such Letter of Credit.
16. MITIGATION OF ADVERSE CIRCUMSTANCES
If circumstances arise which would, or would upon the giving of notice,
result in:
16.1.1 an increase in the amount of any payment to be made to it for
its account pursuant to Clause 12.1 (Tax Gross-up);
16.1.2 a claim for indemnification pursuant to Clause 14.1 (Increased
Costs); or
16.1.3 the reduction of the Available Facility to zero in accordance
with Clause 15 (Illegality),
then the Bank shall promptly upon becoming aware of the same notify the
Parent thereof and, in consultation with the Parent, take such steps as
may reasonably be open to it to mitigate the effects of such
circumstances, including the transfer of its Facility Office to another
jurisdiction or the transfer of its rights and obligations hereunder to
a person acceptable to the Parent, provided that the Bank shall not be
obliged to take any steps if, in its bona fide opinion, such steps
would have an adverse effect on its business, operation or financial
condition.
17. REPRESENTATIONS
Each Obligor makes the representations and warranties set out in Clause
17.1 (Status) to Clause 17.17 (Event of Default). The Borrowers make the
representations in respect of themselves and the Parent makes the
representations in respect of each of the Guarantors. Each Obligor
acknowledges that the Bank has entered into this Agreement in reliance
on those representations and warranties.
17.1 Status
It is a corporation duly organised under the laws of its jurisdiction
of incorporation.
<PAGE>
17.2 Governing Law and Judgements
In any proceedings taken in its jurisdiction of incorporation in
relation to this Agreement and any guarantee of the obligations of the
Borrowers, the choice of English law as the governing law of this
Agreement and such guarantee and any judgment obtained in England will
be recognised and enforced.
17.3 Binding Obligations
The obligations expressed to be assumed by it in this Agreement and any
guarantee of the obligations of the Borrowers are legal and valid
obligations binding on it and enforceable against it in accordance with
the terms hereof or thereof.
17.4 Execution of this Agreement
Its execution of this Agreement and any guarantee of the obligations of
the Borrowers and its exercise of its rights and performance of its
obligations hereunder and thereunder do not and will not:
17.4.1 conflict with any agreement, mortgage, bond or other
instrument or treaty to which it is a party or which is
binding upon it or any of its assets;
17.4.2 conflict with its constitutive documents; or
17.4.3 conflict with any applicable law.
It has the power to enter into this Agreement and any guarantee of the
obligations of the Borrowers hereunder to which it is a party and all
corporate and other action required to authorise the execution of this
Agreement and any such guarantee and the performance of its obligations
hereunder and thereunder has been duly taken.
17.5 No Winding-up
No member of the Group has taken any corporate action nor have any
other steps been taken or legal proceedings been started or (to the
best of its knowledge and belief) threatened against any member of the
Group for its winding-up, dissolution, administration or
re-organisation (whether by voluntary arrangement, scheme of
arrangement or otherwise) or for the appointment of a receiver,
administrator, administrative receiver, conservator, custodian, trustee
or similar officer of it or of any or all of its assets or revenues.
17.6 No Material Defaults
No member of the Group is in breach of or in default under any
agreement to which it is a party or which is binding on it or any of
its assets to an extent or in a manner which might have a Material
Adverse Effect.
<PAGE>
17.7 No Material Proceedings
No action or administrative proceeding of or before any court or agency
which is reasonably likely to have a Material Adverse Effect on the
business or financial condition of the Guaranteeing Group as a whole
has been started.
17.8 No Material Adverse Change
Since the date as at which the most recent audited financial statements
of the Parent and the most recent audited consolidated financial
statements of the Guarantor were stated to be prepared, there has been
no Material Adverse Effect on the business or financial condition of
the Parent or, as the case may be, any member of the Guaranteeing
Group.
17.9 Written Information
All written information supplied by any member of the Group is true,
complete and accurate in all material respects as at the date it was
given and is not misleading in any respect.
17.10 Validity and Admissibility in Evidence
All acts, conditions and things required to be done, fulfilled and
performed in order (a) to enable it lawfully to enter into, exercise
its rights under and perform and comply with the obligations expressed
to be assumed by it in this Agreement and any guarantee of the
obligations of the Borrowers hereunder to which it is a party, (b) to
ensure that the obligations expressed to be assumed by it in this
Agreement and any such guarantee are legal, valid, binding and
enforceable and (c) to make this Agreement and any such guarantee
admissible in evidence in its jurisdiction of incorporation have been
done, fulfilled and performed.
17.11 Claims Pari Passu
Under the laws of its jurisdiction of incorporation in force at the
date hereof, the claims of the Bank against it under this Agreement and
any guarantee of the obligations of the Borrowers will rank at least
pari passu with the claims of all its other unsecured and
unsubordinated creditors save those whose claims are preferred solely
by any bankruptcy, insolvency, liquidation or other similar laws of
general application
17.12 No Filing or Stamp Taxes
Under the laws of its jurisdiction of incorporation in force at the
date hereof, it is not necessary that this Agreement be filed, recorded
or enrolled with any court or other authority in such jurisdiction or
that any stamp, registration or similar tax be paid on or in relation
to this Agreement.
17.13 Encumbrances
Save for Permitted Encumbrances, no Encumbrance exists over all or any
of the present or future revenues or assets of any member of the Group.
<PAGE>
17.14 No Deduction or Withholding
Under the laws of its jurisdiction of incorporation in force at the
date hereof, it will not be required to make any deduction or
withholding from any payment it may make hereunder.
17.15 Ownership of an Additional Borrower
Each Additional Borrower is a wholly owned subsidiary of the Parent.
17.16 Ownership of the Relevant Entity
Each Relevant Entity is under the control of the Parent.
17.17 No Event of Default
No Event of Default has occurred which is continuing and has not been
waived.
17.18 Repetition of Representations
The Repeated Representations shall be deemed to be repeated by the
relevant Obligor by reference to the facts and circumstances then
existing upon the delivery of each Utilisation Request, on the first
day of each Interest Period, each date on which an Advance is made or
is to be made, each date on which a Letter of Credit is issued or is to
be issued or its Term extended and each date on which a company becomes
(or it is proposed that a company becomes) an Additional Borrower or a
Guarantor.
18. FINANCIAL INFORMATION
18.1 Financial Statements
The Parent shall:
18.1.1 as soon as the same become available, but in any event within
120 days after the end of each of its financial years, deliver
to the Bank the consolidated financial statements of the Group
and each Additional Borrower for such financial year together
with financial statements of each of the Guarantors for such
financial year;
18.1.2 as soon as the same become available, but in any event within
120 days after the end of each half of each of its financial
years, deliver to the Bank the consolidated financial
statements of the Group for such period;
18.1.3 from time to time on the request of the Bank, furnish the Bank
with such information about the business and financial
condition of the Group or any Guarantor as the Bank may
reasonably require including their most recent management
accounts; and
18.1.4 from time to time, promptly after filing of the same, provide
the Bank with a copy of the form 20-F filed by the Parent with
the Securities and Exchange Commission of the United States.
<PAGE>
18.2 Requirements as to Financial Statements
The Parent shall ensure that:
18.2.1 each set of financial statements delivered by it pursuant to
Clause 18.1 (Financial Statements) is prepared in accordance
with US GAAP (or, in the case of a Guarantor or any other
Additional Borrower, in accordance with accounting principles
generally accepted in its jurisdiction of incorporation);
18.2.2 each set of financial statements delivered by it pursuant to
Clause 18.1.1 of has been audited by an internationally
recognised firm of independent auditors licensed to practise
in Jersey (or, in the case of the financial statements of a
Guarantor or any other Additional Borrower, audited (if such
audited financial statements have in any event been produced)
by an internationally recognised firm of independent auditors
licensed to practise in the jurisdiction of incorporation of
such Guarantor or such other Additional Borrower, or, if no
such audited financial statements have been produced,
confirmed by the auditors of the Parent as being the balances
included in the audited consolidated financial statements);
and
18.2.3 within 30 days of publication of the financial statements
referred to in Clauses 18.1.1 and 18.1.2 it delivers to the
Bank a duly completed Compliance Certificate signed by a
director or Authorised Signatory of the Parent evidencing the
compliance by the Parent with the provisions of Clause 19
(Financial Condition).
19. FINANCIAL CONDITION
19.1 Financial Condition
The Parent shall ensure that except subject to Clause 19.4 (Grace
Periods), at all times, the consolidated financial condition of the
Group, as evidenced by the then most recent audited annual or unaudited
semi-annual consolidated financial statements of the Group, shall be
such that:
19.1.1 Liabilities do not exceed Equity;
19.1.2 Equity is not less than $325,000,000;
19.1.3 Operating Profit is no less than 300 per cent. of Interest
Charge;
19.1.4 Operating Cash Flow is no less than 25 per cent. of Net Debt;
19.1.5 the ratio of consolidated current assets of the Group to
consolidated current liabilities of the Group (but so that in
computing consolidated current liabilities there shall be
excluded, if it would otherwise be included therein, all
amounts owed to the Bank hereunder or under any guarantee
hereof) is at least 2:1;
<PAGE>
19.1.6 the value of the aggregate intangible assets of the Group
(including goodwill arising on acquisition which has then been
set against shareholder's equity and the loan to The Berkeley
Govett 1990 Employee Share Option Trust) does not exceed 40
per cent. of the value of the Group's aggregate gross assets
including fixed and current assets of the Group intangible
assets (as aforesaid) and the net assets of the long-term
insurance business (but excluding the embedded after tax value
of policies in force in respect of the long term insurance
business); and
19.1.7 Guaranteeing Group Net Assets are no less than 90 per cent. of
Available Group Net Assets.
19.2 Financial Definitions
The expressions used in this Clause 19 (Financial Condition) shall be
construed in accordance with US GAAP (as used in the then most recent
audited annual consolidated financial statements of the Group) but so
that: "Equity" means the sum of:
(a) the amount paid up or credited as paid up on the issued share capital
of the Parent;
(b) the amounts standing to the credit of the Group's share premium
account (which includes any premium arising on shares issued under the
share option plan); and
(c) the amounts standing to the credit of the Group's capital redemption
reserve account,
plus or minus the amount standing to the credit or debit, as the case
may be, of the consolidated profit and loss account reserve of the
Group, but after deducting therefrom:
(a) the value of goodwill arising on acquisition which has been set
against shareholder's equity excluding any such goodwill arising on
acquisitions on or after 1 January 2000;
(b) amounts attributable to minority interests in subsidiaries; and
(c) any distribution declared, recommended or made to the extent not
provided for in such accounts (other than (a) distributions to a
member of the Group or (b) in the case of a distribution declared,
recommended or made in respect of a period after the date of the
relevant accounts, to the extent that such distribution is covered by
profits which have accrued since that date);
"Interest Charge" means the aggregate, on a consolidated basis, of all
interest or similar charges, incurred by any member of the Group in
respect of borrowings (other than borrowings from another member of the
Group);
<PAGE>
"Liabilities" means the consolidated liabilities of the Group as they
appear in the consolidated balance sheet of the consolidated financial
statements of the Group other than long-term insurance reserves;
"Net Debt" means the principal amount outstanding, on a consolidated
basis, in respect of borrowings by any member of the Group (other than
borrowings from another member of the Group) less cash and short term
investments of any member of the Group provided that short-term
investments shall only be taken into account if such short-term
investments are themselves of investment grade (i.e. debt securities
rated at least BBB or equivalent or equity securities in respect of
such companies traded on a recognised international stock exchange
whose debt securities are rated at least BBB or equivalent or represent
an underlying investment the majority of which is of investment grade);
"Operating Cash Flow" shall have the meaning ascribed thereto in the
notes to the consolidated cash flow statement of the consolidated
financial statements of the Group; and
"Operating Profit" means the consolidated profit or loss, as the case
may be, on ordinary activities of the Group including any net profit or
loss on investments, but before deduction of the Interest Charge and
before taking account of:
(a) any tax paid or payable; and
(b) any exceptional or extraordinary profits, or losses,
during the relevant financial year or financial half-year, as the case
may be;
19.3 Grace Periods
The Parent shall not be in breach of any of its obligations pursuant to
any of the provisions of this Clause 19 (Financial Condition)
concerning the financial condition of the Group unless the financial
condition of the Group fails to satisfy the relevant provisions of
Clause Clauses 19.1.1 to 19.1.6 for more than 14 consecutive days or,
in the case of Clause 19.1.7, the Parent fails to remedy the breach
within 28 days of notice from the Bank of the same.
19.4 Expert Consultation
In the event that the Parent shall prepare its consolidated financial
statements for any financial year on a basis which is not consistent
with the accounting principles used in the consolidated financial
statements for the financial year ended 31st December 1999 then the
Parent and the Bank shall negotiate in good faith with a view to
agreeing such changes to the provisions of Clause 19.1 (Financial
Condition) (if any) as shall be necessary fairly to reflect such
change. If, within sixty (60) days of such negotiation being commenced,
no agreement is reached between the Parent (acting reasonably) and the
Bank as to the necessary changes (if any) to be made to the provisions
of Clause
<PAGE>
19.1 (Financial Condition), then either the Parent or the Bank may
request the senior partner in the auditors of the Parent in the United
Kingdom to appoint a partner in the auditors of the Parent (other than
a partner involved in the auditing of the financial statements of the
Parent or any member of the Group) to act as an expert in determining
any such changes as may be required, and the decision of the auditors
in this regard shall, in the absence of manifest error, be final and
binding upon all the parties.
20. COVENANTS
20.1 Covenants in respect of the Borrowers
Each of the Borrowers shall:
20.1.1 obtain, comply with the terms of and do all that is reasonably
necessary to maintain in full force and effect all
authorisations, approvals, licences and consents required to
be obtained by it in or by the laws and regulations of its
jurisdiction of incorporation to enable it lawfully to enter
into and perform its obligations under this Agreement or to
ensure the legality, validity, enforceability or admissibility
in evidence in its jurisdiction of incorporation of this
Agreement and pay all taxes within any period allowed for
payment of the same (other than any taxes which are being
contested in good faith);
20.1.2 promptly after it becomes aware of the same inform the Bank of
the occurrence of any event which is or would become (with the
passage of time, the giving of notice, the making of any
determination hereunder or any combination thereof) an Event
of Default and, upon receipt of a written request to that
effect from the Bank, confirm to the Bank that, save as
previously notified to the Bank or as notified in such
confirmation, no such event has occurred;
20.1.3 (disregarding purchases made in the ordinary course of
business and without prejudice to Clause 20.2.5) promptly
notify the Bank of any material acquisition made by any member
of the Group and the consideration payable in respect of such
acquisition; and
20.1.4 ensure that at all times the claims of the Bank against it
under this Agreement rank at least pari passu with the claims
of all its other unsecured and unsubordinated creditors save
those whose claims are preferred by any bankruptcy,
insolvency, liquidation or other similar laws of general
application.
20.2 Covenants in respect of the Borrowers, Guarantors and the Group
Each of the Borrowers shall ensure that neither it nor, (in the case of
Clause 20.2.1) any of the Guarantors shall or, (in the case of Clauses
20.2.2, 20.2.3, 20.2.4 and 20.2.5) any member of the Group shall,
without the prior written consent of the Bank (such consent not to be
unreasonably withheld in the case of Clauses 20.2.2, 20.2.3 or
<PAGE>
20.2.4) but so that the Bank shall be entitled to withhold its consent
to any indebtedness which would rank in priority to the claims of the
Bank hereunder:
20.2.1 incur any further additional indebtedness in respect of
borrowings other than (a) borrowings the repayment of which is
expressed to be subordinated to the repayment of amounts owing
hereunder on terms approved by the Bank (such approval not to
be unreasonably withheld or delayed), (b) indebtedness owed to
a Guarantor or any Borrower, (c) indebtedness in a principal
amount not exceeding 10 per cent. of Available Group Net
Assets owed to a member of the Group which is not a Guarantor,
(d) any other borrowings incurred for the primary purpose of
funding the creation or a redemption of units in unit trusts
or of shares in open ended investment schemes, provided that
the aggregate principal amount of such borrowings does not
exceed(pound)12,500,000 (or its equivalent in other
currencies) at any time and provided that each individual
borrowing is not outstanding for a period of more than seven
days and (e) lease, hire purchase or conditional sale or other
like agreements not exceeding(pound)500,000 (or its equivalent
in other currencies) at any one time entered into in the
ordinary course of business;
20.2.2 create or permit to subsist any Encumbrance over all or any of
its present or future revenues or assets other than a
Permitted Encumbrance;
20.2.3 (disregarding sales of stock in trade in the ordinary course
of business) sell, transfer or otherwise dispose of the whole
or a material part of its property or assets the book value of
which is more than 20 per cent. of the book value of the
whole;
20.2.4 make any material change to the nature of the business of the
Group (taken as a whole); or
20.2.5 acquire any assets or business or make any investment during
the term of this Agreement for an aggregate consideration in
moneys or moneys worth exceeding $100,000,000.
21. EVENTS OF DEFAULT
Each of Clause 21.1 (Failure to Pay) to Clause 21.16 (Material Adverse
Change) describes circumstances which constitute an Event of Default
for the purposes of this Agreement.
21.1 Failure to Pay
Any Borrower fails to pay any sum due from it hereunder at the time, in
the currency and in the manner specified herein and such failure
continues for three Business Days after notice from the Bank notifying
it that such sums has not been received.
<PAGE>
21.2 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor
in this Agreement or in any guarantee of this Agreement, notice or
other document, certificate or statement delivered by it pursuant
hereto or in connection herewith is or proves to have been incorrect or
misleading in any material respect when made or deemed to be made.
21.3 Specific Covenants
Subject to this Agreement, any Obligor fails duly to perform or comply
with any of the obligations expressed to be assumed by it in Clause 18
(Financial Information) or Clause 20 (Covenants).
21.4 Financial Condition
Subject to this Agreement, at any time any of the requirements of
Clause 19.1 (Financial Condition) is not satisfied.
21.5 Other Obligations
Any Obligor fails duly to perform or comply with any other obligation
expressed to be assumed by it in this Agreement or in any guarantee of
this Agreement and such failure, if capable of remedy, is not remedied
within ten (10) days after the Bank has given notice thereof to such
Obligor.
21.6 Cross Default
Any indebtedness of any member of the Group is not paid when due, any
indebtedness of any member of the Group is declared to be or otherwise
becomes due and payable prior to its specified maturity, any commitment
for any indebtedness of any member of any member of the Group is
cancelled or suspended by a creditor of any member of the Group or any
creditor of any member of the Group becomes entitled to declare any
indebtedness of any member of the Group due and payable prior to its
specified maturity, provided that it shall not constitute an Event of
Default if the aggregate amount (or its equivalent in other currencies)
of all such indebtedness is less than (pound)1,000,000.
21.7 Insolvency and Rescheduling
Any Obligor is unable to pay its debts as they fall due, commences
negotiations with any one or more of its creditors with a view to the
general readjustment or rescheduling of its indebtedness or makes a
general assignment for the benefit of or a composition with its
creditors.
21.8 Winding-up
A petition is presented (and is not withdrawn within 21 days) unless
the Parent demonstrates to the reasonable satisfaction of the Bank that
such petition is not a bona fide petition or an order for a competent
court is made or an effective resolution is
<PAGE>
passed for the winding-up or dissolution of or for the appointment of
an administrator in respect of any Obligor (other than for the purposes
of a solvent amalgamation or reconstruction, the terms of which have
been previously approved in writing by the Bank such approval not to be
unreasonably withheld or delayed).
21.9 Execution or Distress of Assets
An administrator, receiver, administrative receiver, trustee or similar
officer is appointed of any Obligor or of all or any material part of
its undertakings and assets.
21.10 Event or Proceeding
There occurs in respect of any Obligor in any jurisdiction in which it
operates or carries on a material part of its business any event or
proceeding which is equivalent or analogous to the matters set out in
Clauses 21.8 (Winding-up) or 21.9 (Execution or Distress of Assets)
above.
21.11 Control of the Parent and Ownership of the Additional Borrowers
Any person or group of connected persons (which does not have control
at the date hereof) acquires control of the Parent or any Additional
Borrower ceases to be a wholly owned subsidiary of the Parent.
21.12 Failure to Comply with Final Judgment
Any member of the Group fails to comply with or pay any sum due from it
under any final judgment or any final order made or given by any court
of competent jurisdiction.
21.13 The Group's Business
Any member of the Group ceases to carry on the business it carries on
at the date hereof or enters into any unrelated business.
21.14 Repudiation
An Obligor repudiates this Agreement or does or causes to be done any
act or thing evidencing an intention to repudiate this Agreement.
21.15 Illegality
At any time it is or becomes unlawful for an Obligor to perform or
comply with any or all of its obligations hereunder or any of the
obligations of an Obligor hereunder are not or cease to be legal,
valid, binding and enforceable.
21.16 Material Adverse Change
There is a Material Adverse Effect on the business or financial
condition of the Group (taken as a whole) since the date of the then
latest audited consolidated financial statements of the Group which
give reasonable grounds in the opinion of the Bank to believe that any
Borrower may not (or may be unable to) perform or comply with its
obligations hereunder.
<PAGE>
21.17 Acceleration and Cancellation
Upon the occurrence of an Event of Default and at any time thereafter,
whilst it is continuing, the Bank may by written notice to the Parent:
21.17.1 declare all or any part of the Advances to be immediately due
and payable (whereupon the same shall become so payable
together with accrued interest thereon and any other sums then
owed by the Parent hereunder) or declare all or any part of
the Advances to be due and payable on demand of the Bank;
and/or
21.17.2 require the Parent to procure that the liabilities of the Bank
under each Letter of Credit is promptly reduced to zero and/or
provide Cash Collateral for each Letter of Credit in an amount
specified by the Bank and in the currency of such Letter of
Credit (whereupon the Parent shall do so); and/or
21.17.3 declare that any unutilised portion of the Facility shall be
cancelled, whereupon the same shall be cancelled and the
Available Facility shall be reduced to zero.
21.18 Advances Due on Demand
If, pursuant to Clause 21.17 (Acceleration and Cancellation), the Bank
declares all or any part of the Advances to be due and payable on
demand of the Bank, then, and at any time thereafter, the Bank may by
written notice to the Parent:
21.18.1 require repayment of all or such part of the Advances on such
date as it may specify in such notice (whereupon the same
shall become due and payable on the date specified together
with accrued interest thereon and any other sums then owed by
the Parent hereunder) or withdraw its declaration with effect
from such date as it may specify in such notice; and/or
21.18.2 select as the duration of any Interest Period which begins
whilst such declaration remains in effect a period of six (6)
months or less; and or
21.18.3 call for cash cover in respect of any Letters of Credit for
which the Bank has not received reimbursement on such date as
it may specify in such notice (whereupon the same shall become
due and payable on such date).
22. COMMITMENT COMMISSION AND FEES
22.1 Commitment Commission
The Parent shall pay to the Bank a commitment commission on the amount
of the Available Facility from day to day during the period beginning
on the date hereof and ending on the relevant Repayment Date, such
commitment commission to be calculated at the rate of 0.375 per cent.
per annum on the undrawn portion and payable in arrear on the last day
of each successive period of three months which ends during such period
and on such Repayment Date.
<PAGE>
22.2 Arrangement Fee
The Parent shall pay the following arrangement fees to the Bank:
22.2.1 $75,000 to be paid within thirty (30) days of the date hereof
(or, if earlier, on the date on which the first Advance is
made hereunder); and
22.2.2 if the option to extend is exercised in Clause 10.1 (Repayment
and Extension Option) , $37,500 to be paid within thirty (30)
days of the date on which the extension is granted pursuant to
Clause 10.2 (Consent to Request for Extension).
23. COSTS AND EXPENSES
23.1 Transaction Expenses
The Parent shall, from time to time on demand of the Bank, reimburse
the Bank for all reasonable costs and expenses (including legal fees)
together with any VAT thereon properly incurred by it in connection
with the negotiation, preparation and execution of this Agreement, any
guarantee of this Agreement or any other document referred to in this
Agreement and the completion of the transactions herein contemplated.
23.2 Preservation and Enforcement of Rights
The Parent shall, from time to time on demand of the Bank, reimburse
the Bank for all reasonable costs and expenses (including legal fees)
together with any VAT thereon incurred in or in connection with the
preservation and/or enforcement of any of the rights of the Bank under
this Agreement and any other document referred to in this Agreement
(including, without limitation, any costs and expenses relating to any
investigation as to whether or not an Event of Default might have
occurred or is likely to occur or any steps necessary or desirable in
connection with any proposal for remedying or otherwise resolving an
Event of Default).
23.3 Stamp Taxes
The Parent shall pay all United Kingdom or Jersey stamp, registration
and other taxes to which this Agreement, any guarantee of this
Agreement, any other document referred to in this Agreement or any
judgment given in connection therewith is or at any time may be subject
and shall, from time to time on demand of the Bank, indemnify the Bank
against any liabilities, costs, claims and expenses resulting from any
failure to pay or any delay by the Parent in paying any such tax.
23.4 Amendment Costs
If an Obligor requests any amendment, waiver or consent then the Parent
shall, within five Business Days of demand by the Bank, reimburse the
Bank for all costs and expenses (including legal fees) together with
any VAT thereon incurred by such person in responding to or complying
with such request.
<PAGE>
24. ADDITIONAL BORROWERS AND GUARANTORS
24.1 Accession of Borrowers
The Parent may from time to time with the prior consent of the Bank
(such consent not to be unreasonably withheld or delayed) designate any
wholly-owned subsidiary of the Parent as an Additional Borrower for the
purposes of the Facility in which event the Parent shall deliver or
cause to be delivered to the Bank an Accession Agreement duly executed
by the parties thereto together with all the Additional Borrower
Conditions Precedent specified therein. This Agreement shall thereafter
be read and construed as if each person which is a party to such
Accession Agreement as a proposed Additional Borrower were a party
hereto having all the same rights and obligations of a Borrower and all
references to the "Borrowers" hereunder shall be construed accordingly.
24.2 Agreement to Accession of Borrowers
On granting consent under Clause 24.1 (Accession of Borrowers) to an
Additional Borrower, the Bank shall execute any Accession Agreement
relating to the introduction of such an Additional Borrower.
24.3 Guarantors
The Parent may from time to time designate any subsidiary of the Parent
as a Guarantor and, upon the delivery to the Bank of the Guarantor
Conditions Precedent in a form and substance satisfactory to it, such
subsidiary shall be a Guarantor and all references to the "Guarantors"
shall be construed accordingly.
24.4 Guarantor Conditions Precedent
The following shall include the Guarantor Conditions Precedent:
24.4.1 a guarantee in substantially the form provided by the existing
Guarantors (with such changes in form as the Bank may
reasonably require in the light of legal advice received by
it) guaranteeing amounts owing by the Parent and any
Additional Borrower hereunder;
24.4.2 a copy, certified as a true copy on behalf of such person of
the Memorandum and Articles of Association (or equivalent) of
such subsidiary;
24.4.3 a copy, certified as a true copy on behalf of such person, of
a Board Resolution of such person approving the execution,
delivery and performance of the guarantee and the terms and
conditions thereof and authorising a named person or persons
to sign the same and any documents to be delivered by such
person pursuant thereto;
24.4.4 a certificate of a duly authorised officer of such person
setting out the names and signatures of the persons authorised
on behalf of such person by its Board Resolution referred to
in Clause 24.4.3 above; and
<PAGE>
24.4.5 an opinion in such form as the Bank may reasonably require
relating to the due execution of the guarantee addressed to
the Bank by in-house counsel to the Parent
such subsidiary shall be a Guarantor and all references to the
"Guarantors" shall be construed accordingly.
24.5 Release of Guarantors
The Parent may from time to time by not less than 30 days prior written
notice to the Bank request that any Guarantor be released from its
guarantee of amounts due hereunder and provided that:
24.5.1 following such release the Guaranteeing Group Net Assets will
not be less than 90 per cent. of Available Group Net Assets;
and
24.5.2 if such Guarantor is also a Borrower, there are no Advances
made to that Borrower which are outstanding other than
Advances repaid prior to such release
the Bank will upon expiry of such notice release such Guarantor from
its guarantee of amounts due hereunder and all references to the
"Guarantors" shall be construed accordingly.
24.6 Authorisation
Each of the then existing Additional Borrowers from time to time (the
"Existing Additional Borrowers") authorises the Parent to designate
proposed further Additional Borrowers and Guarantors and to request the
release of Guarantors and to execute on behalf of any such Existing
Additional Borrower an Accession Agreement relating to the introduction
of the proposed Additional Borrower.
25. guarantee and indemnity of the parent
25.1 Guarantee and Indemnity
The Parent hereby:
25.1.1 irrevocably and unconditionally guarantees to the Bank the
proper and punctual performance by each Additional Borrower of
its obligations under this Agreement and undertakes to pay to
the Bank on demand all sums from time to time due and payable
(but unpaid) by each Additional Borrower to the Bank under or
pursuant to this Agreement; and
25.1.2 irrevocably and unconditionally agrees as a separate,
continuing and primary obligation to indemnify the Bank on
demand by the Bank from and against all losses, claims or
costs incurred or suffered by the Bank as a result of this
Agreement or any of the obligations of any Additional Borrower
hereunder being or becoming void, voidable or unenforceable
for any reason whatsoever, whether or not known to the Bank.
<PAGE>
25.2 Obligations not Discharged
The liability of the Parent under this Clause 25 (Guarantee and
Indemnity of the Parent) shall not be discharged, impaired or otherwise
affected by:
25.2.1 the winding-up, dissolution, administration or re-organisation
of any Additional Borrower or any other person or any change
in its status, function, control or ownership; or
25.2.2 any of the obligations of any Additional Borrower or any other
person hereunder or under any security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect; or
25.2.3 any failure on the part of the Bank (whether intentional or
not) to take, perfect or realise any guarantee or security
agreed to be taken in relation to this Agreement; or
25.2.4 any time or other indulgence given or agreed to be given to,
or any composition or other arrangement made with or accepted
from (a) any Additional Borrower in respect of its obligations
hereunder or (b) any person in respect of obligations under
any guarantee or security relating to this Agreement; or
25.2.5 any amendment to this Agreement or any such guarantee or
security; or
25.2.6 any release, discharge or exchange of any such guarantee or
security; or
25.2.7 any other act, event or omission which but for this provision
would or might operate to impair or discharge its liability
hereunder.
25.3 Continuing Obligations
The obligations of the Parent under this Clause 25 (Guarantee and
Indemnity of the Parent) shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever and shall not be considered satisfied by any intermediate
payment or satisfaction of all or any of the obligations of any
Additional Borrower under this Agreement and shall continue in full
force and effect until payment in full of all amounts owing by each
Additional Borrower hereunder.
25.4 Additional Security
The obligations of the Parent under this Clause 25 (Guarantee and
Indemnity of the Parent) are in addition to and not in substitution for
any other guarantee or security which the Bank may now or hereafter
hold for the obligations of any Additional Borrower hereunder and may
be enforced without the Bank first having recourse to any
<PAGE>
such guarantee or security and without the Bank first taking any steps
or proceedings against any Additional Borrower.
25.5 Deferral of Guarantor's Rights
So long as the Parent remains under any actual or contingent liability
under this 25 (Guarantee and Indemnity of the Parent), the Parent shall
not exercise any rights it might have by reason of performance by the
Parent of its obligations hereunder:
25.5.1 to be indemnified by any Additional Borrower; and/or
25.5.2 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank under this
Agreement or of any other guarantee or security taken pursuant
to, or in connection with this Agreement; and/or
25.5.3 to prove in a liquidation or winding-up of any Additional
Borrower in competition with the Bank for any amount
whatsoever owing to the Bank under this Agreement.
<PAGE>
25.6 Discharge by Bank
Any discharge given by the Bank to the Parent in respect of its
obligations under this Clause 25 (Guarantee and Indemnity of the
Parent) or any other agreement reached in relation hereto shall be, and
be deemed always to have been, void if any act on the faith of which
that discharge was given or that agreement was entered into is
subsequently avoided by or in pursuance of any provision of law.
25.7 Payments
All amounts payable by the Parent pursuant to this Clause 25 (Guarantee
and Indemnity of the Parent) shall be made in full without any
deduction or withholding whatsoever by the Parent (whether in respect
of set-off, counterclaim, duties, taxes, charges or otherwise) unless
such deduction or withholding is required by law, in which event the
Parent shall ensure that the deduction or withholding does not exceed
the minimum amount legally required and shall pay to the Bank such
additional amounts so that the net amount received by the Bank will
equal the full amount which would have been received by the Bank had no
such deduction or withholding been made provided that, notwithstanding
this Clause 25.7 and Clauses 10.2 (Section 349 Bank Exception), 12.3
(Section 349 Bank Representation) and 12.4 (Reimbursement of Obligor)
shall apply mutatis mutandis in respect of amounts payable by the
Parent under this Clause 25 (Guarantee and Indemnity of the Parent),
but so that all references thereunder to a Borrower shall be deemed to
be a reference to the Parent for the purposes of this Clause 25
(Guarantee and Indemnity of the Parent).
25.8 Bank Certificate
A certificate signed by an official of the Bank as to any amount due to
the Bank pursuant to this Clause 25 (Guarantee and Indemnity of the
Parent) shall be conclusive evidence save in the case of manifest error
or on any question of law.
25.9 Remedies and Waiver
The Bank's rights under this Clause 25 (Guarantee and Indemnity of the
Parent) are cumulative, may be exercised as often as considered
appropriate and are in addition to rights under the general law. Such
rights (whether arising hereunder or under the general law) shall not
be capable of being waived or varied otherwise than by an express
waiver or variation in writing and in particular any failure to
exercise or any delay in exercising any of such rights shall not
operate as a waiver or variation of that or any other such right; any
defective or partial exercise of any of such rights shall not preclude
any other or further exercise of that or any other such right and no
act or course of conduct or negotiation on the part of the Bank shall
preclude them from exercising any such right or constitute a suspension
or variation of any such right.
25.10 Suspense Accounts
All moneys received, recovered or realised by the Bank by virtue of
Clause 25.1 (Guarantee and Indemnity) may, in the Bank's discretion, be
credited to a suspense or impersonal account and may be held in such
account for so long as the Bank thinks fit
<PAGE>
pending the application from time to time (as the Bank may think fit)
of such moneys in or towards the payment and discharge of any amounts
owing (the "Outstanding Amounts") by any of the Additional Borrowers to
the Bank hereunder. The rate of interest applicable to any amount
standing to the credit of such suspense or impersonal account shall be
the rate per annum which is equal to the rate per annum for the time
being in respect of the Outstanding Amounts. The Bank shall on the last
day of each Interest Period in respect of the Outstanding Amounts apply
the amount of interest for the time being accrued on such suspense or
impersonal account in or towards payment of interest due to the Bank on
each such day under this Agreement.
26. DEFAULT INTEREST AND BREAK COSTS
26.1 Default Interest Periods
If any sum due and payable by an Obligor hereunder is not paid on the
due date therefor in accordance with Clause 29 (Payments) or if any sum
due and payable by an Obligor under any judgment of any court in
connection herewith is not paid on the date of such judgment, the
period beginning on such due date or, as the case may be, the date of
such judgment and ending on the date upon which the obligation of such
Obligor to pay such sum is discharged shall be divided into successive
periods, each of which (other than the first) shall start on the last
day of the preceding such period and the duration of each of which
shall be selected by the Bank.
26.2 Default Interest
During each period relating to an Unpaid Sum as referred to in Clause
26.1 (Default Interest Periods), an Unpaid Sum shall bear interest at
the rate per annum which is the sum from time to time of one per cent.
per annum , in the case of an Advance denominated in dollars the Margin
at such time and LIBOR on the Quotation Date therefor, and in the case
of an Advance denominated in sterling, the Mandatory Cost Rate, the
Margin at such time and LIBOR on the Quotation Date therefor provided
that:
26.2.1 if, for any such Interest Period, LIBOR cannot be determined,
the rate of interest applicable to such Unpaid Sum shall be
the rate per annum which is the sum of one per cent., the
Mandatory Cost Rate (in the case of an Advance denominated in
sterling), the Margin at such time and the rate per annum
equal to the cost to the Bank of funding such Unpaid Sum for
such period from whatever sources as it may select;
26.2.2 if such Unpaid Sum relates to all or part of an Advance which
became due and payable on a day other than the last day of an
Interest Period relating thereto, the first such period
applicable to such Unpaid Sum shall be of a duration equal to
the unexpired portion of that Interest Period relating to that
Advance; and
<PAGE>
26.2.3 the rate of interest applicable to such Unpaid Sum during such
period shall be that which exceeds by one per cent. the rate
which would have been applicable to it had it not so fallen
due.
26.3 Payment of Default Interest
Any interest which shall have accrued under Clause 26.2 (Default
Interest) in respect of an Unpaid Sum shall be due and payable and
shall be paid by the Obligor owing such Unpaid Sum on the last day of
the period by reference to which it is calculated as notified by the
Parent to the Bank.
26.4 Break Costs
If the Bank receives or recovers all or any part of an Advance
otherwise than on the last day of an Interest Period relating to that
Advance or such part thereof (except pursuant to Clause 15
(Illegality), the relevant Borrower shall pay to the Bank on demand an
amount equal to the amount (if any) by which (a) the additional
interest which would have been payable on the amount so received or
recovered had it been received or recovered on the last day of that
Interest Period exceeds (b) the amount of interest which would have
been payable to the Bank on the last day of Interest Period in respect
of a deposit in the currency in which such Advance or part thereof is
denominated equal to the amount so received or recovered placed by it
with a prime bank in London for a period starting on the date of such
receipt or recovery and ending on the last day of that Interest Period.
27. BORROWER'S INDEMNITIES
27.1 Parent's Indemnity
The Parent undertakes to indemnify the Bank against:
27.1.1 any reasonable cost, claim, loss, expense (including legal
fees) or liability together with any VAT thereon, which it may
sustain or incur as a consequence of the occurrence of any
Event of Default or any default by the Parent in the
performance of any of the obligations expressed to be assumed
by it in this Agreement;
27.1.2 any cost or loss it may suffer or incur as a result of its
entering into, or performing, any foreign exchange contract
for the purposes of Clause 4 (Multicurrency Option);
27.1.3 any cost or loss it may suffer or incur as a result of its
funding or making arrangements to fund an Advance or its
issuing or making arrangements to issue a Letter of Credit
requested by the Parent but not made or issued by reason of
the operation of any one or more of the provisions hereof; and
27.1.4 any loss it may suffer or incur as a result of any change to
the Interest Period or the currency of any Advance as a result
of the operation of this Agreement;
<PAGE>
27.1.5 any sum paid or due and payable by the Bank in connection with
such Letter of Credit; and
27.1.6 all liabilities, costs (including, without limitation, any
costs incurred in funding any amount which falls due from such
Bank in connection with such Letter of Credit), claims, losses
and expenses which such Bank may at any time incur or sustain
in connection with any Letter of Credit.
27.2 Currency Indemnity
If any sum (a "Sum") due from an Obligor under this Agreement or any
order, judgment award or decision given or made in relation hereto has
to be converted from the currency (the "First Currency") in which such
Sum is payable into another currency (the "Second Currency") for the
purpose of:
27.2.1 making or filing a claim or proof against such Obligor; or
27.2.2 obtaining or enforcing an order, judgment in any court or
other tribunal,
the relevant Obligor shall indemnify and hold harmless each of the
persons to whom such Sum is due from and against any loss suffered or
incurred as a result of any discrepancy between (a) the rate of
exchange used for such purpose to convert such Sum from the First
Currency into the Second Currency and (b) the rate or rates of exchange
at which such person may in the ordinary course of business purchase
the First Currency with the Second Currency upon receipt of a Sum paid
to it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof.
28. CURRENCY OF ACCOUNT AND PAYMENT
28.1 The dollar is the currency of account and payment for each and every
sum at any time due from an Obligor hereunder, provided that:
28.1.1 each repayment of an Advance or Unpaid Sum or a part thereof
shall be made in the currency in which such Advance or Unpaid
Sum is denominated at the time of that repayment;
28.1.2 each payment in respect of a Letter of Credit (including any
Cash Collateral in respect of a Letter of Credit) shall be
made in the currency in which such Letter of Credit is
denominated;
28.1.3 each payment of interest shall be made in the currency in
which the sum in respect of which such interest is payable is
denominated;
28.1.4 each payment in respect of costs and expenses shall be made in
the currency in which the same were incurred;
28.1.5 each payment pursuant to Clause 14.1 (Increased Costs) or
Clause 25.1 (Guarantee and Indemnity of the Parent) shall be
made in the currency specified by the Bank; and
<PAGE>
28.1.6 any amount expressed to be payable in a currency other than
dollars shall be paid in that other currency.
28.2 The Bank may (acting reasonably) amend this Agreement to the extent
that it considers to be required in order to reflect the circumstances
set out below if any of the following events occur:
28.2.1 any currency in which any of the obligations under the
Facility and this Agreement are denominated from time to time
is changed or replaced at any time after the date of this
Agreement (whether as a result of the introduction of,
changeover to or operation of a single or unified European
currency or otherwise); and/or
28.2.2 any price source for the euro or the national currency of any
member state is eliminated or replaced; and/or
28.2.3 any market conventions relating to the fixing and/or
calculation of interest are changed or replaced.
28.3 If after the date of this Agreement a member state becomes a Subsequent
Participant, all obligations under this Agreement (including any
obligation in respect of any Bank's Available Facility) to make a
payment in its national currency unit shall be redenominated into the
euro unit on the date on which it becomes a Subsequent Participant (but
otherwise in accordance with EMU Legislation).
29. PAYMENTS
29.1 Payments to the Bank
On each date on which this Agreement requires an amount to be paid by
any Borrower, such Borrower shall make the same available to the Bank
for account of the Facility Office by payment in immediately available,
freely transferable, cleared funds (or if such amount is denominated in
dollars in same day dollar funds, or such other funds as may be
customary in New York City for the settlement in New York City of
international banking transactions in dollars) to such account of the
Bank as the Bank shall from time to time have specified for this
purpose.
29.2 Payments by the Bank
29.2.1 On each date on which this Agreement requires an amount to be
paid by the Bank to any Borrower hereunder, the Bank shall
make the same available to the Borrower by payment in
immediately available, freely transferable, cleared funds (or
if such amount is denominated in dollars in same day dollar
funds, or such other funds as may be customary in New York
City for the settlement in New York City of international
banking transactions in dollars) to such account of such
Borrower as such Borrower shall from time to time have
specified for this purpose.
<PAGE>
29.2.2 A payment will be deemed to have been made by the Bank on the
date on which it is required to be made under this Agreement
if the Bank has, on or before that date, taken steps to make
that payment in accordance with the regulations or operating
procedures of the clearing system used by the Bank in order to
make the payment.
29.3 Alternative Payment Arrangements
If, at any time, it shall become impracticable (by reason of any action
of any governmental authority or any change in law or any similar
event) for the Parent to make any payments in the manner specified in
Clause 29.1 (Payments to the Bank), then the Parent may agree with the
Bank alternative arrangements for such payments to be made, provided
that, in the absence of any such agreement, the Parent shall be obliged
to make all payments due to the Bank in the manner specified herein.
29.4 No Set-off
All payments required to be made by an Obligor hereunder shall be
calculated without reference to any set-off or counterclaim and shall
be made free and clear of and without any deduction for or on account
of any set-off or counterclaim.
30. SET-OFF
30.1 Contractual Set-off
Each Obligor authorises the Bank to apply any credit balance to which
such Obligor is entitled on any account of such Obligor with the Bank
in satisfaction of any sum due and payable from such Obligor to the
Bank hereunder but unpaid. For this purpose, the Bank is authorised to
purchase with the moneys standing to the credit of any such account
such other currencies as may be necessary to effect such application.
30.2 Set-off not Mandatory
The Bank shall not be obliged to exercise any right given to it by
Clause 30.1 (Contractual Set-off).
31. ASSIGNMENTS
31.1 Binding Agreement
This Agreement shall be binding upon and enure to the benefit of each
party hereto and its or any subsequent successors.
31.2 No Assignments and Transfers by the Obligors
Save as otherwise provided herein, no Obligor shall be entitled to
assign or transfer all or any of its rights, benefits and obligations
hereunder.
<PAGE>
31.3 Assignments by the Bank
31.3.1 The Bank may, at any time, assign or grant sub-participations
in respect of all or any of its rights and benefits hereunder.
31.3.2 The consent of the Parent is required for an assignment by the
Bank unless the assignment is to any subsidiary or holding
company (or to any subsidiary of any holding company) of the
Bank.
31.3.3 The Parent's consent must not be (a) unreasonably delayed or
withheld or (b) withheld solely because the assignment or
transfer may result in an increase to the Mandatory Cost Rate.
31.4 Disclosure of Information
31.4.1 The Bank may not disclose to any actual or potential assignee,
sub-participant or to any person who may otherwise enter into
contractual relations with the Bank in relation to this
Agreement any information about the Group which has been
supplied pursuant hereto except with the prior written consent
of the Parent (such approval not to be unreasonably withheld
or delayed), unless such information is in the public domain
(otherwise than as a result of a default by the Bank) or
unless such disclosure is required by law or by any government
or any governmental, quasi-governmental, supra national or
trade agency, statutory or regulatory body or any Court.
31.4.2 The Bank undertakes that it will not disclose information
about the Group to any person except as is expressly permitted
hereunder and that prior to disclosing any information it
will, in any event, obtain from the person to whom the
information is to be disclosed an undertaking not to further
disclose that information except as permitted under this
Clause 31 (Assignments) (including the obtaining of a like
undertaking from any person to whom it might disclose
information).
32. CALCULATIONS AND EVIDENCE OF DEBT
32.1 Basis of Accrual
Any interest, letter of credit commission, commitment commission or fee
accruing hereunder will accrue from day to day and is calculated on the
basis of a year of 360 days (or, in the case of any Advance or Letter
of Credit denominated in sterling, 365 days and the actual number of
days elapsed) or, in any case where market practice differs, in
accordance with market practice.
32.2 Proportionate Reductions
Any repayment of an Advance denominated in an Optional Currency shall
reduce the amount of such Advance by the amount of such Optional
Currency repaid and shall reduce the Dollar Amount of such Advance
proportionately.
<PAGE>
32.3 Evidence of Debt
The Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it
hereunder. In any legal action or proceeding arising out of or in
connection with this Agreement, the entries made in such accounts shall
be prima facie evidence of the existence and amounts of the specified
obligations of the Obligors.
32.4 Rounding and Other Consequential Changes
32.4.1 Without prejudice and in addition to any method of conversion
or rounding prescribed by any EMU Legislation and without
prejudice to (a) the liabilities for indebtedness of the
Parent to the Bank under or pursuant to this Agreement or (b)
the Available Facility, any reference in this Agreement to a
minimum amount (or an integral multiple thereof) in a national
currency of a Subsequent Participant to be paid to or by the
Bank shall, immediately upon it becoming a Subsequent
Participant, be placed by a reference to such reasonably
comparable and convenient amount (or an integral multiple
thereof) in the euro unit as the Bank may specify.
32.4.2 Save as expressly provided in this Clause 32.4 (Rounding and
Other Consequential Changes), this Agreement shall be subject
to such reasonable changes of construction as the Bank may at
the relevant time specify to be appropriate to reflect the
adoption of the euro in any Participating Member State and any
relevant market conventions and practices relating to the
euro.
32.5 Certificates of the Bank
A certificate of the Bank as to (a) the amount by which a sum payable
to it hereunder is to be increased under Clause 12.1 (Tax Gross-up) or
(b) the amount for the time being required to indemnify it against any
such cost, payment or liability as is mentioned in Clause 25.1
(Guarantee and Indemnity) or (c) Clause 14.1 (Increased Costs) or (d)
the amount paid by the Bank in respect of any Letter of Credit, shall,
in the absence of manifest error, be prima facie evidence of the
existence and amounts of the specified obligations of the Obligors.
33. REMEDIES AND WAIVERS, PARTIAL INVALIDITY
33.1 Remedies and Waivers
No failure to exercise, nor any delay in exercising, on the part of the
Bank, any right or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise thereof or the exercise of any other
right or remedy. The rights and remedies herein provided are cumulative
and not exclusive of any rights or remedies provided by law.
<PAGE>
33.2 Partial Invalidity
If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or
impaired thereby.
34. NOTICES
34.1 Communications in Writing
Each communication to be made hereunder shall be made in writing and,
unless otherwise stated, shall be made by fax or letter.
34.2 Delivery
Any communication or document to be made or delivered by one person to
another pursuant to this Agreement shall:
34.2.1 if by way of fax (unless that other person has by five days'
notice specified another number) be made to such other person
to the fax number identified with its signature below and
shall be deemed to have been received when transmission has
been completed; and
34.2.2 if by way of letter (unless that other person has by five
days' notice specified another address) be delivered to that
other person at the address identified with its signature
below and shall be deemed to have been delivered when left at
that address or, as the case may be, two days after being
deposited in the post postage prepaid in an envelope addressed
to it at that address,
provided that any communication or document to be made or delivered to
the Bank shall be effective only when received by its Corporate Banking
division and then only if the same is expressly marked for the
attention of the department or officer identified with the Bank's
signature below (or such other department or officer as the Bank shall
from time to time specify for this purpose).
34.3 Communication by Additional Borrowers
Any communication or document to be made or delivered to or by the
Additional Borrowers or any of them shall be made or delivered to or by
the Parent on behalf of all or any of them and each Additional Borrower
irrevocably and unconditionally appoints the Parent as its agent:
34.3.1 for it and on its behalf to issue and receive communications
or documents to be made or delivered to or by it hereunder
including, without limitation, in respect of any Utilisation
Request, selection of any Interest Period, designation of any
proposed Additional Borrower, designation or release of any
Guarantor or prepayment of any Advance; and
<PAGE>
34.3.2 to agree any amendment to, variation or waiver of this
Agreement including, without limitation, entering into any
Accession Agreement and negotiating and agreeing any
substitute basis for the calculation of interest hereunder,
and each Additional Borrower acknowledges that any action taken or
agreement made by the Parent whatsoever on behalf of such Additional
Borrower in relation to this Agreement shall be binding on that
Additional Borrower.
34.4 English Language
Each communication and document made or delivered by one party to
another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an
officer of the person making or delivering the same) as being a true
and accurate translation thereof.
35. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
English law.
36. JURISDICTION
36.1 English Courts
Each of the parties hereto irrevocably agrees for the benefit of the
Bank that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Agreement
(respectively "Proceedings" and "Disputes") and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
36.2 New York Courts
Each of the Borrowers irrevocably agrees that the courts of the State
of New York and the courts of the United States of America, in each
case sitting in the County of New York, shall have jurisdiction to hear
and determine any Proceedings and to settle any Disputes and, for such
purposes, irrevocably submits to the jurisdiction of such courts.
36.3 Convenient Forum
Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 36.1 (English
Courts) and Clause 36.2 (New York Courts) being nominated as the forum
to hear and determine any Proceedings and to settle any Disputes and
agrees not to claim that any such court is not a convenient or
appropriate forum.
36.4 Service of Process
The Parent and each Additional Borrower agrees that the process by
which any Proceedings are begun may be served on it by being delivered
(i) in connection with
<PAGE>
any Proceedings in England, to Clifford Chance Secretaries Limited at
200 Aldersgate Street, London EC1A 4JJ or its other registered office
for the time being and (ii) in connection with any Proceedings in New
York, to Nazareth Century Corporation at 350 Fifth Avenue, Suite 4210,
New York, NY 10118. If the appointment of either of the persons
mentioned in this Clause 36.4 ceases to be effective in respect of the
Parent or any Additional Borrower, the Parent or such Additional
Borrower shall immediately appoint a further person in England or, as
the case may be, New York to accept service of process on its behalf in
England or, as the case may be, New York and, failing such appointment
within 15 days, the Bank shall be entitled to appoint such a person by
notice to the Parent or such Additional Borrower. Nothing contained
herein shall affect the right to serve process in any other manner
permitted by law.
No Limitation on Proceedings
The submission to the jurisdiction of the courts referred to in Clause
36.1 (English Courts) and Clause 36.2 (New York Courts) shall not (and
shall not be construed so as to) limit the right of the Bank to take
Proceedings against the Parent or any Additional Borrower in any other
court of competent jurisdiction nor shall the taking of Proceedings in
any one or more jurisdictions preclude the taking of Proceedings in any
other jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
SCHEDULE 1
THE GUARANTORS
Name Jurisdiction of Incorporation
---- -----------------------------
London Pacific Group Limited Jersey, Channel Islands
Berkeley International Capital Corporation California, United States of America
Berkeley International Capital Limited Guernsey, Channel Islands
North American Fiduciary Dervices, Inc. California, United States of America
Berkeley (USA) Holdings Limited California, United States of America
<PAGE>
SCHEDULE 2
CONDITIONS PRECEDENT
1. In relation to the Parent and each Guarantor listed in Schedule 1:
(a) a copy, certified a true copy by a duly Authorised Signatory
of such person of the Memorandum and Articles of Association
(or equivalent) of such person ;
(b) a copy, certified as a true copy on behalf of such person, of
a Board Resolution of such person approving the execution,
delivery and performance of (in the case of the Parent and
each Additional Borrower) this Agreement and the terms and
conditions hereof (and, in the case of each Guarantor) its
guarantee of the obligations of the Parent and each Additional
Borrower under this Agreement and the terms and conditions
thereof and authorising a named person or persons to sign the
same and any documents to be delivered by such person pursuant
hereto or thereto; and
(c) a certificate of a duly Authorised Signatory of such person
setting out the names and signatures of the persons authorised
on behalf of such person by its Board Resolution referred to
in (b) above.
2. In relation to each Guarantor a guarantee in the form as set out in the
Schedule 8 (Form of Guarantee) .
3. An opinion relating to the due execution by a non-UK Guarantor of any
guarantee referred to in paragraph 2 above addressed to the Bank in a
form acceptable to the Bank (whose acceptance will not be unreasonably
withheld or delayed) by external legal counsel appointed by the
relevant Guarantor.
4. An opinion from Clifford Chance addressed to the Bank concerning the
validity of the Facility Agreement and the guarantees.
5. A schedule of current borrowings and Encumbrances of the Group as at
the end of the month in which this Agreement is signed (which schedule
shall be used to identify current borrowings and Encumbrances for the
purposes of Clauses 20.2.1 and 20.2.2)).
6. A copy, certified a true copy by a duly authorised officer of the
Parent of:
(a) the audited consolidated financial statements of the Group for
its financial year ended 31 December 1999; and
(b) the audited financial statements of each Additional Borrower
and Guarantor for its financial year ended 31 December 1999.
7. Evidence that Clifford Chance Secretaries Limited has agreed to act as
agent of the Parent and each Additional Borrower for the service of
process in England and that Nazareth Century Corporation has agreed to
act as agent of the Parent and each Additional Borrower for the service
of process in New York.
<PAGE>
SCHEDULE 3
UTILISATION REQUEST
From: London Pacific Group Limited
To: The Governor and Company of the Bank of Scotland
Dated:
Dear Sirs,
1. We refer to the agreement (the "Facility Agreement") dated 2 May 2000
and made between ourselves as and yourselves as lender. Terms defined
in the Facility Agreement shall have the same meaning in this notice.
2. This notice is irrevocable.
3. We hereby give you notice that, pursuant to the Facility Agreement and
on [date of proposed Advance], [we/or [Name of Additional Borrower]
wish[es] the Bank to make an Advance/issue a Letter of Credit having an
Original Dollar Amount of $][ ] upon the terms and subject to the
conditions contained therein.
4. We confirm that following utilisation of the Advance we will remain in
compliance with the covenant contained in Clause 20.2.5.
5. We would like this Advance to be denominated in [currency] and to have
a first Interest Period of [ ] months' duration*./[We would like this
Advance to be divided upon the making thereof into [ ] Advances as
follows:
[Duration of First
Original Dollar Amount Currency Interest Period]*
6. We confirm that, at the date hereof, no Event of Default or Potential
Event of Default has occurred which is continuing and has not been
waived nor would result from the making of this Advance/issue of this
Letter of Credit and the Repeated Representations are true in all
material respects.
7. The proceeds of the utilisation should be credited to [insert account
details].
Yours faithfully
.............................
Authorised Signatory
for and on behalf of
LONDON PACIFIC GROUP LIMITED
-----------------------------------------------------------------------------
* Insert only if there are no outstanding Advances denominated
in the currency of the utilisation
<PAGE>
SCHEDULE 4
EXISTING ENCUMBRANCES
Guarantees and Letters of Credit Related to U.S.$50,000,000 Facility
(Facility Agreement dated 26 October 1996)
<TABLE>
<CAPTION>
------------------------------------------- --------------------- -------------------- ---------------------
Group Company Instrument Issued in Favour Amount ($)
<S> <C> <C> <C>
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit Selle Italia 150,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Bank Guarantee Credito Italiano 64,438.64
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Bank Guarantee Credito Italiano 30,710.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit Acumin 103,479.50
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit Acumin 179,655.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit Acumin 125,099.75
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit Acumin 262,162.20
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Letter of Credit GE Capital Bank 1,900,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Limited Bank Guarantee Furniture Builders 9,612,666.02
Ltd
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Total 12,428,211.11
------
------------------------------------------- --------------------- -------------------- ---------------------
</TABLE>
Third Party Encumbered Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
------------------------------------------- --------------------- -------------------- ---------------------
Group Company Instrument Details of Amount
Equipment ($)
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Berkeley International Capital Corporation Lease Purchase Two Photocopiers 31,000.00
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc Lease Purchase Computer Equipment 80,750.27
------------------------------------------- --------------------- -------------------- ---------------------
<PAGE>
------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc Lease Purchase Computer Software 124,937.04
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
SAI Capital Holdings, Inc Lease Purchase Advent Software 408,979.29
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- -------------------- ---------------------
Select Advisors Lease Purchase Computer Equipment 18,870.28
------------------------------------------- --------------------- -------------------- ---------------------
------------------------------------------- --------------------- ------------------------------------------
Total 664,536.88
------
------------------------------------------- --------------------- -------------------- ---------------------
</TABLE>
<PAGE>
SCHEDULE 5
FORM OF COMPLIANCE CERTIFICATE
To: Governor and Company of the Bank of Scotland
Corporate Banking
P.O. Box 30
Broad Street House
55 Old Broad Street
London EC2P 2HL
Attention: Evelyn Clark
Dated [ ]
Dear Sirs,
$50,000,000 Facility Agreement dated 2 May 2000
We refer to Clause 20.2.3 of the above Facility Agreement and report on
compliance with the provisions of Clause 21 of the Facility Agreement with
reference to the consolidated financial statements of the Group for the
financial [half] year ending on [ ].
(A) Compliance with the following covenants contained in Clause 21.1 of the
above Facility Agreement:
<TABLE>
<CAPTION>
Year Year
$000 $000
<C> <S> <C>
1) Liabilities not to exceed equity
Liabilities
Creditors [ ] [ ]
Creditors - non current [ ] [ ]
Less: Long-term insurance reserves [( )] [( )]
----------- -----------
=========== ===========
-------------------------------------------------------------------------------
Equity [ ] [ ]
-------------------------------------------------------------------------------
Called up share capital [ ] [ ]
-------------------------------------------------------------------------------
Share premium [ ] [ ]
-------------------------------------------------------------------------------
Capital redemption reserve [ ] [ ]
-------------------------------------------------------------------------------
Profit and loss account
-------------------------------------------------------------------------------
Less: goodwill
-------------------------------------------------------------------------------
Profit and loss account excluding goodwill [ ] [ ]
-------------------------------------------------------------------------------
Other reserves as at [ ] [ ] [ ]
-------------------------------------------------------------------------------
----------- -----------
[( )] [( )]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
Ratio [ ]% [ ]%
------------------------------------------------------------------------------- =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Year
$000 $000
<C> <S> <C>
2) Net Worth not to be less than $325 million
-------------------------------------------------------------------------------
Equity (as above) [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3) Operating Profit to be a minimum of 300% of
Interest Charge
-------------------------------------------------------------------------------
Operating Profit
-------------------------------------------------------------------------------
Profit before taxation [ ] [ ]
-------------------------------------------------------------------------------
Interest expense [ ] [ ]
------------------------------------------------------------------------------- ----------- -----------
[ ] [ ]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Less: Exceptional and extraordinary items [( )] [( )]
------------------------------------------------------------------------------- ----------- -----------
-------------------------------------------------------------------------------
Interest Cover [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
Interest Charge [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
Ratio [ ]% [ ]%
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
4) Operating cash flow to be no less than 25% of Net Debt
-------------------------------------------------------------------------------
Operating cash flow [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
Net Debt
-------------------------------------------------------------------------------
Borrowings [ ] [ ]
-------------------------------------------------------------------------------
Cash held in escrow [ ] [ ]
-------------------------------------------------------------------------------
Liquid resources
-------------------------------------------------------------------------------
Less: securities below BBB rating
-------------------------------------------------------------------------------
[( )] [( )]
-------------------------------------------------------------------------------
Cash [( )] [( )]
------------------------------------------------------------------------------- ----------- -----------
Net Debt/(Cash) [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
(N.B. Covenant may only be breached if net debt is positive)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
5) Ratio of Current Assets to Current Liabilitis to be at least 2.1
-------------------------------------------------------------------------------
Current Assets [ ] [ ]
------------------------------------------------------------------------------- =========== ===========
-------------------------------------------------------------------------------
Current liabilities (Creditors) [ ] [ ]
-------------------------------------------------------------------------------
Less: amounts due to Bank [( )] [( )]
-------------------------------------------------------------------------------
----------- -----------
[( )] [( )]
-------------------------------------------------------------------------------
------------------------------------------------------------------------------- =========== ===========
Ratio [ ]% [ ]%
=========== ===========
-------------------------------------------------------------------------------
6) Aggregate intangible assets not to exceed 40% of Group
Gross Assets
-------------------------------------------------------------------------------
Intangible assets:
-------------------------------------------------------------------------------
Goodwill [ ] [ ]
-------------------------------------------------------------------------------
Deferred Policy Acquisition Costs [ ] [ ]
-------------------------------------------------------------------------------
Intangible Assets [ ] [ ]
-------------------------------------------------------------------------------
----------- -----------
[ ] [ ]
------------------------------------------------------------------------------- =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Year
$000 $000
<C> <S> <C>
Aggregate gross assets:
-------------------------------------------------------------------------------
Fixed assets [ ] [ ]
-------------------------------------------------------------------------------
Current assets [ ] [ ]
-------------------------------------------------------------------------------
Goodwill [ ] [ ]
-------------------------------------------------------------------------------
----------- -----------
[ ] [ ]
-------------------------------------------------------------------------------
------------------------------------------------------------------------------- =========== ===========
Ratio [ ]% [ ]%
=========== ===========
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
7) Guaranteeing Group net assets to be no less than 90% of
Available Net Assets
-------------------------------------------------------------------------------
Guaranteeing Group net assets [ ] [ ]
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Available Group net assets [ ] [ ]
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</TABLE>
(B) The Repeated Representations remain true in all material respects as at
the date hereof by reference to the facts and circumstances on the date
hereof.
(C) No Potential Event of Default or Event of Default has occurred which is
continuing and has not been waived.
Expressions defined in the Facility Agreement shall have the same meanings
herein.
For and on behalf of
LONDON PACIFIC GROUP LIMITED
<PAGE>
SCHEDULE 6
ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT is made on the [ ] day of [ ],
BETWEEN
(1) London Pacific Group Limited [on behalf of itself and as agent for and
on behalf of [list any other parties who have hitherto become
Additional Borrowers pursuant to the Agreement]] (the "Parent");
(2) [Additional borrower] (the "Additional Borrower");
(3) The Governor and Company of the Bank of Scotland (the "Bank").
WHEREAS
(1) By a facility agreement dated 2 May 2000 made between the Parent, The
Governor and Company of the Bank of Scotland (the "Agreement"), the
Bank has granted a loan facility of up to $50,000,000 or its equivalent
to the Parent and any other person which has become an additional
borrower pursuant thereto;
(2) [The Agreement has hitherto been further amended by the addition of
other additional borrowers pursuant to the following accession
agreements:-
[list accession agreements dates of accession agreements]]
(3) Pursuant to Clause 24.1 of the Agreement, the Parent wishes to
designate the Additional Borrower as a Borrower under the Facility and
the Bank, has consented to such designation.
NOW IT IS HEREBY AGREED as follows:-
1. Interpretation
Save as otherwise defined herein, terms defined in the Agreement shall
bear the same meaning herein.
<PAGE>
2. Additional Borrower
With effect from the date on which the Parent delivers to the Bank each
of the conditions precedent specified in Clause 3 of this Accession
Agreement, the Agreement shall henceforth be read and construed as if
the Additional Borrower were party to the Agreement having all the
rights and obligations of an Additional Borrower and a Borrower under
the Facility. Accordingly, all references in the Agreement to (a) any
"Additional Borrower" or "Borrower" shall be treated as including a
reference to such Additional Borrower and (b) any references to the
Agreement shall be treated as a reference to the Agreement as
supplemented by this Accession Agreement to the intent that this
Accession Agreement and the Agreement shall be read and construed
together as one single agreement.
3. Conditions Precedent
The following are the Additional Borrower Conditions Precedent referred
to in Clause 2 of this Accession Agreement which are required to be
delivered to the Bank in relation to the Additional Borrower:-
3.1 a copy, certified as a true copy by an Authorised Signatory on behalf
of such person, of the Memorandum and Articles of Association (or
equivalent) of such person;
3.2 a copy, certified as a true copy by an Authorised Signatory on behalf
of such person, of a Board Resolution of such person approving the
execution, delivery and performance of this Accession Agreement, the
Agreement, any guarantee referred to in Clause 3.4 below and the terms
and conditions hereof and thereof and authorising a named person or
persons to sign the same and any documents to be delivered by such
person pursuant hereto or thereto;
3.3 a certificate of a duly authorised officer of such person setting out
the names and signatures of the persons authorised on behalf of such
person by its Board Resolution referred to in 3.2 above;
3.4 if the Additional Borrower is not an existing Guarantor, a guarantee in
substantially the form provided by the existing Guarantors (with such
changes, if any, as the Bank may reasonably require in the light of
legal advice received by it) guaranteeing amounts owing by the Parent
and the Additional Borrowers under the Agreement; and
3.5 an opinion in such form as the Bank may reasonably require relating to
the due execution of this Accession Agreement and any guarantee
referred to in Clause 3.4 above addressed to the Bank by in-house
counsel to the Parent.
4. Representations
The Additional Borrower hereby represents in respect of itself as if
the representations set out in Clause 17 of the Agreement were set out
in full in this Accession Agreement.
<PAGE>
5. Counterparts
This Accession Agreement may be signed in counterparts, all of which
taken together shall constitute a single agreement.
6. Law
This Accession Agreement shall be governed by, and construed in
accordance with, English law.
7. Jurisdiction
7.1 Each of the parties hereto irrevocably agrees for the benefit of the
Bank that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Accession Agreement
(respectively "Proceedings" and "Disputes") and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
7.2 Each of the Borrowers irrevocably agrees that the courts of the State
of New York and the courts of the United States of America, in each
case sitting in the County of New York, shall have jurisdiction to hear
and determine any Proceedings and to settle any Disputes and, for such
purposes, irrevocably submits to the jurisdiction of such courts.
7.3 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 7.1 and
Clause 7.2 being nominated as the forum to hear and determine any
Proceedings and to settle any Disputes and agrees not to claim that any
such court is not a convenient or appropriate forum.
7.4 The Parent and each Additional Borrower agrees that the process by
which any Proceedings are begun may be served on it by being delivered
(i) in connection with any Proceedings in England, to Clifford Chance
Secretaries Limited at 200 Aldersgate Street, London EC1A 4JJ or other
its registered office for the time being and (ii) in connection with
any Proceedings in New York, to Nazareth Century Corporation at 350
Fifth Avenue, Suite 4210, New York, NY 10118 or other its principal
place of business in New York for the time being. If the appointment of
either of the persons mentioned in this Clause 7.4 ceases to be
effective in respect of the Parent or any Additional Borrower, the
Parent or such Additional Borrower shall immediately appoint a further
person in England or, as the case may be, New York to accept service of
process on its behalf in England or, as the case may be, New York and,
failing such appointment within 15 days, the Bank shall be entitled to
appoint such a person by notice to the Parent or such Additional
Borrower. Nothing contained herein shall affect the right to serve
process in any other manner permitted by law.
7.5 The submission to the jurisdiction of the courts referred to in Clause
7.1 and Clause 7.2 shall not (and shall not be construed so as to)
limit the right of the Bank to take Proceedings against the Parent or
any Additional Borrower in any other court of competent jurisdiction
nor shall the taking of Proceedings in any one or more
<PAGE>
jurisdictions preclude the taking of Proceedings in any other
jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
7.6 The Parent and each Additional Borrower hereby consents generally in
respect if any Proceedings to the giving of any relief or the issue of
any process in connection with such Proceedings including the making,
enforcement or execution against any property whatsoever (irrespective
of its use or intended use) of any order or judgment which may be made
or given in such Proceedings.
7.7 To the extent that the Parent or any Additional Borrower may in any
jurisdiction claim for itself or its assets immunity from suit,
execution, attachment (whether in aid of execution, before judgment or
otherwise) or other legal process and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such
immunity (whether or not claimed), the Parent or such Additional
Borrower hereby irrevocably agrees not to claim and hereby irrevocably
waives such immunity to the full extent permitted by the laws of such
jurisdiction and, in particular, to the intent that in any proceedings
taken in New York the foregoing waiver of immunity shall have effect
under and be construed in accordance with the United States Foreign
Sovereign Immunities Act of 1976.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
The Parent
LONDON PACIFIC GROUP LIMITED
By:
Address:
Attention:
Telex:
The Additional Borrower
By:
Address:
Attention:
Telex:
The Bank
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By:
Address:
Attention:
Telex:
<PAGE>
SCHEDULE 7
MANDATORY COSTS
1. The Mandatory Cost Rate is an addition to the interest rate to
compensate the Bank for the cost of compliance with the requirements of
the Bank of England and/or the Financial Services Authority (or, in
either case, any other authority which replaces all or any of its
functions).
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Bank shall calculate, as a percentage rate per annum its
Mandatory Cost Rate, in accordance with the formulae set out below.
3. The Mandatory Cost Rate will be calculated by the Bank as follows:
(a) in relation to sterling Advances:
[OBJECT OMITTED]per cent. per annum
(b) in relation to Advances in any currency other than sterling:
[OBJECT OMITTED]per cent. per annum.
Where:
A is the percentage of eligible liabilities (assuming these to
be in excess of any stated minimum) which the Bank is from
time to time required to maintain as an interest free cash
ratio deposit with the Bank of England to comply with cash
ratio requirements.
B is the percentage rate of interest (excluding the Margin and
the Mandatory Cost Rate) payable for the relevant Interest
Period on the Advance.
C is the percentage (if any) of eligible liabilities which the
Bank is required from time to time to maintain as interest
bearing special deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of
England to the Bank on interest bearing special deposits.
E is the rate of charge payable by the Bank to the Financial
Services Authority pursuant to the Fees Regulations (but, for
this purpose, ignoring any minimum fee required pursuant to
the Fees Regulations) and expressed in pounds per
(pound)1,000,000 of the Fee Base of the Bank.
4. For the purposes of this Schedule:
<PAGE>
(a) "eligible liabilities" and "special deposits" have the
meanings given to them from time to time under or pursuant to
the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England;
(b) "Fee Regulations" means the Banking Supervision (Fees)
Regulations 1999 or such other law as may be in force from
time to time in respect of the payment of fees for banking
supervision; and
(c) "Fee Base" has the meaning given to it, and will be calculated
in accordance with, the Fees Regulations.
5. In application of the above formulae, A, B, C and D will be included in
the formulae as percentages (i.e. 5 per cent. will be included in the
formula as 5 and not as 0.05). A negative result obtained by
subtracting D from B shall be taken as zero. The resulting figures
shall be rounded to four decimal places.
6. The Bank may from time to time, after consultation with the Parent,
determine and notify to the Parent any amendments or variations which
are required to be made to any of the formulae set out above in order
to comply with any change in law or any requirements from time to time
imposed by the Bank of England or the Financial Services Authority (or,
in either case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all the parties hereto.
<PAGE>
SCHEDULE 8
FORM OF GUARANTEE
To: The Governor and Company of the Bank of Scotland
Corporate Banking
Old Broad Street
55 Old Broad Street
London EC2P 2HL
We refer to the facility agreement dated 2 May 2000 (the "Facility Agreement")
between London Pacific Group Limited (a company incorporated with limited
liability under the laws of Jersey, whose registered office is situate at
[address]) as borrower and as a guarantor of the obligations of any Additional
Borrower (the "Parent"), and The Governor and Company of the Bank of Scotland as
lender (the "Bank") whereby the Bank has agreed to make available a loan
facility of $50,000,000 (or its equivalent).
This guarantee is made by way of Deed:
1. We irrevocably and unconditionally guarantee to the Bank the proper and
punctual performance by the Parent and each Additional Borrower,
including any person who becomes an Additional Borrower after the date
hereof (together the "Principals" and each a "Principal") of their
obligations under the Facility Agreement and undertake to pay to the
Bank on demand all sums from time to time due and payable (but unpaid)
by the Principals or any of them to the Bank or any of them under or
pursuant to the Facility Agreement.
2. We irrevocably and unconditionally agree as a separate, continuing and
primary obligation to indemnify the Bank on demand by the Bank from and
against all losses, claims or costs incurred or suffered by the Bank or
any of them as a result of the Facility Agreement or any of the
obligations of any Additional Borrower thereunder being or becoming
void, voidable or unenforceable for any reason whatsoever, whether or
not known to the Bank.
3. Our liability hereunder shall not be discharged, impaired or otherwise
affected by (i) the winding-up, dissolution, administration or
re-organisation of any Additional Borrower or any other person or any
change in its status, function, control or ownership, (ii) any of the
obligations of any Additional Borrower or any other person thereunder
or under any security taken in respect of any of its obligations
thereunder being or becoming illegal, invalid, unenforceable or
ineffective in any respect, (iii) any failure on the part of the Bank
(whether intentional or not) to take, perfect or realise any guarantee
or security agreed to be taken in relation to the Facility Agreement,
(iv) any time or other indulgence given or agreed to be given to, or
any composition or other arrangement made with or accepted from (a) the
Principals or any of them in respect of their obligations under the
Facility Agreement or (b) any person in respect of obligations under
any guarantee or security relating to the Facility Agreement, (v) any
amendment to the Facility Agreement or any such guarantee or security,
(vi) any
<PAGE>
release, discharge or exchange of any such guarantee or security, or
(vii) any other act, event or omission which but for this provision
would or might operate to impair or discharge our liability hereunder.
4. Our obligations hereunder are in addition to and not in substitution
for any other guarantee or security which the Bank may now or hereafter
hold for the obligations of the Principals or any of them under the
Facility Agreement and may be enforced without the Bank first having
recourse to any such guarantee or security and without the Bank first
taking any steps or proceedings against the Principals or any of them.
5. So long as we are under any actual or contingent liability hereunder we
will not exercise any rights we might have by reason of performance by
us of our obligations hereunder:
(a) to be indemnified by the Principals or any of them; and/or
(b) to claim contribution from any other guarantor of any
Principal's obligations under the Facility Agreement; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank under the
Facility Agreement or of any other guarantee or security taken
pursuant to, or in connection with the Facility Agreement;
and/or
(d) to prove in a liquidation or winding-up of the Principals or
any of them in competition with the Bank for any amount
whatsoever owing to the Bank under the Facility Agreement.
6. Any discharge given by the Bank or any of them to us in respect of our
obligations hereunder or any other agreement reached in relation
thereto shall be, and be deemed always to have been, void if any act on
the faith of which that discharge was given or that agreement was
entered into is subsequently avoided by or in pursuance of any
provision of law.
7. All amounts payable under this Guarantee by us shall be made in full
without any deduction or withholding whatsoever by us (whether in
respect of set-off, counterclaim, duties, taxes, charges or otherwise)
unless such deduction or withholding is required by law, in which event
we shall ensure that the deduction or withholding does not exceed the
minimum amount legally required and forthwith pay to the Bank such
additional amounts so that the net amount received by the Bank will
equal the full amount which would have been received by the Bank had no
such deduction or withholding been made.
8. We acknowledge that we have represented to the Bank, and hereby
warrant, that we have full power and authority to enter into this
Guarantee, that we have taken all necessary corporate or other actions
to authorise the same, and that, as executed, this guarantee (and the
performance of all obligations herein contained) does not and will not
constitute a breach of any law, regulation or official directive to
which we are
<PAGE>
subject, or any agreement by which we are bound, and is and will be
valid, binding and enforceable in accordance with its terms (subject to
any limitations arising from administration, bankruptcy, insolvency,
liquidation, reorganisation and similar laws generally affecting the
rights of creditors).
9. A certificate signed by an official of the Bank as to any amount due to
the Bank pursuant to this Guarantee shall be conclusive evidence save
in the case of manifest error or on any question of law.
10. The Bank's rights under this Guarantee are cumulative, may be exercised
as often as considered appropriate and are in addition to rights under
the general law. Such rights (whether arising hereunder or under the
general law) shall not be capable of being waived or varied otherwise
than by an express waiver or variation in writing and in particular any
failure to exercise or any delay in exercising any of such rights shall
not operate as a waiver or variation of that or any other such right;
any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such right
and no act or course of conduct or negotiation on the part of the Bank
shall preclude them from exercising any such right or constitute a
suspension or variation of any such right.
11. All moneys received, recovered or realised by the Bank by virtue of
Clause 1 or Clause 2 may, in the Bank's discretion, be credited to a
suspense or impersonal account and may be held in such account for so
long as the Bank thinks fit pending the application from time to time
(as the Bank may think fit) of such moneys in or towards the payment
and discharge of any amounts owing (the "Outstanding Amounts") by the
Parent or any of the Additional Borrowers to the Bank under the
Facility Agreement. The rate of interest applicable to any amount
standing to the credit of such suspense or impersonal account shall be
the rate per annum which is equal to the rate per annum for the time
being in respect of the Outstanding Amounts. The Bank shall on the last
day of each Interest Period in respect of the Outstanding Amounts apply
the amount of interest for the time being accrued on such suspense or
impersonal account in or towards payment of interest due to the Bank on
each such day under the Facility Agreement.
12. Each of the provisions of this Guarantee shall be severable and
distinct from one another and if one or more such provisions is invalid
or unenforceable the remaining provisions shall not in any way be
affected or impaired.
13. We agree that our rights and obligations under this Guarantee or any
part thereof are not assignable to any other party without the consent
in writing of the Bank.
14. Any demand to be made hereunder may be made of us at our registered
office or our principal place of business for the time being.
15. This Guarantee shall be governed by and construed in accordance with
English law.
16. We hereby irrevocably agree that the courts of England shall have
jurisdiction to hear and determine any suit, action or proceeding, and
to settle any disputes, which may
<PAGE>
arise out of or in connection with this Guarantee and, for such
purposes, we hereby irrevocably submit to the jurisdiction of such
courts.
17. We hereby agree that the process by which any suit, action or
proceeding is begun may be served on us by being delivered to Nazareth
Century Corporation at 350 Fifth Avenue, Suite 4210, New York, NY 10118
or its registered office for the time being. [Non-UK Guarantors only]
<PAGE>
IN WITNESS WHEREOF this Deed has been executed hereto and is intended to be and
is hereby delivered on the date first above written
SIGNED as a Deed by [ ]
Limited
Director
Director/Secretary
[OR appropriate alternative attestation for non-UK Guarantors]
EXECUTED as a Deed under Seal by
[Name of Company]
acting by [Name(s) of authorised signatory(ies)]
in the presence of:
Signature of Witness .................................................
Name of Witness .................................................
Address .................................................
.................................................
.................................................
Occupation .................................................
Accepted and agreed by
The Governor and Company of the Bank of Scotland
<PAGE>
SCHEDULE 9
FORM OF LETTER OF CREDIT
To: [Beneficiary]
Date:
Dear Sirs
Irrevocable Standby Letter of Credit No. [ ]
This Letter of Credit is issued by The Governor and Company of the Bank of
Scotland, (the "Issuer") at the request of London Pacific Group Limited in your
favour on the following terms:
1. The Issuer shall not be obliged to make payments hereunder exceeding in
aggregate the maximum amount of $10,000,000. Any payment hereunder
shall be made in [currency] and shall reduce the Issuer's liability to
make payment hereunder accordingly.
2. This Letter of Credit shall expire at [ ] a.m./p.m., London time on [ ]
(the "Expiry Date"). The Issuer will have no liability in respect of
any demand delivered after such time and a demand not accompanied by
the information mentioned in paragraph 3(b) below shall not be validly
delivered.
3. Subject to paragraph 2 above, within three (3) business days of
receiving (a) your demand on the Issuer specifying the amount claimed
under this Letter of Credit and bearing an endorsement of the above
Letter of Credit number and (b) [details of any other documents
required from the Beneficiary to be inserted (including a certificate
verified as having been signed by two authorised officers of the
Beneficiary authorising delivery of the demand)], at [details of Bank's
office to be inserted] the Issuer hereby agrees to pay to you in the
currency specified in paragraph 1 above, subject to the maximum amount
referred to in paragraph 1 above.
4. Your rights and the rights of the Issuer under this Letter of Credit
may not be assigned or transferred.
5. This Letter of Credit is subject to Uniform Customs and Practice for
Documentary Credits (International Chamber of Commerce, Publication No.
500 - 1993).
6. This Letter of Credit is governed by English law and, for the benefit
of the Issuer only, the courts of England shall have exclusive
jurisdiction.
Yours faithfully
........................................
for and on behalf of
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
<PAGE>
SIGNATURES
The Parent
LONDON PACIFIC GROUP LIMITED
By: R.W. Green (Company Secretary)
Address:
Attention:
Telex:
Fax:
The Bank
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
By: Evelyn Clark
Address:
Attention:
Telex:
Fax:
<PAGE>
