<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
------------------------
EASCO, INC.
(Name of Subject Company)
CARADON PLC
CARADON INC.
E ACQCO INC.
(Bidders)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
27033E103
(CUSIP Number of Class of Securities)
MR. ROBERT B. LECKIE
CARADON INC.
2 CORPORATE DRIVE, OFFICE 210
TRUMBULL, CONNECTICUT 06611
(203) 445-9135
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
TRACY T. LARSEN, ESQ.
WARNER NORCROSS & JUDD LLP
111 LYON STREET, N.W., STE. 900
GRAND RAPIDS, MICHIGAN 49503
(616) 752-2000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------------------
<S> <C>
$159,747,424.80 $31,949.48
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
* For the purpose of calculating the fee only, this amount assumes the purchase
of 10,509,699 shares of Common Stock, $.01 par value, of the Subject Company
at a per share price of $15.20. Such number of shares includes all
outstanding shares of Common Stock as of August 3, 1999 (9,673,224 shares,
excluding shares held by the Subject Company or any direct or indirect wholly
owned subsidiary), plus the number of shares of Common Stock that would be
issued assuming the exercise of all outstanding options to purchase shares of
Common Stock (836,475 shares). The amount of the filing fee calculated in
accordance with Regulation 240.0-11 of the Securities Exchange Act of 1934,
as amended, equals 1/50 of one percentum of the value of the shares to be
purchased.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
This Schedule 14D-1 relates to a tender offer by E Acqco Inc. (the
"Purchaser"), an indirect wholly owned subsidiary of Caradon Inc. ("Parent") and
an indirect wholly owned subsidiary of Caradon plc, to purchase all outstanding
shares of common stock, $0.01 par value (the "Shares"), of Easco, Inc. (the
"Company"), at a purchase price of $15.20 per share, net to the seller in cash,
without interest, all upon the terms and subject to the conditions set forth in
the offer to purchase dated August 3, 1999 (the "Offer to Purchase") and in the
related letter of transmittal (the "Letter of Transmittal"), which, together
with any amendments or supplements thereto, constitute the "Offer." Copies of
the Offer to Purchase and the Letter of Transmittal are filed as Exhibit (a)(1)
and (a)(2) hereto, respectively, and are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Easco, Inc. The address of the
principal executive offices of the Company is set forth in Section 8 ("Certain
Information Concerning the Company") of the Offer to Purchase and is
incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, $.01 par value, of the Company. The information set
forth in the "Introduction" to the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d), and (g): The information set forth in the "Introduction"
and Section 9 ("Certain Information Concerning the Purchaser, Parent and Caradon
plc") of the Offer to Purchase, and in Annex I thereto, is incorporated herein
by reference.
(e) and (f): Neither Caradon plc, the Purchaser nor Parent nor, to the best
of their knowledge, any of the persons listed in Annex I of the Offer to
Purchase, has, during the last five years, (i) been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or (ii) been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) None.
(b) The information set forth in the "Introduction" and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b): The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) through (e): The information set forth in the "Introduction," Section
11 ("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") and Section 13 ("The Merger Agreement and the Stockholder Agreements")
of the Offer to Purchase is incorporated herein by reference.
2
<PAGE> 3
(f) and (g): The information set forth in Section 7 ("Certain Effects of
the Transaction") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b): The information set forth in the "Introduction" and in Section
9 ("Certain Information Concerning the Purchaser, Parent and Caradon plc") and
Section 13 ("The Merger Agreement and the Stockholder Agreements") of the Offer
to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction," Section 11 ("Background of
the Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 13 ("The Merger Agreement and the Stockholder Agreements") of the Offer
to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" and in Section 17 ("Fees
and Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Parent, the Purchaser and Caradon plc do not consider financial condition
to be material to a decision of stockholders to sell, tender or hold securities
being sought in the Offer because Caradon plc, who will provide the Purchaser
with the financing necessary to consummate the Offer, has cash on hand and
committed funds available to it that, when combined, substantially exceed the
aggregate funds required by the Purchaser to consummate the Offer. Summary
consolidated financial information concerning Caradon plc is provided in the
information set forth in Section 9 ("Certain Information Concerning the
Purchaser, Parent and Caradon plc") of the Offer to Purchase, which is
incorporated herein by reference. The incorporation by reference herein of such
financial information does not constitute an admission that such information is
material to a decision by a security holder of the Company whether to sell,
tender or hold securities being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 13 ("The Merger Agreement and the
Stockholder Agreements") is incorporated herein by reference.
(b) and (c): The information set forth in Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the
Transaction") ("The Merger Agreement and the Stockholder Agreements") of the
Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Merger Agreement and the Stockholder Agreements, copies of
which are attached hereto as Exhibits (a)(1), (a)(2), (c)(1), (c)(2) and (c)(3),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated August 3, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
3
<PAGE> 4
(a)(7) Text of Joint Press Release dated July 28, 1999 issued by Caradon
plc and the Company.
(a)(8) Text of Press Release dated July 28, 1999 issued by Caradon plc.
(a)(9) Form of Summary Advertisement, as published in The New York Times
on August 3, 1999.
(a)(10) Text of Press Release dated August 3, 1999 issued by Parent.
(b)(1) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and Bank of America National Trust & Savings Association.
(b)(2) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and Barclays Bank plc.
(b)(3) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and Midland Bank plc.
(b)(4) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and National Westminster Bank plc.
(b)(5) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and Royal Bank of Canada Europe Limited.
(b)(6) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and UBS AG London Branch.
(b)(7) Loan Agreement (long term) dated March 23, 1999 among Caradon plc
and Westdeutsche Landesbank Girozentrale.
(b)(8) Loan Agreement (long term) dated December 22, 1998 among Caradon
plc and Den Danske Bank London Branch.
(b)(9) Loan Agreement (short term) dated December 22, 1998 among Caradon
plc and Barclays Bank plc.
(b)(10) Loan Agreement (short term) dated December 22, 1998 among Caradon
plc and Midland Bank plc.
(b)(11) Loan Agreement (short term) dated December 22, 1998 among Caradon
plc and National Westminster Bank plc.
(b)(12) Loan Agreement (short term) dated December 22, 1998 among Caradon
plc and Royal Bank of Canada Europe Limited.
(b)(13) Loan Agreement (short term) dated March 23, 1999 among Caradon plc
and Westdeutsche Landesbank Girozentrale.
(b)(14) Loan Agreement (short term) dated December 22, 1998 among Caradon
plc and Den Danske Bank London Branch.
(c)(1) Agreement and Plan of Merger dated as of July 28, 1999 among
Parent, the Purchaser and the Company.
(c)(2) Stockholder Agreement dated July 28, 1999 among Parent, the
Purchaser and American Industrial Partners Capital Fund, L.P.
(c)(3) Form of Stockholder Agreement dated July 28, 1999 among Parent, the
Purchaser and certain directors and executive officers of the Company.
(c)(4) Confidentiality Agreement dated June 10, 1999 between Parent and
the Company.
(c)(5) Assurance Letter dated July 28, 1999 from Caradon plc to the
Company.
(d) None.
(e) Not applicable.
(f) None.
4
<PAGE> 5
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: August 3, 1999 CARADON PLC
By: /s/ MARTIN CLARK
------------------------------------
Name: Martin Clark
Title: Group Finance Director
Dated: August 3, 1999 CARADON INC
By: /s/ ROBERT B. LECKIE
------------------------------------
Name: Robert B. Leckie
Title: Vice President
Dated: August 3, 1999 E ACQCO INC
By: /s/ ROBERT B. LECKIE
------------------------------------
Name: Robert B. Leckie
Title: President
5
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
(a)(1) Offer to Purchase dated August 3, 1999
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Text of Joint Press Release dated July 28, 1999 issued by
Caradon plc and the Company
(a)(8) Text of Press Release dated July 28, 1999 issued by Caradon
plc
(a)(9) Form of Summary Advertisement, as published in The New York
Times on August 3, 1999
(a)(10) Text of Press Release dated August 3, 1999 issued by Parent
(b)(1) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and Bank of America National Trust & Savings
Association
(b)(2) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and Barclays Bank plc
(b)(3) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and Midland Bank plc
(b)(4) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and National Westminster Bank plc
(b)(5) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and Royal Bank of Canada Europe Limited
(b)(6) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and UBS AG London Branch
(b)(7) Loan Agreement (long term) dated March 23, 1999 among
Caradon plc and Westdeutsche Landesbank Girozentrale
(b)(8) Loan Agreement (long term) dated December 22, 1998 among
Caradon plc and Den Danske Bank London Branch
(b)(9) Loan Agreement (short term) dated December 22, 1998 among
Caradon plc and Barclays Bank plc
(b)(10) Loan Agreement (short term) dated December 22, 1998 among
Caradon plc and Midland Bank plc
(b)(11) Loan Agreement (short term) dated December 22, 1998 among
Caradon plc and National Westminster Bank plc
(b)(12) Loan Agreement (short term) dated December 22, 1998 among
Caradon plc and Royal Bank of Canada Europe Limited
(b)(13) Loan Agreement (short term) dated March 23, 1999 among
Caradon plc and Westdeutsche Landesbank Girozentrale
(b)(14) Loan Agreement (short term) dated December 22, 1998 among
Caradon plc and Den Danske Bank London Branch
(c)(1) Agreement and Plan of Merger dated as of July 28, 1999 among
Parent, the Purchaser and the Company
(c)(2) Stockholder Agreement dated July 28, 1999 among Parent, the
Purchaser and American Industrial Partners Capital Fund,
L.P.
(c)(3) Form of Stockholder Agreement dated July 28, 1999 among
Parent, the Purchaser and certain directors and executive
officers of the Company
(c)(4) Confidentiality Agreement dated June 10, 1999 between Parent
and the Company
(c)(5) Assurance Letter dated July 28, 1999 from Caradon plc to the
Company
(d) None
(e) Not applicable
(f) None
</TABLE>
6
<PAGE> 1
EXHIBIT (a)(1)
Offer to Purchase
All Outstanding Shares of Common Stock
of
EASCO, INC.
at
$15.20 NET PER SHARE
by
E ACQCO INC.
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED
AS OF JULY 28, 1999 AMONG CARADON INC. ("PARENT"), E ACQCO INC. (THE
"PURCHASER") AND EASCO, INC. (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE
COMPANY HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND THE MERGER AGREEMENT
REFERRED TO HEREIN AND THE TRANSACTIONS CONTEMPLATED THEREBY, HAS UNANIMOUSLY
DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER ARE FAIR TO AND IN
THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS OF THE COMPANY TENDER THEIR SHARES (AS DEFINED HEREIN) PURSUANT TO
THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS) AT
THE TIME OF ACCEPTANCE FOR PAYMENT. SEE SECTIONS 1 AND 15 BELOW FOR ADDITIONAL
TERMS AND CONDITIONS OF THE OFFER.
-------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal or such facsimile, or, in the case of a book-entry transfer effected
pursuant to the procedure set forth in Section 2, an Agent's Message (as defined
herein), and any other required documents, to the Depositary (as defined herein)
and either deliver the certificates for such Shares to the Depositary along with
the Letter of Transmittal or facsimile or deliver such Shares pursuant to the
procedure for book-entry transfer set forth in Section 2 of this Offer to
Purchase or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder. A
stockholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such stockholder desires to
tender such Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply in a
timely manner with the procedure for book-entry transfer, or who cannot deliver
all required documents to the Depositary prior to the expiration of the Offer,
may tender such Shares by following the procedure for guaranteed delivery set
forth in Section 2 of this Offer to Purchase.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
or any other tender offer materials may be directed to D.F. King & Co., Inc.,
who is acting as the Information Agent, at its address and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks, trust companies and other nominees.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
August 3, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
INTRODUCTION..................................................... 1
1. Terms of the Offer.......................................... 3
2. Procedure for Tendering Shares.............................. 4
3. Withdrawal Rights........................................... 7
4. Acceptance for Payment and Payment for Shares............... 8
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends............................ 10
7. Certain Effects of the Transaction.......................... 10
8. Certain Information Concerning the Company.................. 12
9. Certain Information Concerning the Purchaser, Parent and
Caradon plc................................................. 13
10. Source and Amount of Funds.................................. 17
11. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company............................... 18
12. Purpose of the Offer and the Merger; Plans for the
Company..................................................... 19
13. The Merger Agreement and the Stockholder Agreements......... 19
14. Dividends and Distributions................................. 28
15. Certain Conditions to the Purchaser's Obligations........... 28
16. Certain Legal Matters....................................... 30
17. Fees and Expenses........................................... 32
18. Miscellaneous............................................... 33
ANNEX I: Certain Information Concerning the Directors and
Executive Officers of Caradon plc,
Parent and the Purchaser........................... 34
</TABLE>
<PAGE> 3
To the holders of Common Stock of Easco, Inc.
INTRODUCTION
E Acqco Inc., a Delaware corporation (the "Purchaser") and an indirect
wholly owned subsidiary of Caradon Inc., a Delaware corporation ("Parent"),
hereby offers to purchase all outstanding shares of Common Stock, $.01 par value
(the "Shares"), of Easco, Inc., a Delaware corporation (the "Company"), at a
purchase price of $15.20 per Share, net to the seller in cash, without interest,
all upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Offer").
Tendering stockholders whose Shares are registered in their own name and
who tender Shares directly to the Depositary (as defined below) will not be
obligated to pay brokerage fees or commissions to the Purchaser or the
Depositary or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Stockholders who hold their Shares through a bank or broker should check with
such institution as to whether they charge any service fees. The Purchaser will
pay the fees and expenses of ChaseMellon Shareholder Services, L.L.C., which is
acting as the Depositary (the "Depositary"), and D. F. King & Co., Inc., which
is acting as Information Agent (the "Information Agent"), in connection with the
Offer. See Section 17.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY TENDER THEIR SHARES
PURSUANT TO THE OFFER.
Wasserstein Perella & Co., Inc. ("Wasserstein Perella"), the Company's
financial advisor, has delivered to the Company's Board of Directors its written
opinion that the $15.20 per Share cash consideration to be received by the
Company's stockholders in the Offer and the Merger is fair to such stockholders
(other than Parent or the Purchaser and their respective subsidiaries and
affiliates) from a financial point of view. A copy of such opinion is contained
in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 which
is being distributed to the Company's stockholders.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, WHICH
WILL BE 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 30, 1999, OR SUCH
OTHER TIME TO WHICH THE PURCHASER EXTENDS THE OFFER, SUCH NUMBER OF SHARES THAT
WOULD CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES AT THE DATE OF THE
EXPIRATION OF THE OFFER (ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE SHARES
OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER) (THE "MINIMUM CONDITION"). THE
OFFER IS ALSO CONDITIONED UPON THE WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), APPLICABLE TO
THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of July 28, 1999 (the "Merger Agreement"), among Parent, the Purchaser and
the Company. The Merger Agreement provides that, among other things, after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with the relevant
provisions of the Delaware General Corporation Law, as amended (the "Delaware
Law"), the Purchaser will be merged with and into the Company (the "Merger"). If
the Purchaser acquires at least 90% of the outstanding Shares pursuant to the
Offer, the Purchaser would be able to effect the Merger pursuant to the
"short-form" merger provisions of Section 253 of the Delaware Law, without prior
notice to, or any action by, any stockholder of the Company. See Section 12.
Following consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will be an indirect wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share that is issued and outstanding (other than Shares held (i) in
the treasury of the Company or by Parent or any direct or indirect wholly owned
subsidiary of Parent immediately before the Effective Time, or (ii) by
stockholders, if any, who are entitled to and who properly exercise appraisal
rights under the Delaware Law) will be converted into the right to receive the
Offer Price. The "Offer Price" per Share is $15.20 (or any higher price that may
be paid for each Share pursuant to
1
<PAGE> 4
the Offer) net to the seller in cash, without interest thereon. See Section 5
for a description of certain tax consequences of the Offer and the Merger.
The Merger Agreement provides that, promptly after the Purchaser acquires
any Shares pursuant to the Offer, and from time to time thereafter as the
Purchaser acquires Shares, Parent will be entitled to designate such number of
directors, rounded up to the next whole number, on the Company's Board of
Directors as is equal to the product of (i) the total number of directors on the
Board of Directors (giving effect to the directors designated by Parent)
multiplied by (ii) the percentage of outstanding Shares then beneficially owned
by the Purchaser. However, until the Effective Time, the Board of Directors of
the Company will continue to have at least one director who was a director on
the date of the Merger Agreement and who is neither an officer of the Company
nor a designee, stockholder, affiliate or associate of Parent (each, an
"Independent Director"). If no Independent Directors remain on the Company's
Board of Directors, the other directors will designate one person to fill such
vacancy who meets the eligibility requirements for Independent Directors. The
Company has agreed either to increase (but not above 10 persons) the size of the
Board of Directors of the Company or to obtain the resignation of such number of
directors as is necessary to enable the Purchaser's designees to be elected or
appointed to the Board.
The Company has advised the Purchaser that as of the date of the Merger
Agreement, there were (i) 9,673,224 Shares issued and outstanding (excluding
Shares held by the Company or any direct or indirect wholly owned subsidiary)
and (ii) 836,475 Shares reserved for issuance under outstanding stock options.
As of the date hereof, neither the Purchaser nor Parent beneficially owns any
Shares, except as may be attributable to it by reason of entering into the
Stockholder Agreements as discussed below. If at least a majority of the Shares
are validly tendered and not withdrawn in the Offer (assuming the exercise of
all options to purchase Shares outstanding at the expiration date of the Offer),
the Minimum Condition will be satisfied and, upon the purchase of such Shares,
the Purchaser will control a majority of the outstanding Shares. Accordingly,
the Purchaser would have sufficient voting power to approve the Merger without
the affirmative vote of any other stockholder. See Section 15. No Shares owned
by the Company or any direct or indirect wholly owned subsidiary will be
tendered in the Offer.
The Purchaser and Parent have entered into Stockholder Agreements (the
"Stockholder Agreements"), each dated as of July 28, 1999, with American
Industrial Partners Capital Fund, L.P. ("AIP") and each of the Company's
directors and executive officers who own Shares. Those stockholders (the
"Stockholders") that entered into the Stockholder Agreements collectively own
approximately 46% of the outstanding Shares as of the date of the Merger
Agreement (excluding Shares held by the Company or any direct or indirect wholly
owned subsidiary). Such Stockholders would collectively own approximately 49% of
the outstanding Shares assuming that all outstanding stock options were
exercised. Under the Stockholder Agreements, each Stockholder agreed, among
other things, to validly tender in the Offer the Shares beneficially owned by it
or him, as well as any Shares subsequently acquired by it or him. The
Stockholder Agreements are more fully described in Section 13. Pursuant to its
Stockholder Agreement, AIP (owning approximately 44% of the outstanding Shares)
has also agreed to vote its Shares in favor of the Merger, the adoption by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other transactions contemplated by the Merger Agreement, and agreed to
vote against (i) any Takeover Proposal (as defined in Section 13) by any third
party, (ii) the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement): (a) any extraordinary corporation
transaction, such as a merger, consolidation or other business combination
involving the Company or its subsidiaries; (b) a sale, lease or transfer of a
material amount of assets of the Company or its subsidiaries or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its subsidiaries; (c)(1) any change in the majority of the board of directors of
the Company; (2) any change in the present capitalization of the Company or any
amendment of the Company's Certificate of Incorporation; (3) any other change in
the Company's corporate structure or business; or (4) any other action; which,
in the case of the matters referred to in clauses (1), (2) or (3) above, is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, discourage or materially and adversely affect the contemplated
economic benefits to Parent of the Merger or the Offer. Pursuant to its
Stockholder Agreement, AIP has also granted to Parent an irrevocable proxy
pursuant to which it irrevocably appointed representatives of Parent and the
Purchaser as its proxies and attorneys-in-fact to vote its Shares in the
foregoing manner at any time until the earlier to occur of the valid termination
of the Merger Agreement or the Effective Time.
2
<PAGE> 5
The Merger Agreement and the Stockholder Agreements are more fully
described in Section 13. Certain federal income tax consequences of the sale of
Shares pursuant to the Offer and the exchange of Shares for the Offer Price
pursuant to the Merger are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered and not withdrawn prior to the Expiration Date in accordance with
Section 4. The term "Expiration Date" means 12:00 midnight, New York City time,
on Monday, August 30, 1999, unless the Purchaser extends the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.
If the Purchaser decides, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time that
notice of such increase is first published, sent or given to holders of Shares
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice is first so published, sent or given,
then the Offer will be extended until the expiration of such period of 10
business days. For purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or a federal holiday and consists of the time period
from 12:01 a.m. through 12:00 midnight, New York City time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION. SEE SECTION 15. If the conditions to the Offer are not
satisfied prior to the Expiration Date, the Purchaser reserves the right (but
shall not be obligated), subject to the terms of the Merger Agreement, to (i)
decline to purchase any of the Shares tendered and terminate the Offer, (ii)
waive any of the conditions to the Offer, to the extent permitted by applicable
law, and, subject to complying with applicable rules and regulations of the SEC,
purchase all Shares validly tendered or (iii) extend the Offer and, subject to
the right of stockholders to withdraw Shares until the Expiration Date, retain
the Shares tendered during the period or periods for which the Offer is
extended.
Under the terms of the Merger Agreement, the Purchaser may not (except as
described in the next sentence), without the consent of the Company, reduce the
number of Shares subject to the Offer, amend or waive the Minimum Condition,
reduce the Offer Price or change the form of consideration payable in the Offer,
or amend any other condition of the Offer in any manner adverse to the holders
of Shares. Notwithstanding the foregoing, the Purchaser may, without the consent
of the Company, extend the Offer (i) if at the then-scheduled Expiration Date of
the Offer, all of the conditions shall not have been satisfied or waived, until
such time as such conditions are satisfied or waived, or (ii) on one or more
occasions for an aggregate period of not more than ten business days beyond the
then-scheduled Expiration Date if, as of such Expiration Date, sufficient Shares
have not been tendered in order for the Merger to be effected pursuant to a
"short-form" merger pursuant to Section 253 of the Delaware Law without prior
notice to, or any action by, any stockholders of the Company (which would
require that the Purchaser has acquired at least 90% of the outstanding Shares).
See Sections 13 and 15.
Subject to the limitations set forth in this Offer to Purchase and the
Merger Agreement, the Purchaser reserves the right (but will not be obligated),
at any time or from time to time in its sole discretion, to extend the period
during which the Offer is open by giving oral or written notice of such
extension to the Depositary and by making a public announcement of such
extension. There can be no assurance that the Purchaser will exercise its right
to extend the Offer.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") and subject to the limitations set forth in the
Merger Agreement, the Purchaser expressly reserves the right, at any time and
from time to time, in its sole discretion, (i) to delay payment for any Shares
regardless of whether such Shares were already accepted for payment, or to
terminate the Offer and not to accept for payment or pay for any Shares not
already accepted for payment or paid for, upon the occurrence of any of the
conditions set forth in Section 15, by giving oral or written notice of such
delay or termination to the
3
<PAGE> 6
Depositary, and (ii) at any time or from time to time, to amend the Offer in any
respect. The Purchaser's right to delay payment for any Shares or not to pay for
any Shares theretofore accepted for payment is subject to the applicable rules
and regulations of the SEC, including Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will be
followed, as promptly as practicable, by a public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c) and 14e-1(d) under the Exchange Act. Without limiting the obligation of
the Purchaser under such rule or the manner in which the Purchaser may choose to
make any public announcement, the Purchaser currently intends to make
announcements by issuing a press release to the Dow Jones News Service and
making any appropriate filing with the SEC.
If, subject to the terms of the Merger Agreement, the Purchaser makes a
material change in the terms of the Offer or the information concerning the
Offer, or if it waives a material condition of the Offer (including, with the
consent of the Company, a waiver of the Minimum Condition), the Purchaser will
disseminate additional tender offer materials and extend the Offer if and to the
extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act or
otherwise. The minimum period during which a tender offer must remain open
following material changes in the terms of the offer or the information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changes. With respect to a
change in price or a change in percentage of securities sought, a minimum 10
business day period may be required to allow for adequate dissemination to
stockholders and investor response.
The Company has provided the Purchaser with the Company's list of
stockholders and security position listings for the purpose of disseminating the
Offer to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on the
Company's stockholder list and will be furnished to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For a stockholder validly to tender Shares pursuant to the
Offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees or, in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, and either (a) certificates for
tendered Shares must be received by the Depositary at one of such addresses
prior to the Expiration Date or (b) such Shares must be delivered pursuant to
the procedure for book-entry transfer set forth below and a Book-Entry
Confirmation (as defined below) received by the Depositary prior to the
Expiration Date, or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below and in the Letter of Transmittal.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase
4
<PAGE> 7
prior to the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedure described below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation."
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered holder
of Shares (which, for purposes of this Section, includes any participant in the
Book-Entry Transfer Facility's system whose name appears on a security position
listing as the owner of the Shares) tendered therewith and such registered
holder has not completed either the box entitled "Special Delivery Instructions"
or the box entitled "Special Payment Instructions" on the Letter of Transmittal
or (ii) such Shares are tendered for the account of a firm that is a participant
in the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If the certificates for
Shares are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or certificates for Shares
not tendered or not accepted for payment are to be issued to a person other than
the registered holder of the certificates surrendered, the tendered certificates
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name or names of the registered holders or owners appear
on the certificates, with the signatures on the certificates or stock powers
guaranteed as described above. See Instructions 1 and 5 to the Letter of
Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day," for purposes of the preceding
sentence, is any day on which The Nasdaq Stock Market is open for business.
5
<PAGE> 8
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares (or a timely
Book-Entry Confirmation of a transfer of such Shares as described in this
Section 2), (ii) a Letter of Transmittal (or copy thereof), properly completed
and duly executed, with any required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message, and (iii) any other documents required
by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at
different times depending upon when certificates for Shares or Book-Entry
Confirmations are actually received by the Depositary. UNDER NO CIRCUMSTANCES
WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Appointment; Binding Agreement. By executing a Letter of Transmittal as set
forth above (including through delivery of an Agent's Message), the tendering
stockholder will irrevocably appoint designees of the Purchaser as such
stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after the date hereof. All such proxies shall be considered
irrevocable and coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts for payment Shares tendered by such stockholder as provided herein. Upon
such acceptance for payment, all prior powers of attorney and proxies given by
such stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney and
proxies may be given (and, if given, will not be deemed effective) with respect
thereto. The designees of the Purchaser will be empowered to exercise all voting
and other rights with respect to such Shares or other securities or rights in
respect of any annual, special or adjourned meeting of the Company's
stockholders, or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting and other rights
with respect to such Shares and other securities or rights, including voting at
any meeting of stockholders.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer, as well as the tendering stockholder's representation
and warranty that (i) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares), and
(ii) when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The Purchaser's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which, in the opinion of the Purchaser's counsel,
may be unlawful. The Purchaser also reserves the absolute right to waive any
defect or irregularity in any tender with respect to any particular Shares,
whether or not similar defects or irregularities are waived in the case of other
Shares. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or waived. None of
the Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or to incur any liability for failure to give any such notification. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding on all parties.
6
<PAGE> 9
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must provide the Depositary with such stockholder's correct
taxpayer identification number ("TIN") on a Substitute Form W-9 and certify
under penalty of perjury that such TIN is correct and that such stockholder is
not subject to backup withholding. Certain stockholders (including, among
others, all corporations and certain foreign individuals and entities) are not
subject to backup withholding. If a stockholder does not provide its correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service ("IRS") may impose a penalty on such stockholder, and payment of cash to
such stockholder pursuant to the Offer may be subject to backup withholding of
31%. All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Purchaser and the Depositary). Noncorporate
foreign stockholders should complete and sign the main signature form and a Form
W-8, Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless already
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after Saturday, October 2, 1999. If purchase of or payment for Shares is delayed
for any reason or if the Purchaser is unable to purchase or pay for Shares for
any reason, then, without prejudice to the Purchaser's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of the Purchaser and
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as set forth in this Section 3, subject to Rule
14e-1(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or to return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the Offer.
For a withdrawal of Shares tendered pursuant to the Offer to be effective,
a written or facsimile transmission notice of withdrawal must be timely received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase. Any notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name in which the certificates representing such Shares are registered,
if different from that of the person who tendered the Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer set
forth in Section 2, any notice of withdrawal must also specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Shares and must otherwise comply with such Book-Entry Transfer
Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded. Any Shares properly
withdrawn will be deemed not validly tendered for purposes of the Offer, but may
be retendered at any subsequent time prior to the Expiration Date by following
any of the procedures described in Section 2.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, and its determination will be final and binding on all parties. None
of the Purchaser, Parent, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
7
<PAGE> 10
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all Shares
validly tendered and not withdrawn in accordance with Section 3 prior to the
Expiration Date, promptly after the occurrence of the later of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions described
in Section 15. Any determination concerning the satisfaction of such terms and
conditions will be within the discretion of the Purchaser, and such
determination will be final and binding on all tendering stockholders. See
Sections 1 and 15. The Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order to
comply in whole or in part with any applicable law. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to
the Purchaser's obligation to pay for or to return tendered Shares promptly
after the termination or withdrawal of the Offer).
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares or timely Book-Entry Confirmation of a transfer of
such Shares pursuant to the procedures set forth in Section 2, (ii) a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with all required signature guarantees or, in the case of a
book-entry transfer, an Agent's Message (as defined in Section 2 above) and
(iii) any other documents required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, or the Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to the Purchaser's rights under
Section 1, the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 3 above and as otherwise required by Rule 14e-1(c) under the Exchange
Act. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER BECAUSE OF
ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering stockholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering stockholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer. The Purchaser will pay
stock transfer taxes with respect to the transfer and sale to it or its order
pursuant to the Offer, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, as well as any charges and expenses of the Depositary and
the Information Agent.
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or otherwise, the certificates for such Shares will be
returned, and if certificates are submitted for more Shares than are tendered,
new certificates for the Shares not tendered will be sent, in each case without
expense, to the tendering stockholder (or, in the case of Shares delivered by
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedure set forth in Section 2,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer. Any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
8
<PAGE> 11
If, prior to the Expiration Date, the Purchaser increases the price being
paid for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to beneficial owners of Shares whose
Shares are purchased pursuant to the Offer or whose Shares are converted into
the Offer Price in the Merger. The discussion is for general information only
and does not purport to consider all aspects of federal income taxation that may
be relevant to beneficial owners of Shares. The discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing, proposed and temporary regulations issued thereunder and
administrative and judicial interpretations thereof, all of which are subject to
change. The discussion applies only to beneficial owners of Shares in whose
hands Shares are capital assets within the meaning of Section 1221 of the Code,
and may not apply to Shares received pursuant to the exercise of employee stock
options or otherwise as compensation, or to certain types of beneficial owners
of Shares (such as insurance companies, tax-exempt organizations and
broker-dealers) who may be subject to special rules. This discussion does not
discuss the federal income tax consequences to a beneficial owner of Shares who,
for United States federal income tax purposes, is a non-resident alien
individual, a foreign corporation, a foreign partnership or a foreign estate or
trust, nor does it consider the effect of any foreign, state or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH BENEFICIAL OWNER OF
SHARES SHOULD CONSULT SUCH BENEFICIAL OWNER'S OWN TAX ADVISOR TO DETERMINE THE
APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH BENEFICIAL OWNER AND THE
PARTICULAR TAX EFFECTS TO SUCH BENEFICIAL OWNER OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF FOREIGN, STATE, LOCAL AND OTHER TAX
LAWS.
Sales of Shares pursuant to the Offer (and the receipt of cash by
stockholders of the Company pursuant to the Merger) will be taxable transactions
for federal income tax purposes under the Code, and may also be taxable
transactions under applicable foreign, state, local and other tax laws.
Generally, for federal income tax purposes, a tendering stockholder will
generally recognize gain or loss equal to the difference between the amount of
cash received by the stockholder pursuant to the Offer (or pursuant to the
Merger) and the aggregate tax basis in the Shares tendered by the stockholder
and purchased pursuant to the Offer (or converted pursuant to the Merger). Gain
or loss will be calculated separately for each block of Shares (i.e., Shares
acquired at the same time and price) tendered and purchased pursuant to the
Offer (or converted pursuant to the Merger).
In general, cash received in respect of Shares whose holders exercise
appraisal rights under the Delaware Law will result in the recognition of
capital gain or loss to the beneficial owner of such Shares. Any such beneficial
owner should consult such owner's tax advisor in that regard.
If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
stockholder's holding period for the Shares exceeds one year. Long-term capital
gains recognized by a tendering individual stockholder will generally be taxed
at a maximum federal income tax rate of 20%. The ability to deduct capital
losses is subject to limitations.
A stockholder (other than certain exempt stockholders including, among
others, all corporations) that tenders Shares may be subject to 31% backup
withholding unless the stockholder provides its TIN and certifies that such
number is correct or properly certifies that it is awaiting a TIN and certifies
as to no loss of exemption from backup withholding and otherwise complies with
the applicable requirements of the backup withholding rules. A stockholder that
does not furnish its correct TIN or that does not otherwise establish a basis
for an exemption from backup withholding may be subject to a penalty imposed by
the IRS. Each stockholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchaser and the
Depositary).
9
<PAGE> 12
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Company's Shares are quoted for trading on the Nasdaq National Market
(trading symbol "ESCO"). The following table sets forth, for the calendar
quarters indicated, the reported high and low sales prices for the Shares, as
reported by the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C> <C> <C>
1997
First Quarter............................................. $ 9 7/8 $ 6 7/8
Second Quarter............................................ 10 1/8 7 1/4
Third Quarter............................................. 13 1/2 9 1/2
Fourth Quarter............................................ 13 5/8 11 5/16
1998
First Quarter............................................. $15 3/4 $11 3/8
Second Quarter............................................ 16 3/8 8 7/8
Third Quarter............................................. 12 1/4 6 3/8
Fourth Quarter............................................ 9 1/2 7 1/4
1999
First Quarter............................................. $ 8 13/16 $ 6 3/4
Second Quarter............................................ 11 6 1/4
Third Quarter (through August 2, 1999).................... 15 3/8 10 1/4
</TABLE>
On July 27, 1999, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing price per
Share as reported on the Nasdaq National Market was $12.00. On August 2, 1999,
the last full day of trading prior to the commencement of the Offer, the closing
price per Share as reported on the Nasdaq National Market was $15.00.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
According to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, beginning in the third quarter of 1995, the Company has paid
regular quarterly dividends of $.01 per Share. With respect to the current
quarter, the Company changed the record date of its previously declared regular
quarterly cash dividend of $.01 per share from August 16, 1999 to September 15,
1999, payable September 30, 1999. Holders whose Shares are accepted for payment
by the Purchaser prior to the record date for the previously declared dividend
will not be entitled to receive the dividend with respect to those Shares.
7. CERTAIN EFFECTS OF THE TRANSACTION.
Parent and the Purchaser intend to seek to cause the Company to terminate
the registration of the Shares under the Exchange Act as soon after the
completion of the Offer as the requirements for such termination are met. If
registration of the Shares is not terminated prior to the Merger, the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly, which could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements for continued designation on the
Nasdaq National Market. To maintain such designation, a
10
<PAGE> 13
security must substantially meet one of two maintenance standards. The first
maintenance standard requires that (i) there be at least 750,000 publicly held
shares, (ii) the publicly held shares have a market value of at least $5
million, (iii) the issuer have net tangible assets of at least $4 million, (iv)
there be at least 400 stockholders of round lots, (v) the minimum bid price per
share be at least $1.00 and (vi) there be at least two registered and active
market makers. The second maintenance standard requires that (i) the issuer have
either (a) a market capitalization of at least $50 million or (b) total assets
and total revenue of at least $50 million each for the most recently completed
fiscal year or two of the last three most recently completed fiscal years, (ii)
there be at least 1,100,000 shares publicly held, (iii) the publicly held shares
have a market value of at least $15 million, (iv) the minimum bid price per
share be at least $5.00, (v) there be at least 400 stockholders of round lots
and (vi) there be at least four registered and active market makers.
If these standards for continued designation on the Nasdaq National Market
are not met, the Shares might nevertheless continue to be included in the Nasdaq
SmallCap Market. Continued inclusion in the Nasdaq SmallCap Market, however,
would require that (i) there be at least 300 round lot holders, (ii) there be at
least 500,000 publicly held shares, (iii) the publicly held shares have a market
value of at least $1 million, (iv) there be at least two registered and active
market makers, of which one may be entering stabilizing bids and (v) the issuer
have either (a) net tangible assets of at least $2 million, (b) market
capitalization of at least $35 million or (c) net income of at least $500,000 in
the most recently completed fiscal year or in two of the last three most
recently completed fiscal years. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for the purpose of determining whether either
of The Nasdaq Stock Market listing criteria are met. According to the Company,
as of July 28, 1999, there were 9,673,224 Shares outstanding (not including
Shares reserved for issuance pursuant to outstanding stock options or Shares
held by the Company or any direct or indirect subsidiary of the Company), held
by approximately 106 holders of record.
If the purchase of Shares pursuant to the Offer causes the Shares to no
longer meet the requirements for continued inclusion in the Nasdaq National
Market or the Nasdaq SmallCap Market as a result of a reduction in the number or
market value of publicly held Shares or the number of round lot holders or
otherwise, as the case may be, the market for Shares could be adversely
affected. It is possible that the Shares would continue to trade in the
over-the-counter market and that price quotations would be reported by other
sources. The extent of the public market for the Shares and the availability of
such quotations, however, would depend upon the number of holders of Shares
remaining at such time, the interest in maintaining a market in Shares on the
part of securities firms, the possible termination of registration of the Shares
under the Exchange Act, as described below, and other factors.
Exchange Act Registration. Registration of the Shares under the Exchange
Act may be terminated upon application of the Company to the SEC if the Shares
are neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the Exchange
Act would, subject to Section 15(d) of the Exchange Act, substantially reduce
the information required to be furnished by the Company to its stockholders and
to the SEC and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit recovery provisions of
Section 16(b) of the Exchange Act, the requirement of furnishing a proxy or
information statement pursuant to Section 14(a) or (c) of the Exchange Act in
connection with stockholders' meetings and the related requirement of furnishing
an annual report to stockholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
144A issued under the Securities Act of 1933, as amended, may be impaired or
eliminated. Parent and the Purchaser intend to seek to cause the Company to
apply for termination of registration of the Shares under the Exchange Act as
soon after the completion of the Offer as the requirements for such termination
are met.
If registration of the Shares is not terminated prior to the Merger, then
trading of the Shares will cease to be reported on the Nasdaq National Market
and the registration of the Shares under the Exchange Act will be terminated
following the consummation of the Merger.
11
<PAGE> 14
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers or other institutions. If registration of Shares under the Exchange
Act were terminated, the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the SEC and other public sources.
Although neither the Purchaser, Parent nor Caradon plc has any knowledge that
would indicate that statements contained herein based upon such documents are
untrue, none of the Purchaser, Parent or the Information Agent assume any
responsibility for the accuracy or completeness of the information concerning
the Company, furnished by the Company, or contained in such documents and
records or for any failure by the Company to disclose events that may have
occurred or may affect the significance or accuracy any such information but
that are unknown to the Purchaser, Parent or the Information Agent.
General. The Company is a Delaware corporation with its principal offices
located at 706 South State Street, Girard, Ohio 44420, telephone number (330)
545-4311. Its Shares are listed on The Nasdaq Stock Market under the trading
symbol "ESCO."
According to its Annual Report on Form 10-K for the year ended December 31,
1998, the Company is the largest independent extruder of soft alloy aluminum
products in the United States. In 1998, the Company shipped 313.9 million pounds
of aluminum extrusions, representing approximately 9% of all U.S. soft alloy
extrusion shipments. The Company operates 21 aluminum extrusion presses and
three casting facilities at eleven plants in five states, and its products
include standard and custom profiles (shapes of specific lengths and
cross-sectional design), conduit and drawn tubing. The Company also produced
vinyl extrusions through operations that were sold in January 1998.
The Company serves approximately 2,600 customers spanning primarily five
industry groups (building and construction, transportation, distribution,
electrical and consumer durables), and its extrusions are used in a wide variety
of products including door and window frames, truck bodies, truck trailers,
recreational vehicles, automobiles, boats, home appliances, patio enclosures and
furniture, office furniture and equipment, picture frames, sport and exercise
equipment, health care equipment, coaxial cable and electrical conduit.
Selected Financial Information. Set forth below is certain summary
consolidated financial data with respect to the Company excerpted or derived
from financial information contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 1998 and the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1999. More comprehensive financial
information is included in such reports and other documents filed by the Company
with the SEC, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information
12
<PAGE> 15
(including any related notes) contained therein. Such reports and other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below.
EASCO, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FOR YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------- ------------------
1998 1997 1996 1999 1998
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Net sales................................. $313,790 $334,515 $321,031 $81,573 $80,854
Gross profit.............................. 38,519 37,267 31,568 11,081 9,649
Impairment of long-lived assets........... -- 721 23,335 -- --
Unusual items (1)......................... (3,041) (316) 3,479 -- (3,041)
Net income (loss)......................... 7,717 5,392 (22,318) 1,768 3,408
Diluted net income (loss) per share....... $ 0.74 $ 0.51 $ (2.17) $ 0.18 $ 0.32
</TABLE>
<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, MARCH 31,
--------------------- -----------
1998 1997 1999
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets.............................................. $220,600 $ 236,264 $225,307
Total debt................................................ 91,252 85,000 91,131
Stockholders' equity...................................... 64,148 68,519 65,821
Cash dividends per share.................................. $ 0.04 $ 0.04 $ 0.01
</TABLE>
- -------------------------
(1) Unusual items include a gain on the sale of the Company's vinyl extrusion
operation in 1998; a plant restructuring, retirement plan termination and
revision of environmental contingency obligation estimates in 1997; and an
executive reorganization in 1996.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and in accordance therewith files periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular dates,
concerning the Company's directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities and
any material interests of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may also be obtained at prescribed rates from the Public Reference
Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549. The SEC also
maintains a World Wide Web site on the internet at http://www.sec.gov that
contains reports and other information regarding registrants that file
electronically with the SEC.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, PARENT AND CARADON PLC.
The Purchaser is a newly formed Delaware corporation and an indirect wholly
owned subsidiary of Parent. The Purchaser was incorporated in July 1999 to
facilitate Parent's acquisition of the Company and has not conducted any
unrelated activities since its organization. The principal offices of the
Purchaser are located at 2 Corporate Drive, Office 210, Trumbull, Connecticut
06611, telephone number (203) 445-9135. All
13
<PAGE> 16
outstanding shares of capital stock of the Purchaser are owned indirectly by
Parent (see Annex I for additional information on corporate structure). Until
immediately prior to the time the Purchaser purchases Shares pursuant to the
Offer, it is not anticipated that the Purchaser will have any significant assets
or liabilities or will engage in activities other than those incident to its
formation and capitalization and the transactions contemplated by the Offer.
Parent, a Delaware corporation, has its principal office located at 2
Corporate Drive, Office 210, Trumbull, Connecticut 06611, telephone number (203)
445-9135. Parent, through various indirect subsidiaries, operates in the
security printing, extrusions and electrical sectors in North America.
Parent's security printing business, operated through two separate
subsidiaries, maintains strong national positions in the US check supply
industry. Clarke American Checks, Inc. is the third largest supplier to
financial institutions in the US, and is also an increasingly important out
source provider of custom service centers to financial institution customers.
Checks In The Mail, Inc. is the third largest direct marketing supplier of
checks, forms and other products to private and commercial customers.
Parent's extrusion business operates under the name Caradon Mideast
Aluminum in Pennsylvania and Caradon Indalex in Georgia. Caradon Mideast
Aluminum produces anodized and fabricated aluminum extrusions for high quality,
close tolerance applications, primarily in the electrical market and machinery
and equipment market. Indalex is a manufacturer of aluminum extrusions focusing
on the building and construction markets.
Parent's electrical business, Novar Controls Corporation, designs and
manufactures advanced building control systems in Copley, Ohio. Novar's energy
infosystems deliver the power to optimize control of both energy demand and
supply-side energy management.
Parent is an indirect wholly owned subsidiary of Caradon plc, a public
limited company organized under the laws of England. Caradon plc's ordinary
shares are listed on the London Stock Exchange. The address of the principal
office of Caradon plc is 24 Queens Road, Weybridge, Surrey KT139UX, United
Kingdom.
Caradon plc operates in four principal business sectors: plumbing,
electrical, extrusions and security printing. Caradon plc's plumbing and
electrical sectors operate primarily in the United Kingdom and elsewhere in
Europe. High quality, innovative products and strong brand names characterize
these businesses. Caradon plc's extrusion and security printing sectors operate
primarily in North America, through various subsidiaries wholly owned by Parent,
as discussed above.
The Purchaser, Parent and Caradon plc are also affiliated with various
other corporate entities, as described in Annex I.
14
<PAGE> 17
Set forth below is certain summary consolidated financial information
concerning Caradon plc.
CARADON PLC
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS OF POUNDS STERLING(1))
<TABLE>
<CAPTION>
SIX MONTHS
FOR THE YEARS ENDED ENDED
DECEMBER 31 JUNE 30
----------------------------- --------------
1998 1997 1996 1999 1998
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Turnover(2)........................................ 1,545.2 1,716.6 2,112.8 672.3 766.0
======= ======= ======= ===== =====
Group operating profit............................. 119.3 128.1 183.3 62.9 55.3
Share of operating profits of associated
undertakings.................................... 1.2 1.6 0.9 0.6 0.5
------- ------- ------- ----- -----
Total operating profit(2).......................... 120.5 129.7 184.2 63.5 55.8
Net interest....................................... (5.4) (0.7) (6.0) (3.0) (2.1)
------- ------- ------- ----- -----
Profit before exceptional items.................... 115.1 129.0 178.2 60.5 53.7
Disposal and closure of businesses................. (249.2) -- (25.7) (3.8) 18.3
------- ------- ------- ----- -----
(Loss)/profit before taxation...................... (134.1) 129.0 152.5 56.7 72.0
Taxation........................................... (46.5) (39.1) (42.1) (21.8) (20.2)
------- ------- ------- ----- -----
(Loss)/profit after taxation....................... (180.6) 89.9 110.4 34.9 51.8
------- ------- ------- ----- -----
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31 JUNE 30
------------------ -----------
1998 1997 1999(3)
---- ---- -------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA
Intangible assets...................................... 4.2 -- 30.2
Tangible assets........................................ 469.6 501.1 360.1
Investments............................................ 34.9 15.5 37.2
Working capital........................................ 14.7 13.8 60.5
Net cash............................................... 63.9 129.0 57.8
------ ------ -----
Total assets less current liabilities.................. 587.3 659.4 545.8
Creditors due after more than one year
Bank loans.......................................... (170.0) (219.2) (83.6)
Other creditors..................................... (4.0) (5.9) (4.1)
Provisions for liabilities and charges................. (35.1) (44.6) (61.5)
------ ------ -----
Net assets............................................. 378.2 389.7(4) 396.6
====== ====== =====
Shareholders' funds.................................... 373.8 382.2 392.3
Minority interests..................................... 4.4 7.5 4.3
------ ------ -----
378.2 389.7 396.6
------ ------ -----
</TABLE>
(1) Caradon plc publishes its financial statements in pounds sterling. The
United States dollar exchange rate based on the London closing mid-rates for
dollars to pounds sterling, expressed in dollars per pound, for the fiscal
dates indicated, are as follows and are based on published financial
sources:
<TABLE>
<CAPTION>
YEAR END RATE YEAR AVERAGE
------------- ------------
<S> <C> <C> <C>
Fiscal Year Ended December 31, 1998 1.66 1.66
Fiscal Year Ended December 31, 1997 1.65 1.64
Fiscal Year Ended December 31, 1996 1.71 1.56
</TABLE>
15
<PAGE> 18
The United States dollar exchange rate, expressed in dollars per pound, on
June 30, 1999 was 1.58, and the six month average rate for the period ended
June 30, 1999 was 1.61 and for the period ended June 30, 1998 was 1.65. The
statement of income data set forth above was based on the average exchange
rate for the indicated period. The balance sheet data set forth above was
based on the exchange rate at the date indicated.
(2) Turnover and total operating profit has declined since December 31, 1996
primarily due to the disposal of non-core businesses.
(3) The balance sheet data as of June 30, 1999 reflects the new UK accounting
standard Financial Reporting Standard ("FRS") 12. The balance sheet data for
the years ended December 31, 1998 and 1997 has not been restated for FRS12.
(4) The net assets were reduced in 1997 following the return of capital to
shareholders totaling L223.8m.
Although generally accepted accounting principles in the United Kingdom
("UK GAAP") differ in certain significant respects from generally accepted
accounting principles in the United States ("US GAAP"), Parent believes that the
differences are not material to a decision by a holder of Shares whether to
sell, tender or hold any Shares because any such differences would not affect
the ability of the Purchaser to obtain sufficient funds to pay for the Shares to
be acquired pursuant to the Offer. While the following is not a comprehensive
summary of all the differences between UK GAAP and US GAAP, other differences
are unlikely to have a significant effect on the consolidated income or
shareholders' funds of Caradon plc, who will provide the Purchaser with the
funds sufficient to consummate the Offer, the Merger and the other transactions
contemplated by the Merger Agreement.
Goodwill and US Purchase Accounting. Under US GAAP and UK GAAP, purchase
consideration in respect of subsidiaries acquired is allocated on the basis of
appraised values to the various net assets of the subsidiaries at the dates of
acquisition, and any net balance is treated as goodwill. US GAAP requires
goodwill to be recognized as an asset and amortized over its estimated useful
life, not to exceed 40 years. Under UK GAAP, with respect to periods ending on
or prior to December 23, 1998, goodwill was written off directly against
reserves. With respect to periods ending after December 23, 1998, goodwill is
recognized as an asset and amortized over its estimated useful life, presumed
not to exceed 20 years.
Ordinary Dividends. Under UK GAAP, final ordinary dividends are provided
for in the fiscal year in respect of which they are recommended by the board of
directors for approval by the shareholders. Under US GAAP, such dividends are
not provided for until declared by the board of directors.
Deferred Taxation. Under UK GAAP, no provision is made for deferred
taxation if there is reasonable evidence that such deferred taxation will not be
payable in the foreseeable future, and deferred tax assets are generally not
recognized under UK GAAP unless they are likely to be recovered in the
foreseeable future (i.e., one year from the balance sheet date). Under US GAAP,
deferred tax assets and liabilities are recognized in full, and any net deferred
tax assets are then assessed for probable recoverability. As long as it is more
likely than not that sufficient future taxable income will be available to
utilize the deferred tax assets, no valuation allowance is provided.
Tangible Fixed Assets. Under UK GAAP, companies are permitted to carry
tangible fixed assets at valuation (generally current cost or market value as of
the date of last valuation). Under US GAAP, revaluation of tangible fixed assets
is generally not permitted outside of purchase accounting.
Neither the Purchaser, Parent nor Caradon plc is subject to the reporting
requirements of the Exchange Act and, therefore, they do not file reports or
other information with the SEC relating to their business, financial condition
or other matters.
Except as described in this Offer to Purchase, neither Caradon plc, Parent
nor the Purchaser nor, to their knowledge, any of the persons listed in Annex I
(or any associate or majority-owned subsidiary of Caradon plc, Parent or the
Purchaser or any of the persons so listed) (such persons being collectively
referred to in this Section 9 as the "Purchasing Entities"), beneficially owns
any equity security of the Company, and none of
16
<PAGE> 19
the Purchasing Entities or, to the best knowledge of Caradon plc, Parent and the
Purchaser, has effected any transaction in any equity security of the Company
during the past 60 days.
Except as described in this Offer to Purchase, (i) there have not been any
contacts, transactions or negotiations between Parent or the Purchaser, any of
their respective subsidiaries or, to the knowledge of Parent and the Purchaser,
any of the other Purchasing Entities, on the one hand, and the Company or any of
its directors, officers or affiliates, on the other hand, that are required to
be disclosed pursuant to the rules and regulations of the SEC and (ii) neither
Parent nor the Purchaser, nor, to their knowledge any of the other Purchasing
Entities has any contract, arrangement, understanding or relationship with any
person with respect to any securities of the Company.
Except as described in this Offer to Purchase, during the last five years,
neither Parent nor Purchaser, nor, to the knowledge of Parent and the Purchaser,
any of the other Purchasing Entities, (i) has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or (ii) was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws. The name, business address, present principal occupation or employment,
five year employment history and citizenship of each of the directors and
executive officers of Parent and the Purchaser are set forth in Annex I.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to consummate the Offer
and the Merger is expected to be approximately $155 million (assuming the
exercise of all options to purchase Shares prior to the Expiration Date),
excluding related fees and expenses.
Caradon plc will obtain the amounts described in the preceding paragraph
from cash on hand and from its existing credit facilities with various financial
institutions. The total committed funds currently available to Caradon plc under
existing credit facilities aggregate approximately $640 million. The credit
facilities include various five-year facilities (with Bank of America National
Trust & Savings Association, Barclays Bank plc, Den Danske Bank, HSBC (Midland
Bank plc), National Westminster Bank plc, Royal Bank of Canada Europe Limited,
UBS AG and Westdeutsche Landesbank Girozentrale) and various 364-day facilities
(with Barclays Bank plc, Den Danske Bank, HSBC (Midland Bank plc), National
Westminster Bank plc, Royal Bank of Canada Europe Limited and Westdeutsche
Landesbank Girozentrale).
The credit facility agreements described above are in each case between the
specified bank and Caradon plc. The facilities are floating rate, priced at
margins over LIBOR not exceeding .5% p.a. (plus Bank of England Mandatory Costs
where applicable).
There are no unusual or material conditions to be satisfied prior to
drawing funds under the described credit facilities. The facilities are
unsecured but include a negative pledge on the assets of the Caradon group
(subject to certain exceptions). The facilities require compliance with an
interest coverage ratio covenant, calculated on a consolidated basis. The
facilities also require compliance with certain operating covenants that limit,
among other things, disposal of assets (subject to certain exceptions) and the
creation of obligations senior to drawings under the facilities. The foregoing
summary of credit facilities which may be drawn upon in connection with the
Offer and the Merger is qualified in its entirety by reference to the text of
such credit facility agreements, copies of which are filed as exhibits to the
Schedule 14D-1 (as defined below).
The amounts available to Caradon plc under the described credit facilities
and cash on hand exceed the amount that would be required to allow the Purchaser
to fully consummate the Offer and the Merger.
Caradon plc currently plans to repay borrowings under the credit facilities
out of operating cash flow and future financings, although Caradon plc has no
current specific plan with respect thereto. Such decisions when made will be
based on Caradon plc's review from time to time of the advisability of
particular actions, as well as on prevailing interest rates and financial and
other economic conditions.
This description of Caradon plc's existing credit facilities is a summary
only and is not intended to be a complete description of all the terms thereof.
Reference is made to the full text thereof, copies of which are filed as
exhibits to the Tender Offer Statement on Schedule 14D-1 filed by Caradon plc,
Parent and Purchaser
17
<PAGE> 20
with the SEC in connection with the Offer (the "Schedule 14D-1"). The Schedule
14D-1 may be examined at the same places and in the same manner as set forth
with respect to the Company in Section 8.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS AND NEGOTIATIONS WITH
THE COMPANY.
In the ordinary course of Caradon plc's long-term strategic planning,
Caradon plc and its affiliates, including Parent, are often involved in
discussions and investigations concerning possible acquisitions and business
combinations.
In furtherance of Caradon plc's strategic objectives to expand the size and
scope of its North American business operations, on June 10, 1999, Caradon plc,
Parent and the Company entered into a confidentiality agreement, as described in
Section 13 ("The Merger Agreement and the Stockholder Agreements"), and was
furnished a confidential offering memorandum which was being made available to
potential purchasers of the Company. In response to Wasserstein Perella's
solicitation of interest and based upon the confidential offering memorandum, in
late June Caradon plc submitted a non-binding indication of interest concerning
the potential acquisition of the Company, and was thereafter invited to
participate in a second round of bidding.
Caradon plc submitted a written proposal to acquire the Company on July 19,
which included a markup of the draft merger agreement. Caradon plc's proposal
provided for a one-step merger, subject to stockholder approval, in which each
outstanding Share would be converted into the right to receive cash, and
proposed stockholder agreements providing for a grant of a proxy by certain
stockholders of the Company, including AIP.
On July 21, 1999, a representative of Wasserstein Perella, on behalf of the
Company, telephoned a representative of the financial advisor for Caradon plc
and Parent, advised him that the Company preferred Parent's proposal to be
structured as a tender offer with a back-end merger, and stated that the Company
was prepared to work with Caradon plc and Parent toward entering into a
definitive agreement and to recommend such proposal to the Company's Board of
Directors, subject to Parent improving its offer and the satisfactory
negotiation of definitive documentation. Caradon plc and Parent indicated a
willingness to improve its offer on this basis.
On July 24, the Company agreed to enter into exclusive negotiations with
Caradon plc and Parent for a four-day period in order to induce Parent to
improve its offer. From July 24 to July 26, representatives of Caradon plc and
Parent and the Company met at the affiliated offices of Skadden, Arps, Slate,
Meagher & Flom LLP in Chicago to negotiate a definitive agreement and resolve
several open issues, including whether there would be any post-closing survival
of representations and warranties and related indemnification, the amount of the
termination fee, the circumstances under which the termination fee would become
payable and the circumstances under which the Company's Board of Directors could
enter into discussions with another party regarding a Takeover Proposal (as
defined in the Merger Agreement).
At a meeting held on July 27, 1999, the Board of Directors of the Company
unanimously approved the Merger Agreement, the Offer and the Merger and
determined that the terms of the Offer and the Merger are fair to and in the
best interests of the holders of Shares, and unanimously recommended that the
Company's stockholders accept the Offer and tender their Shares pursuant to the
Offer. The Merger Agreement, the Offer and the Merger were previously approved
by the Boards of Directors of Caradon plc, Parent and the Purchaser on July 26,
1999.
Later that night, Parent, the Purchaser and the Company executed and
delivered the Merger Agreement, and Parent, the Purchaser and the designated
stockholders executed and delivered the Stockholder Agreements. Prior to the
opening of trading on the Nasdaq National Market on Wednesday, July 28, 1999,
Parent and the Company jointly announced that the Merger Agreement had been
signed and that the Purchaser intended to commence the Offer. A separate press
release was issued by Caradon plc in the United Kingdom.
On August 3, 1999, the Purchaser commenced the Offer.
18
<PAGE> 21
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer and the Merger is to enable Parent to acquire
control of, and the entire equity interest in, the Company. The Offer, as the
first step in the acquisition of the Company, is intended to facilitate the
acquisition of all the Shares. Parent will cause the Merger to be consummated as
soon as practicable following the consummation of the Offer. The purpose of the
Merger is to acquire all Shares not purchased pursuant to the Offer or
otherwise. Following the Merger, the Company would become an indirect wholly
owned subsidiary of Parent.
It is expected that, initially following the Merger, the business and
operations of the Company and its subsidiaries will continue without substantial
change. Parent intends to conduct an extensive review of the Company and its
subsidiaries and their assets, corporate structure, operations, properties,
policies, management and personnel and to consider what, if any, changes would
be desirable in light of the circumstances then existing. Parent reserves the
right to take such actions and make such changes as it deems desirable. Such
changes could include changes in the Company's business, corporate structure,
capitalization, management or personnel.
Except as described above, neither Parent, the Purchaser nor Caradon plc
have any present plans or proposals that would relate to, or result in, any
extraordinary corporate transaction involving the Company, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, or any material change in the Company's business or corporate
structure or composition of its management or personnel.
The Merger Agreement provides that the directors of the Purchaser,
immediately prior to the Effective Time of the Merger, will be the initial
directors of the Company after the Merger. For the potential effects of the
Offer and the Merger on the listing of the Shares on the Nasdaq National Market
and their registration under the Exchange Act, see Section 7.
13. THE MERGER AGREEMENT AND THE STOCKHOLDER AGREEMENTS.
The following summary of certain provisions of the Merger Agreement and the
Stockholder Agreements among Parent, the Purchaser and certain stockholders of
the Company, copies of which are filed as Exhibits (c)(1), (c)(2) and (c)(3),
respectively, to the Schedule 14D-1, is qualified in its entirety by reference
to the texts of the Merger Agreement and the Stockholder Agreements. The Merger
Agreement and the Stockholder Agreements may be examined at the same places and
in the same manner as set forth with respect to the Company in Section 8.
THE MERGER AGREEMENT
As of July 28, 1999, Parent, the Purchaser and the Company entered into the
Merger Agreement, pursuant to which the Purchaser agreed to make the Offer. The
following description of the Merger Agreement does not purport to be complete
and is qualified by reference to the text of the Merger Agreement.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The obligation of the Purchaser to
accept for payment and pay for Shares tendered is subject to the Minimum
Condition, which is the valid tender and non-withdrawal prior to the expiration
of the Offer of at least a majority of the Shares then outstanding on a fully
diluted basis, and to the satisfaction of the conditions described in Annex A to
the Merger Agreement. The Merger Agreement provides that the Purchaser may not
amend or waive the Minimum Condition, decrease the Offer Price or change the
form of consideration payable in the Offer, decrease the number of Shares
sought, or otherwise amend any other condition of the Offer in any manner
adverse to the holders of the Shares without the prior written consent of the
Company; provided, that if on the initial scheduled Expiration Date of the
Offer, all conditions of the Offer shall not have been satisfied or waived,
Purchaser may, in its sole discretion, extend the Expiration Date. The Purchaser
shall, on the terms and subject to the prior satisfaction or waiver of the
conditions of the Offer and as promptly as practicable after the expiration of
the Offer, accept for payment Shares tendered; provided that if immediately
prior to the initial Expiration Date of the Offer (as it may be extended) the
number of Shares tendered and not withdrawn pursuant to the Offer is less than
90%
19
<PAGE> 22
of the outstanding Shares, the Purchaser may, in its sole discretion, extend the
Expiration Date of the Offer for a period not to exceed ten business days,
notwithstanding that all conditions to the Offer are satisfied as of such
Expiration Date.
Designation of Directors. The Merger Agreement provides that, promptly
after the Purchaser acquires any Shares pursuant to the Offer, and from time to
time thereafter as the Purchaser acquires Shares, Parent will be entitled to
designate such number of directors, rounded up to the next whole number, on the
Company's Board of Directors as is equal to the product of (i) the total number
of directors on the Board of Directors (giving effect to the directors
designated by Parent) multiplied by (ii) the percentage of outstanding Shares
then beneficially owned by the Purchaser. However, until the Effective Time, the
Board of Directors of the Company will continue to have at least one Independent
Director. If no Independent Directors remain on the Company's Board of
Directors, the other directors will designate one person to fill such vacancy
who meets the eligibility requirements for Independent Directors. The Company
has agreed either to increase (but not above 10 persons) the size of the Board
of Directors of the Company or obtain the resignation of such number of
directors as is necessary to enable the Purchaser's designees to be elected or
appointed to the Board. The Company's obligation to appoint Parent's designees
to the Board of Directors of the Company is subject to compliance with Section
14(f) of the Exchange Act and Rule 14f-1 issued thereunder. Following the
election of Parent's designees, the affirmative vote of a majority of the
Independent Directors will be required to amend or terminate the Merger
Agreement on behalf of the Company, exercise or waive any of the Company's
rights, benefits or remedies thereunder if such exercise or waiver materially
and adversely affects holders of Shares other than Parent or the Purchaser,
extend the time for the performance of the Purchaser's obligations thereunder or
take any other action by the Company under the Merger Agreement required to be
taken by the Company's Board of Directors, if such action materially and
adversely affects stockholders other than Parent or the Purchaser.
The Merger. The Merger Agreement provides that at the Effective Time the
Purchaser will be merged with and into the Company, and the Company will
continue as the Surviving Corporation. The Effective Time of the Merger will be
the time of filing with the Secretary of State of the State of Delaware of a
Certificate of Merger, or such later time as may be specified in the Certificate
of Merger. The parties expect to file the Certificate of Merger as soon as
practicable following the closing of the Merger, which will take place on the
second business day after the conditions to the parties' obligations to effect
the Merger have been satisfied or waived, unless another date is otherwise
agreed.
Each Share issued and outstanding immediately prior to the Effective Time
(other than Shares held (i) in the treasury of the Company or by Parent or by
any direct or indirect wholly owned subsidiary of Parent immediately before the
Effective Time, or (ii) by stockholders, if any, who are entitled to and who
properly exercise appraisal rights under the Delaware Law) will be converted
into the right to receive the Offer Price. Each share of common stock of the
Purchaser issued and outstanding immediately prior to the Effective Time will be
converted into one share of common stock of the Surviving Corporation.
The Certificate of Incorporation of the Company, as in effect immediately
before the Effective Time, will be the Certificate of Incorporation of the
Surviving Corporation and will be amended to read as set forth in Exhibit A to
the Merger Agreement. The Bylaws of the Purchaser will be the Bylaws of the
Surviving Corporation. The directors of the Purchaser immediately before the
Effective Time will be the initial directors of the Surviving Corporation, and
the officers of the Company immediately before the Effective Time will be the
initial officers of the Surviving Corporation.
Conditions to the Merger. The respective obligations of Parent and the
Purchaser, on the one hand, and the Company, on the other hand, to effect the
Merger are subject to the satisfaction on or prior to the Closing Date (as
defined in the Merger Agreement) of each of the following conditions:
(i) the Purchaser shall have made or caused to be made the Offer and
shall have purchased or caused to be purchased Shares pursuant to the
Offer, provided that such condition shall be deemed to have been satisfied
with respect to the obligation of Parent and the Purchaser to consummate
the Merger if the Purchaser fails to accept for payment or pay for Shares
pursuant to the Offer in violation of the terms of the Offer or the Merger
Agreement;
20
<PAGE> 23
(ii) the Merger Agreement shall have been approved and adopted by the
requisite vote of the holders of Shares, if required by the Delaware Law;
and
(iii) no statute, rule or regulation shall have been enacted or
promulgated, no final, nonappealable judgment, writ, decree, order or
injunction shall have been entered or enforced, and no other legally
binding, final and nonappealable action shall have been taken by any
domestic or foreign government, governmental, administrative or regulatory
authority or agency or by any court or tribunal of competent jurisdiction,
domestic or foreign, that has the effect of making illegal, restraining,
restricting or precluding consummation of the Merger.
Recommendation. The Company represents in the Merger Agreement that the
Board of Directors of the Company has (i) duly approved and adopted the Merger
Agreement and the transactions contemplated by the Merger Agreement, including
the Merger and the Offer (the "Transactions"), (ii) determined that the
Transactions are fair to and in the best interests of the stockholders of the
Company, and (iii) resolved to recommend that the Company's stockholders accept
the Offer and approve and adopt the Merger Agreement. The Company has agreed to
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
containing such recommendations and to mail such Schedule 14D-9 to the
stockholders of the Company at the time the Offer to Purchase and related
documents are first mailed to the stockholders.
Stock Options. At or immediately prior to the Effective Time, each
outstanding option to purchase Shares (the "Options") issued under the Company's
Stock Option Plan dated December 17, 1993, as amended, and any other stock-based
incentive plan or arrangement of the Company (collectively, the "Stock Plans")
will be canceled and, in consideration of such cancellation, the holders of such
Options will receive for each Share subject to such Options a cash payment
(subject to tax withholding) equal to the product of (i) the excess, if any, of
the Offer Price over the per Share exercise price of the applicable Option and
(ii) the number of Shares subject to that Option which have not already been
exercised. The Company will take all actions necessary to (i) cause the Stock
Plans to terminate as of the Effective Time, (ii) delete as of the Effective
Time the provision in any other benefit plan of the Company providing for the
issuance, transfer or grant of capital stock of the Company, and (iii) ensure
that following the Effective Time no holder of Options or any participant in any
Stock Plan or other Company benefit plan shall have any right thereunder to
acquire any capital stock of the Company or the Surviving Corporation.
Interim Operations; Covenants. Pursuant to the Merger Agreement, the
Company has agreed that, except (i) as expressly contemplated by the Merger
Agreement, in compliance with applicable laws, (ii) for the payment of remaining
amounts due to American Industrial Partners Management Company, Inc. pursuant to
a management agreement, or (iii) as agreed to in writing by Parent prior to the
time the designees of the Purchaser constitute a majority of the Board of
Directors of the Company (the "Appointment Date"), the business of the Company
will be conducted only in the ordinary and usual course consistent with past
practice and in compliance with applicable laws, and each of the Company and its
subsidiaries will use its reasonable best efforts to preserve and protect its
business organization, properties and assets intact and maintain its existing
relations with customers, suppliers, employees, creditors and business partners
to the end that its goodwill and business shall be unimpaired in any material
respect as of the Effective Time.
The Company has also agreed that it will not, directly or indirectly:
(i) issue, sell, transfer or pledge or agree to sell, transfer or
pledge any capital stock of the Company or any of its subsidiaries
beneficially owned by the Company, except upon the exercise of Options or
other rights to purchase Shares pursuant to the Stock Plans;
(ii) amend its Certificate of Incorporation or Bylaws or any similar
organizational documents of any subsidiary; or
(iii) split, combine or reclassify the outstanding Shares.
The Company has also agreed that neither it nor any of its subsidiaries
will:
(i) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to its capital stock (other
than as described in Section 6 of this Offer to Purchase);
21
<PAGE> 24
(ii) issue, sell, pledge, dispose of or encumber any additional shares
of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares
of capital stock of any class of the Company or its subsidiaries, other
than Shares reserved for issuance on the date of the Merger Agreement
pursuant to the exercise of Options outstanding on such date, or enter into
any agreement or understanding with respect to the voting of any of the
Company's capital stock or the capital stock of any subsidiary;
(iii) acquire, transfer, lease, license, sell, mortgage, pledge,
dispose of, or encumber any assets, other than the sale of inventory in the
ordinary and usual course of business and consistent with past practice, or
incur or modify any indebtedness, except for additional borrowings under
existing lines of credit in the ordinary and usual course of business and
consistent with past practice and in an amount not to exceed $100,000, or
other liability, except in the usual course of business and consistent with
past practice;
(iv) redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock;
(v) make or authorize any capital expenditure in excess of $100,000
individually or $400,000 in the aggregate;
(vi) make any change in the compensation payable or to become payable
by the Company to any of its (or a subsidiary's) officers, directors,
employees, agents or consultants (other than general increases in wages to
employees who are not officers or directors or affiliates in the ordinary
course consistent with past practice) or to persons providing management,
consulting or similar services;
(vii) enter into or amend any employment, severance, consulting,
termination or other agreement or employee benefit Plan (as defined below)
or other Plan or make loans to officers, directors, employees, affiliates,
agents or consultants;
(viii) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any
existing plan, agreement or arrangement to any officer, director, employee
or affiliate or pay or agree to pay or make any accrual or arrangement for
payment to any officers, directors, employees or affiliate of the Company
of any amount relating to unused vacation or sick days, except payments and
accruals made in the ordinary course consistent with past practice or as
required under the terms of any employment, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, stock appreciation
right or other stock-based incentive, severance, change-in-control,
termination or similar pay, hospitalization or other medical, disability,
life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or
arrangement, and each other employee benefit plan, program, agreement or
arrangement, sponsored, maintained or contributed to or required to be
contributed to by the Company or any of its subsidiaries for the benefit of
any current or former employee or director of the Company or any of its
subsidiaries (the "Plans");
(ix) adopt or pay, grant, issue, accelerate or accrue salary or other
payments or benefits pursuant to any pension, profit-sharing, bonus, extra
compensation, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right or other stock-based incentive, group
insurance, severance pay, retirement or other employee benefit plan,
agreement or arrangement, or any employment or consulting agreement with or
for the benefit of any director, officer, employee, agent or consultant
whether past or present except for payments and accruals made in the
ordinary course of business and consistent with past practice or as
required under the terms of the Plans;
(x) amend in any material respect any such existing Plan, agreement or
arrangement in a manner inconsistent with the foregoing;
(xi) modify, amend or terminate any of the Company Agreements (as
defined in the Merger Agreement), enter into any Company Agreement other
than in the ordinary course of business and consistent with past practice,
extend the term of or renew any Company Agreements, or waive, release or
assign any rights or claims, except for the waiver, release or assignment
of immaterial rights or claims in
22
<PAGE> 25
the ordinary course of business and consistent with past practice, or waive
or release any rights under any standstill, confidentiality or similar
agreements;
(xii) permit any insurance policy naming it as a beneficiary or a loss
payable payee to be canceled or terminated or the coverages thereunder to
be reduced or deductibles increased;
(xiii) incur or assume any long-term debt, or, except as provided in
the provision described in clause (iii) above, incur or assume any
short-term indebtedness or increase or modify the terms of any
indebtedness;
(xiv) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person;
(xv) make any loans, advances or capital contributions to, or
investments in, any other person, except the extension of customary trade
credit in the ordinary course of business and consistent with past
practice;
(xvi) enter into any material commitment or transaction (including,
but not limited to, any borrowing, capital expenditure or purchase, sale or
lease of assets or real estate);
(xvii) mortgage or pledge any of its assets of record or suffer to
exist any lien or encumbrance thereon;
(xviii) change any of the accounting methods used by it unless
required by generally accepted accounting principles and after consultation
with Parent;
(xix) make any tax election or change any tax election already made,
adopt any tax accounting method, change any tax accounting method unless
required by applicable law, enter into any closing agreement, settle any
tax claim or assessment or consent to any tax claim or assessment or any
waiver of the statute of limitations for any such claim or assessment;
(xx) revalue any of its assets;
(xxi) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of any such claims, liabilities
or obligations, in the ordinary course of business and consistent with past
practice, or claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the Recent Balance Sheet (as defined in the
Merger Agreement), or the notes thereto;
(xxii) settle or compromise any suit, action or claim relating to the
Transactions;
(xxiii) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than the
Merger);
(xxiv) acquire (by merger or acquisition of stock or assets) any
corporation, partnership or other entity, or division thereof, or equity
interest therein;
(xxv) take, or agree to take, any action that would or is reasonably
likely to result in any of the conditions to the Merger described above
under "-- The Merger" or any of the conditions to the Offer described in
Section 15 of this Offer to Purchase not being satisfied, or would make any
representation or warranty of the Company contained in the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective
Time, or that would materially impair the ability of the Company to
consummate the Merger in accordance with the terms of the Merger Agreement
or materially delay such consummation; or
(xxvi) enter into an agreement, contract, commitment or arrangement to
do any of the foregoing, or authorize, recommend, propose or announce an
intention to do any of the foregoing.
Company Stockholder Meeting. If required by applicable law, the Company has
agreed to (i) hold a special meeting of its stockholders as soon as practicable
following acceptance for payment of Shares pursuant
23
<PAGE> 26
to the Offer for the purpose of approving the Merger and adopting the Merger
Agreement, (ii) prepare and file with the SEC a preliminary proxy statement or
information statement relating to the Merger Agreement, and (iii) use its best
efforts to obtain the necessary approvals of the Merger and the Merger Agreement
by its stockholders. Parent and the Purchaser have agreed to vote all Shares
owned by them in favor of approval of the Merger Agreement. However, if Parent
or the Purchaser acquire at least 90% of the outstanding Shares, the parties
will, at the request of Parent, cause the Merger to become effective as soon as
practicable after such acquisition without a meeting of stockholders of the
Company in accordance with the Delaware Law.
No Solicitation. In the Merger Agreement, the Company agreed to cease and
cause to be terminated any existing activities, discussions or negotiations, if
any, with any parties conducted prior to the date of the Merger Agreement with
respect to any Takeover Proposal. "Takeover Proposal" means any tender or
exchange offer involving the Company, any proposal for a merger, consolidation
or other business combination involving the Company, any proposal or offer to
acquire in any manner greater than a 20% equity interest in, or greater than a
20% portion of the business or assets of, the Company, any proposal or offer
with respect to any recapitalization or restructuring with respect to the
Company or any proposal or offer with respect to any other transaction similar
to any of the foregoing with respect to the Company, other than pursuant to the
Transactions.
In addition, the Company will not, will cause its officers and directors
not to, and will use its reasonable best efforts to ensure that its employees
(other than its officers or directors), investment bankers, attorneys,
accountants and other agents and representatives do not, directly or indirectly:
(i) initiate, solicit or encourage, or take any action to facilitate the making
of, any offer or proposal which constitutes or is reasonably likely to lead to
any Takeover Proposal, (ii) enter into any agreement with respect to any
Takeover Proposal, or (iii) engage in any negotiations or discussions with, or
provide any information or data to, any person (other than Parent or any of its
affiliates or representatives) relating to any Takeover Proposal. However, the
Company or its Board of Directors is not prohibited from (i) taking and
disclosing to the Company's stockholders a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act or (ii) making such other disclosure to the Company's
stockholders as the Board of Directors of the Company determines in good faith
after consulting with its counsel and determining that the failure to make such
disclosure would constitute a breach of the fiduciary duties of the Board of
Directors of the Company under applicable law.
Notwithstanding the foregoing, prior to the acceptance of Shares pursuant
to the Offer, the Company may, in response to an unsolicited written proposal
with respect to a Takeover Proposal from a financially capable third party that
contains no financing condition, furnish information to, and negotiate, explore
or otherwise engage in substantive discussions with, such third party, in each
case only if (i) the Board of Directors of the Company determines in good faith
by a majority vote, after consultation with its financial advisors and after
receipt of advice of the outside legal counsel of the Company, that failing to
take such action would constitute a breach of the fiduciary duties of the Board,
and (ii) the Company obtains a confidentiality and standstill agreement no less
favorable to the Company than the Confidentiality Agreement entered into with
Parent. The Company agreed to promptly advise Parent in writing of the receipt
of any inquiries or proposals relating to a Takeover Proposal, indicating the
name of the person making such inquiry or proposal, the terms and conditions
thereof and any actions taken pursuant to the foregoing sentence. The Company
will also promptly furnish to Parent a copy of any written inquiry or proposal
relating to a Takeover Proposal.
Indemnification and Insurance. Pursuant to the Merger Agreement, in the
event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, including any such
claim, action, suit, proceeding or investigation by or in the right of the
Company or any of its subsidiaries, in which any of the present or former
officers or directors (the "Indemnified Parties") of the Company is, or is
threatened to be, made a party by reason of the fact that he is or was, prior to
the Effective Time, a director, officer, employee or agent of the Company or any
of its subsidiaries or is or was, prior to the Effective Time, serving as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise at the request of the Company or any of its
subsidiaries, whether such claim arises before or after the Effective Time, the
Company and, after the Effective Time, the Surviving Corporation, jointly and
severally, shall indemnify and hold harmless, as and to the same extent and on
the same terms and conditions
24
<PAGE> 27
provided for in the Company's Certificate of Incorporation, Bylaws and certain
indemnification agreements entered into between the Company and the members of
the Special Committee (as defined in the Merger Agreement) in effect on the date
of the Merger Agreement (to the extent consistent with applicable laws) each
such Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such claim, action, suit,
proceeding or investigation. After the Effective Time, Parent shall guarantee
the performance of the Surviving Corporation with respect to its obligations set
forth in the first sentence of this paragraph. For a period of six years after
the Effective Time, the Surviving Corporation will keep in effect in its
Certificate of Incorporation or Bylaws a provision providing for the
indemnification of the Indemnified Parties to the extent required under the
obligation described in the first sentence of this paragraph.
The Merger Agreement also provides that either Parent or the Surviving
Corporation will maintain the Company's existing officers' and directors'
liability insurance ("D&O Insurance") for a period of not less than six years
after the Effective Time; provided that Parent may substitute therefor policies
of substantially equivalent coverage and amounts containing terms no less
favorable to such former directors or officers; provided, further, if the
existing D&O Insurance expires, is terminated or canceled during such period,
Parent or the Surviving Corporation will use all reasonable efforts to obtain
substantially similar D&O Insurance; provided, further, Parent shall not be
required to pay aggregate premiums for such insurance in excess of 200% of the
average of the aggregate premiums paid by the Company in 1997, 1998 and 1999
(through the date of the Merger Agreement) on an annualized basis for such
purpose (the "Average Premium"); and provided, further, that if Parent or the
Surviving Corporation is unable to obtain the amount of insurance required by
the provision described in this sentence for such aggregate premium, Parent or
the Surviving Corporation shall obtain as much insurance as can be obtained for
an annual premium not in excess of 200% of the Average Premium.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto, including representations
by the Company as to, among other things, corporate existence and good standing,
organization, capitalization, corporate authorization, financial statements,
public filings, conduct of business, employee benefit plans, intellectual
property, employment matters, compliance with applicable laws, tax matters,
litigation, environmental matters, material contracts, customers and suppliers,
brokers' fees, real property and assets, vote required to approve the Merger
Agreement, undisclosed liabilities, information in the Proxy Statement and the
absence of any material adverse effect on the Company since January 1, 1999. In
addition, Parent and the Purchaser represented as to, among other things,
corporate existence and good standing, corporate authorization and consents and
approvals. None of the parties' respective representations and warranties will
survive after the Effective Time.
Access and Confidentiality. The Company has agreed to give Parent and its
authorized representatives access, during normal business hours, to the
properties, books, contracts, commitments, records and personnel of the Company
and its subsidiaries. Parent has agreed to hold in confidence all information
received by it pursuant to the terms and conditions of the Confidentiality
Agreement filed as Exhibit(c)(4) to the Schedule 14D-1 and incorporated herein
by reference.
Termination. The Merger Agreement may be terminated and the Transactions
may be abandoned at any time before the Effective Time, whether before or after
stockholder approval:
(i) By mutual written consent of Parent and the Board of Directors of
the Company;
(ii) By Parent if the Offer shall have expired or been terminated
without any Shares being purchased thereunder by the Purchaser as a result
of the failure to meet the conditions set forth in Annex A of the Merger
Agreement;
(iii) By either Parent or the Company if any court, arbitral tribunal,
administrative agency or commission or other governmental or other
regulatory authority or agency shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties to the
Merger Agreement shall use their reasonable best efforts to lift), in each
case permanently restraining, enjoining or otherwise prohibiting the
Transactions;
25
<PAGE> 28
(iv) By Parent if, without any material breach by Parent or the
Purchaser of its obligations under the Merger Agreement, the purchase of
Shares pursuant to the Offer shall not have occurred on or before October
31, 1999;
(v) By the Company if, without any material breach by the Company of
its obligations under the Merger Agreement, the purchase of Shares pursuant
to the Offer shall not have occurred on or before October 31, 1999;
(vi) By the Company (a) if, prior to the purchase of Shares pursuant
to the Offer, there shall be a material breach of any of Parent or the
Purchaser's representations, warranties or covenants in the Merger
Agreement, which breach cannot be or has not been cured within ten days of
the receipt of written notice thereof or (b) to allow the Company to enter
into a definitive agreement to consummate a Superior Proposal (as defined
below); provided, that it has complied with all provisions thereof; and
provided further, that it furnishes a copy of the Superior Proposal,
containing all of the terms and conditions thereof, to Parent at least two
calendar days prior to terminating this Agreement pursuant to this clause;
(vii) By Parent if, prior to the purchase of Shares pursuant to the
Offer, the Company shall have breached in any material respect (without
reference to any materiality qualification contained therein) any
representation, warranty or covenant or other agreement contained in the
Merger Agreement, which breach (a) would give rise to the failure of a
condition set forth in paragraph (f) or (g) of Annex A of the Merger
Agreement (which pertain to the representations and warranties of the
Company set forth in the Merger Agreement being true and correct and the
Company's performance of any obligation, or compliance with any agreement
or covenant to be performed or complied with by it, under the Merger
Agreement); and (b) cannot be or has not been cured within ten days of the
receipt of written notice thereof;
(viii) By Parent if (a) the Board of Directors of the Company shall
withdraw, modify, or change its recommendation or approval in respect of
the Merger Agreement or the Offer in a manner adverse to the Purchaser or
(b) the Board of Directors of the Company shall have recommended any
proposal other than by Parent or the Purchaser in respect of a Takeover
Proposal; or
(ix) By Parent if (a) the Company has exercised a right regarding a
Takeover Proposal described under the second paragraph of "-- No
Solicitation" above and, directly or indirectly (including through its
representatives), shall continue discussions or negotiations with a third
party for more than 20 business days after the date of receipt of such
Takeover Proposal or (b) a Takeover Proposal shall have been publicly
disclosed, commenced, proposed or communicated to the Company other than by
Parent or the Purchaser, and the Board of Directors of the Company shall
have not affirmatively rejected such Takeover Proposal within 20 business
days after the earlier of receipt or the public disclosure of such Takeover
Proposal.
A "Superior Proposal" is a bona fide written Takeover Proposal submitted by
any person other than Parent or the Purchaser on an unsolicited basis that the
Board of Directors of the Company determines in good faith, based on the advice
of its financial advisor, represents a transaction that is more financially
favorable to the stockholders of the Company than the Offer and the Merger.
Termination Fee and Expenses. If the Merger Agreement is terminated as
described above, written notice shall be given forthwith to the other party or
parties specifying the provision of the Merger Agreement pursuant to which such
termination is made, the Merger Agreement will become null and void, and there
shall be no liability on the part of Parent, the Purchaser or the Company,
except (i) as set forth in Section 6.5 of the Merger Agreement (pertaining to
confidentiality), the provisions described below in this paragraph, and Section
9.3 of the Merger Agreement (pertaining to expenses) and (ii) nothing in the
Merger Agreement shall relieve any party from liability for any material breach
of the Merger Agreement. If (i) the Company terminates the Merger Agreement
pursuant to the provision described in clause (vi)(b) of the preceding
paragraph, (ii) Parent terminates the Merger Agreement pursuant to the provision
described in clause (viii) of the preceding paragraph, or (iii) (A) Parent
terminates the Merger Agreement pursuant to the
26
<PAGE> 29
provision described in clause (ii) (because the Minimum Condition has not been
satisfied), (vii) (and the breach giving rise to such right to terminate shall
have been willful or in bad faith) or (ix), each of the preceding paragraph, and
(B) in each case, the Company has consummated or entered into a definitive
agreement with respect to a Takeover Proposal within twelve months following the
date of such termination, then the Company shall pay to Parent, (A) in the case
of clause (i) or (ii) above, at the time of such termination, and, in the case
of clause (iii) above, upon the Company's consummation of or entry into a
definitive agreement regarding such Takeover Proposal, an amount equal to
$6,500,000 (which, in the case of a termination pursuant to the provision
described in clause (vii) of the preceding paragraph, shall constitute
liquidated damages with respect to any breach giving rise to a right to
terminate under the Merger Agreement) plus an amount (not to exceed $1,500,000)
equal to Parent's and the Purchaser's actual out-of-pocket expenses attributable
to the Offer, the Merger, the Merger Agreement and the consummation of the
Transactions.
Fees and Expenses. Except as set forth in the provision described in the
preceding paragraph, fees, costs and expenses incurred in connection with the
Merger Agreement and the Transactions shall be paid by the party incurring such
fees, costs and expenses.
Amendments and Modifications. Subject to applicable law, the Merger
Agreement may be amended, modified or supplemented by a written agreement of
Parent, the Purchaser and the Company, provided, that after the approval of the
Merger Agreement by the stockholders of the Company, no such amendment,
modification or supplement shall reduce or change the consideration to be
received by the Company's stockholders in the Merger.
THE STOCKHOLDER AGREEMENTS
As a condition to Parent's willingness to enter into the Merger Agreement,
Parent and the Purchaser entered into Stockholder Agreements dated as of July
28, 1999 with each of AIP, which holds 4,239,470 Shares, and certain directors
and executive officers of the Company, who collectively hold 226,800 Shares.
Pursuant to its Stockholder Agreement, AIP has agreed, among other things, to
tender the Shares held by it in the Offer and granted the Purchaser an
irrevocable proxy to vote such Shares in connection with any meeting of the
stockholders of the Company in favor of the Merger and against any action that
would interfere with the Merger, including any proposal by a third party to
acquire the Company. Pursuant to his respective Stockholder Agreement, each
director and executive officer of the Company has agreed, among other things, to
tender the Shares held by him in the Offer. The foregoing obligations of AIP and
the directors and executive officers terminate upon the termination of the
Merger Agreement, including pursuant to a fiduciary out exercised by the Board
of Directors of the Company. The foregoing description of the Stockholder
Agreements does not purport to be complete and is qualified by reference to the
text of the Stockholder Agreements.
APPRAISAL RIGHTS
No appraisal rights are available in connection with the Offer. However, if
the Merger is consummated, stockholders of the Company will have certain rights
under the Delaware Law to dissent and demand appraisal of, and to receive
payment in cash for the fair value of, their Shares. Such rights to dissent, if
the stockholder does not vote in favor of the Merger and complies with certain
statutory procedures, could lead to a judicial determination of the fair value
of the Shares (excluding any element of value arising from the accomplishment or
expectation of the Merger) required to be paid in cash to such dissenting
holders for their Shares. Such value could be less than, equal to, or more than
the Offer Price. In addition, such dissenting stockholders may be entitled to
receive payment of interest from the date of consummation of the Merger on the
amount determined to be the fair value of their Shares. In determining the fair
value of the Shares, a Delaware court would be required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market value of the Shares,
including, among other things, asset values and earning capacity.
27
<PAGE> 30
If any holder of Shares who demands appraisal under the Delaware Law fails
to perfect, or effectively withdraws or loses his right to appraisal, as
provided in the Delaware Law, the Shares of such stockholder will be converted
into the Offer Price in accordance with the Merger Agreement.
The foregoing discussion is not a complete statement of law pertaining to
appraisal rights under the Delaware Law and is qualified in its entirety by the
full text of Section 262 of the Delaware Law.
RULE 13E-3
The SEC has adopted Rule 13e-3 under the Exchange Act, which is applicable
to certain "going private" transactions and that may under certain circumstances
be applicable to the Merger following the purchase of Shares pursuant to the
Offer in which the Purchaser seeks to acquire any remaining Shares. Rule 13e-3
should not be applicable to the Merger if the Merger is consummated within one
year after the expiration or termination of the Offer and the price paid in the
Merger is not less than the price per Share paid pursuant to the Offer. However,
in the event that the Purchaser is deemed to have acquired control of the
Company pursuant to the Offer and if the Merger is consummated more than one
year after completion of the Offer or an alternative acquisition transaction is
effected whereby stockholders of the Company receive consideration less than
that paid pursuant to the Offer, in either case at a time when the Shares are
still registered under the Exchange Act, the Purchaser may be required to comply
with Rule 13e-3 under the Exchange Act. If applicable, Rule 13e-3 would require,
among other things, that certain financial information concerning the Company
and certain information relating to the fairness of the Merger or such
alternative transaction and the consideration offered to minority stockholders
in the Merger or such alternative transaction, be filed with the SEC and
disclosed to stockholders prior to consummation of the Merger or such
alternative transaction. The purchase of a substantial number of Shares pursuant
to the Offer may result in the Company being able to terminate its Exchange Act
registration. See Section 7. If such registration were terminated, Rule 13e-3
would be inapplicable to any such future Merger or such alternative transaction.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, from the date of the Merger Agreement
until the time Parent's designees shall constitute a majority of the Board of
Directors of the Company (i) declare, set aside pay or make provision for any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock (other than as described in Section 6 of this Offer to
Purchase), (ii) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire (or stock
appreciation rights with respect to), any shares of capital stock of any class
of the Company or its subsidiaries, other than Shares reserved for issuance on
the date of the Merger Agreement pursuant to the exercise of Options outstanding
on the date of the Merger Agreement, (iii) enter into any agreement or
understanding with respect to the voting of any of its capital stock or the
capital stock of any subsidiary or (iv) redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock.
15. CERTAIN CONDITIONS TO THE PURCHASER'S OBLIGATIONS.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-l(c) under the Exchange Act (relating to the Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
terminate or amend the Offer as to any Shares not then paid for, if any
applicable waiting period under the HSR Act has not expired or been terminated,
the Minimum Condition has not been satisfied, or at any time on or after the
date of the Merger Agreement and before the
28
<PAGE> 31
time of acceptance for payment for any such Shares, any of the following events
shall have occurred and be continuing:
(i) there shall be threatened (in writing) or pending any suit, action
or proceeding by any court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency
against the Purchaser, Parent, the Company or any subsidiary of the Company
(a) challenging the acquisition by Parent or the Purchaser of any Shares
under the Offer, seeking to restrain or prohibit the making or consummation
of the Offer or the Merger or the performance of any of the other
transactions contemplated by the Merger Agreement or the Stockholder
Agreements, (b) seeking to impose material limitations on the ability of
the Purchaser, or render the Purchaser unable, to accept for payment, pay
for or purchase some or all of the Shares pursuant to the Offer and the
Merger, (c) seeking to impose material limitations on the ability of the
Purchaser or Parent effectively to acquire, hold or exercise full rights of
ownership of the Shares, including, without limitation, the right to vote
the Shares purchased by it on all matters properly presented to the
Company's stockholders, (d) seeking to prohibit or restrict the ownership
or operation by Parent or the Purchaser (or any of their respective
affiliates or subsidiaries) of any portion of its or the Company's business
or assets which is material to the business of the Company and its
subsidiaries or of Parent and its subsidiaries or compel Parent or the
Purchaser (or any of their respective affiliates or subsidiaries) to
dispose of or hold separate any portion of its or the Company's business or
assets which is material to the business of the Company and its
subsidiaries or of Parent and its subsidiaries; (e) seeking to impose any
material limitations on the ability of Parent or the Purchaser or any of
their respective affiliates or subsidiaries effectively to control in any
material respect the business and operations of the Company and its
subsidiaries, or (f) which otherwise is reasonably likely to have a Company
Material Adverse Effect (as defined in the Merger Agreement);
(ii) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of any court,
arbitral tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, to the Offer or the
Merger, or any other action shall be taken by any court, arbitral tribunal,
administrative agency or commission or other governmental or other
regulatory authority or agency, other than the application to the Offer or
the Merger of applicable waiting periods under the HSR Act, that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (a) through (f) of paragraph (i) above;
(iii) there shall have occurred (a) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (b) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions, (c) a change in
general financial, bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United
States to extend credit or syndicate loans, (d) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange, over-the-counter market or The Nasdaq Stock Market for
a period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges
not related to market conditions), or (e) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(iv) since March 31, 1999, there shall have occurred any change that
constitutes a Company Material Adverse Effect (or there shall have been any
development that is reasonably likely to result in a Company Material
Adverse Effect);
(v) (a) the Board of Directors or any committee thereof shall have
withdrawn or modified in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Takeover Proposal or (b) the
Company shall have entered into any agreement in principle or definitive
agreement with respect to any Takeover
29
<PAGE> 32
Proposal or shall have exercised its rights in accordance with Section
5.1(b) of the Merger Agreement (pertaining to actions taken to fulfill the
directors' fiduciary duties) with respect to a Takeover Proposal;
(vi) any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct (without
reference to any materiality qualification contained therein) in each case
(a) as of the date referred to in any representation or warranty which
addresses matters as of a particular date, or (b) as to all other
representations and warranties, as of the date of the Merger Agreement and
as of the scheduled expiration of the Offer except for any breach that
individually or in the aggregate, together with all other breaches, could
not reasonably be expected to have a Company Material Adverse Effect;
(vii) the Company shall have failed to perform in any material respect
any obligation, or to comply with any agreement or covenant to be performed
or complied with by it, under the Merger Agreement; or
(viii) the Merger Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser, may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such condition (including any action or inaction by
Parent or the Purchaser) and may be waived by Parent or the Purchaser in whole
or in part at any time and from time to time in the sole discretion of Parent or
the Purchaser, subject in each case to the terms of the Merger Agreement. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not already accepted for payment shall be returned forthwith by
the Depositary to the tendering stockholders.
16. CERTAIN LEGAL MATTERS.
Based on a review of publicly available filings made by the Company with
the SEC and other publicly available information concerning the Company, neither
the Purchaser nor Parent is aware of any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action,
except as otherwise described in this Section 16, by any governmental,
administrative or regulatory agency or authority, domestic, foreign or
supernational, that would be required for the acquisition or ownership of Shares
by the Purchaser as contemplated herein. Should any such approval or other
action be required, the Purchaser and Parent currently contemplate that such
approval or other action will be sought, except as described below under "State
Takeover Laws." While, except as otherwise expressly described in this Section
16, the Purchaser does not presently intend to delay the acceptance for payment
of or payment for Shares tendered pursuant to the Offer pending the outcome of
any such matter, there can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that failure to obtain any such approval or other action would not
result in consequences adverse to the Company's business or that certain parts
of the Company's business would not have to be disposed of if such approvals
were not obtained or such other actions were not taken in order to obtain any
such approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could, subject to the
terms and conditions of the Merger Agreement, decline to accept for payment or
pay for any Shares tendered. See Section 15 for a discussion of certain
conditions to the Offer.
State Takeover Laws. The Company is incorporated under the laws of
Delaware. No Delaware takeover statute or similar statute or regulation,
including, without limitation, Section 203 of the Delaware Law (as to which the
Company has taken all action to render inapplicable to the transactions
contemplated by the Merger Agreement), imposes restrictions materially and
adversely affecting (or materially delaying) the consummation of the Offer or
the Merger or would, as a result of the Offer, the Merger, the transactions
contemplated by the Merger Agreement or the acquisition of securities of the
Company by Parent or the Purchaser (i) restrict or impair the ability of Parent
to vote, or otherwise to exercise the rights of a stockholder with respect to,
30
<PAGE> 33
securities of the Company or the Surviving Corporation that may be acquired or
controlled by Parent or (ii) entitle any stockholder to acquire securities of
the Company or the Surviving Corporation on a basis not available to Parent.
A number of states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
stockholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics
Corp. of America, however, the Supreme Court of the United States held that a
state may, as a matter of corporate law, and, in particular, those laws
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only to corporations incorporated in the state of enactment with a substantial
number of stockholders residing in that state. Subsequently, a number of federal
courts ruled that various state takeover statutes were unconstitutional insofar
as they apply to corporations incorporated outside the state of enactment.
Based on information supplied by the Company and its own review, Caradon
plc, Parent and the Purchaser do not believe that any other state takeover
statutes purport to apply to the Offer or the Merger, with the possible
exception of the Ohio tender offer statute (as to which the Purchaser intends to
make the required filings). Except as described in the previous sentence,
neither Caradon plc, Parent nor the Purchaser has currently complied with any
state takeover statute or regulation. The Purchaser reserves the right to
challenge the applicability or validity of any state law purportedly applicable
to the Offer or the Merger and nothing in this Offer to Purchase or any action
taken in connection with the Offer or the Merger is intended as a waiver of such
right. If it is asserted that any state takeover statute is applicable to the
Offer or the Merger and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, the Purchaser
might be required to file certain information with, or to receive approvals
from, the relevant state authorities, and the Purchaser might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer, or be
delayed in consummating the Offer or the Merger. In such case, the Purchaser may
not be obligated to accept for payment or pay for any Shares tendered pursuant
to the Offer. See Section 15.
Antitrust Laws. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may be consummated following
the expiration of a 15-day waiting period following the filing by Parent of a
Premerger Notification and Report Form with respect to the Offer, unless Parent
receives a request for additional information or documentary material from the
Department of Justice, Antitrust Division (the "Antitrust Division") or the
Federal Trade Commission ("FTC") or unless early termination of the waiting
period is granted. Parent expects to make such a filing as soon as practicable
following the date of this Offer to Purchase. If, within the initial 15-day
waiting period, either the Antitrust Division or the FTC requests additional
information or documentary material concerning the Offer, then the waiting
period will be extended through the tenth day after the date of substantial
compliance by all parties receiving such requests. Complying with a request for
additional information or documentary material can take a significant amount of
time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger, or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or Parent or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under certain circumstances.
There can be no assurance that a challenge to the Offer, the consummation of the
Merger or the purchase of the Shares on antitrust grounds will not be made, or,
if such a challenge is made, of the result thereof.
31
<PAGE> 34
If any applicable waiting period under the HSR Act applicable to the Offer
has not expired or been terminated prior to the Expiration Date, the Purchaser
will not be obligated to proceed with the Offer or the purchase of any Shares
not already purchased pursuant to the Offer. See Section 15.
At any time before or after the Purchaser's purchase of Shares pursuant to
the Offer, an antitrust enforcement agency in jurisdictions other than the
United States could take such action under the applicable antitrust laws, if
any, as it deems necessary or desirable in the public interest. Private parties
may also be able to bring legal action under such antitrust laws under certain
circumstances. There can be no assurance that a challenge to the Offer on such
antitrust grounds will not be made or, if such a challenge is made, of the
results thereof.
Exon-Florio. Under Section 721 of Title VII of the United States Defense
Production Act of 1950, as amended by Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988 ("Exon-Florio"), the President of the United States
is authorized to prohibit or suspend acquisitions, mergers or takeovers by
foreign persons of persons engaged in interstate commerce in the United States
if the President determines, after investigation, that such foreign persons in
exercising control of such acquired persons might take action that threatens to
impair the national security of the United States and that other provisions of
existing law do not provide adequate authority to protect national security.
Pursuant to Exon-Florio, notice of an acquisition by a foreign person may be
made to the Committee on Foreign Investment in the United States ("CFIUS"),
which is comprised of representatives of the Departments of the Treasury, State,
Commerce, Defense and Justice, the Office of Management and Budget, the United
States Trade Representative's Office and the Council of Economic Advisors and
which has been selected by the President to administer Exon-Florio, either
voluntarily by the parties to such proposed acquisition, merger or takeover or
by any member of CFIUS.
A determination that an investigation is called for must be made within 30
days after notification of a proposed acquisition, merger or takeover is first
filed with CFIUS. Any such investigation must be completed within 45 days of
such determination. Any decision by the President to take action must be
announced within 15 days of the completion of the investigation. Although
Exon-Florio does not require the filing of a notification, nor does it prohibit
the consummation of an acquisition, merger or takeover if notification is not
made, such an acquisition, merger or takeover thereafter remains indefinitely
subject to divestment should the President subsequently determine that the
national security of the United States has been threatened or impaired. Caradon
plc, Parent and the Purchaser do not believe that the Offer or the Merger
threatens to impair the national security of the United States and do not intend
to notify CFIUS of the proposed transaction.
17. FEES AND EXPENSES.
KPMG Corporate Finance has been retained as a financial advisor to Parent
and will be paid an aggregate fee of between $1.8 million and $1.9 million if
the acquisition by Parent of the Company is completed or a time and effort fee
of between $30,000 and $40,000 if the acquisition is not completed. KPMG will
also be reimbursed for its out-of-pocket expenses (including legal fees) and
will be indemnified in connection with certain liabilities in connection with
its engagement.
Parent has retained D. F. King & Co., Inc. as Information Agent and
ChaseMellon Shareholder Services, L.L.C. as Depositary in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Depositary will also be indemnified by
Parent against certain liabilities in connection with the Offer.
Neither Caradon plc, the Purchaser nor Parent, nor any officer, director,
stockholder, agent or other representative of the Purchaser or Parent, will pay
any fees or commissions to any broker, dealer or other person (other than the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies and other nominees will,
upon request, be reimbursed by the Purchaser for customary mailing and handling
expenses incurred by them in forwarding materials to their customers.
32
<PAGE> 35
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF CARADON PLC, PARENT OR THE PURCHASER OTHER THAN AS
CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF ANY
SUCH INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY CARADON PLC, PARENT OR THE PURCHASER.
Caradon plc, Parent and the Purchaser have filed with the SEC the Schedule
14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3 issued
thereunder, furnishing certain information with respect to the Offer. The
Schedule 14D-1 and any amendments thereto, including exhibits, may be examined
at the same places and in the same manner as set forth with respect to the
Company in Section 8.
E ACQCO INC.
August 3, 1999
33
<PAGE> 36
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF CARADON PLC, PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF CARADON PLC. Set forth below are the
name, current business address, present principal occupation or employment and
employment history (covering a period of not less than five years) of each
director and executive officer of Caradon plc. Unless otherwise indicated, each
such person's business address is Caradon plc, 24 Queens Road, Weybridge, Surrey
KT139UX, United Kingdom. All persons listed below are citizens of the United
Kingdom except for Gerald M. Murphy, who is a citizen of Ireland.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- -------------------------------------------------------
<S> <C>
Jurgen Hintz (age 57).................. Mr. Hintz is a director and Group Chief Executive of
Caradon plc and has held these positions since November
1997. He has also been a director of Parent since
September 28, 1998, and the Chairman and President of
Parent since April 4, 1998. From October 1995 to November
1997, he was a private investor. From September 1991 to
October 1995, he was the President and Chief Executive
Officer of CarnaudMetalbox, Le Colisee 1, rue Fructidor,
75830 Paris Cedex 17, France (manufacturer of specialty
packaging).
Martin Clark (age 54).................. Mr. Clark is a director of Caradon plc, and has held that
position since October 1997. Since October 1997, he has
been Group Finance Director for Caradon plc. From March 1,
1996 to September 30, 1997, he was the Finance Director
for Associated British Foods plc, Weston Centre, Bowater
House, Knightsbridge, London SW1 7LQ United Kingdom (food
manufacturer). From 1985 to March 1996, he was the Finance
Director of Northern Foods plc, Beverly House, St.
Stephens Square, Hull, East Yorkshire, United Kingdom
(food manufacturer).
Charles L. Korbell, Jr (age 49)........ Mr. Korbell is a director of Caradon plc and has held that
position since March 1997. Since August 24, 1995, he has
been a director, as well as President and Chief Executive
Officer, of Clarke American Checks, Inc., 10931 Laureate
Drive, San Antonio, TX 78249 (supplier of checks and other
financial products, and an indirect wholly owned
subsidiary of Parent). Since June 1, 1994, he has been a
director as well as President and Chief Executive Officer
of Specialty Printing Group, Inc., 10931 Laureate Drive,
San Antonio, TX 78249 (check printing company and an
indirect wholly owned subsidiary of Parent).
Gerald M. Murphy (age 43).............. Mr. Murphy is a director of Caradon plc and has held that
position since September 1997. Since June 1995, he has
been the Chief Executive Officer of NFC plc. 66 Chiltern
St., London W1M 2LT, United Kingdom (international
logistics and moving services company). From December 1991
to June 1995, Mr. Murphy was the Chief Executive Officer
of Greencore Group plc, St. Stephens Green House, Dublin 2
(food manufacturer).
Sir Geoffrey Whalen (age 63)........... Sir Geoffrey is a director of Caradon plc and has held
that position since January 1996. From 1981 to 1994, Sir
Geoffrey was the Managing Director of Peugot Talbolt Motor
Company plc, Coventry, England (car manufacturer). He
retired in 1994.
</TABLE>
34
<PAGE> 37
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS
---- -------------------------------------------------------
<S> <C>
Sir Graham Hearne (age 61)............. Sir Graham is the Chairman of Caradon plc and has held
that position since July 1999. Since 1994, he has been the
Chairman and Chief Executive Officer of Enterprise Oil
plc, Grand Buildings, Trafalgar Square, London WC2N 5EJ
(oil and gas production company).
Alison R. Attfield (age 40)............ Ms. Attfield is the Treasurer and Director of Tax &
Treasury of Caradon plc and has held that position since
February 1, 1999. She has also been the Treasurer of
Parent since March 2, 1999. From November 1, 1996 to
February 1, 1999, Ms. Attfield was the Group Treasurer of
Hardy Oil & Gas plc., 10 Great George St., London SW1P
3AE, United Kingdom (producer and processor of natural
gas). From July 31, 1996 to October 31, 1996, she was the
International Treasurer for CarnaudMetalbox, Le Colisee 1,
rue Fructidor, 75830 Paris Cedex 17, France (specialty
packaging manufacturer). From June 1994 to July 31, 1996,
she was the Regional Treasurer of CarnaudMetalbox
Asia-Pacific (specialty packaging manufacturer).
Karen Richardson (age 40).............. Ms. Richardson is the Group Company Secretary of Caradon
plc and has held that position since January 1, 1994.
</TABLE>
INTERMEDIATE COMPANIES. Caradon NA Holdings Limited, a limited company
organized under the laws of England, is a wholly owned subsidiary of Caradon
plc. Caradon USA Holdings Limited, a limited company organized under the laws of
England, is a wholly owned subsidiary of Caradon NA Holdings Limited. The
business address of both of these companies is 24 Queens Road, Weybridge, Surrey
KT139UX, United Kingdom. The outstanding voting shares of Parent are wholly
owned by Caradon USA Holdings Limited, and Parent's outstanding non-voting
shares are wholly owned by Caradon plc.
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth below are the name,
current business address, citizenship, present principal occupation or
employment and employment history (covering a period of not less than five
years) of each director and executive officer of Parent. Unless otherwise
indicated for each person identified below, all information concerning the
citizenship, current business address, present principal occupation or
employment and five year employment history for such person is the same as the
information given above. Unless otherwise indicated, each such person's business
address is Caradon Inc., 2 Corporate Drive, Office 210, Trumbull, Connecticut
06611. All persons listed below are citizens of the United Kingdom
35
<PAGE> 38
except for Pat M. Simmons, who is a citizen of the United States of America, and
Robert B. Leckie, who is a citizen of Canada.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND MATERIAL
NAME POSITIONS HELD DURING PAST FIVE YEARS
---- -------------------------------------------------------
<S> <C>
Robert B. Leckie (age 51).............. Mr. Leckie is a director of Parent and has held this
position since September 28, 1998. Since June 1, 1998, he
has been Vice President, Secretary, General Counsel and
Chief Executive -- North American Industrial Division of
Parent. From June 1, 1994 to June 1, 1998, Mr. Leckie was
Vice President, Deputy General Counsel and Assistant
Secretary of Parent. Mr. Leckie is also the sole director
and the Chairman of the Board of Directors, President and
Secretary of the Purchaser.
Pat M. Simmons (age 43)................ Mr. Simmons is a director of Parent and has held this
position since June 15, 1995. Mr. Simmons is also Vice
President -- Taxation, Assistant Treasurer and Assistant
Secretary of Parent and has held these positions since
January 4, 1995, October 20, 1993 and September 29, 1998,
respectively. He is also the Vice President and Treasurer
of the Purchaser.
Alison R. Attfield..................... See above
Jurgen Hintz........................... See above
</TABLE>
INTERMEDIATE COMPANIES. Caradon Investments (USA), Inc., a Delaware
corporation, is a wholly owned subsidiary of Parent. Caradon Finance Inc., a
Delaware corporation, is a wholly owned subsidiary of Caradon (USA) Investments,
Inc. Caradon Holdco Inc. is a wholly owned subsidiary of Caradon Finance Inc.
These three companies are nonoperating holding companies. The business address
of all three of these companies is 1105 North Market Street, Wilmington,
Delaware 19881. The Purchaser is a wholly owned subsidiary of Caradon Finance
Inc.
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. For each person
identified below all information concerning the citizenship, current business
address, present principal occupation or employment and five-year employment
history for such person is the same as the information given above.
<TABLE>
<CAPTION>
NAME
----
<S> <C>
Robert B. Leckie....................... See above
Pat M. Simmons......................... See above
</TABLE>
36
<PAGE> 39
Copies of the Letter of Transmittal will be accepted. The Letter of Transmittal
and certificates for Shares and any other required documents should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of the addresses
set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
By Hand Delivery: By Overnight Delivery: By Mail:
----------------- ---------------------- --------
<S> <C> <C>
120 Broadway, 13th Floor 85 Challenger Road P.O. Box 3301
New York, New York 10271 Ridgefield Park, New Jersey 07660 South Hackensack,
Attn: Reorganization Attn: Reorganization Dept. New Jersey 07606
Dept Attn: Reorganization Dept.
</TABLE>
Facsimile Transmission:
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
------------------------
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may
be directed to the Information Agent at its telephone numbers and locations
listed below. Stockholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550
Toll Free: (800) 628-8509
37
<PAGE> 1
EXHIBIT (a)(2)
Letter of Transmittal
To Tender Shares of Common Stock
of
EASCO, INC.
Pursuant to the Offer to Purchase Dated August 3, 1999
by
E ACQCO INC.,
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
By Hand Delivery: By Overnight Delivery: By Mail:
<S> <C> <C>
120 Broadway, 13th Floor 85 Challenger Road P.O. Box 3301
New York, New York 10271 Ridgefield Park, South Hackensack,
Attn: Reorganization Dept. New Jersey 07660 New Jersey 07606
Attn: Reorganization Dept. Attn: Reorganization Dept.
</TABLE>
Facsimile Transmission:
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED AND COMPLETE THE SUBSTITUTE
FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Easco,
Inc. either if certificates for Shares (as defined below) are to be forwarded
herewith or, unless an Agent's Message (as defined below) is utilized, if
delivery of Shares is to be made by book-entry transfer to the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders who deliver Shares by book-entry transfer are referred to herein as
"Book-Entry Stockholders" and other stockholders are referred to herein as
"Certificate Stockholders."
Stockholders whose certificates for Shares (the "Share Certificates") are
not immediately available or who cannot deliver either their Share Certificates
for, or a Book-Entry Confirmation (as defined below) with respect to, their
Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase), must tender their Shares
in accordance with the guaranteed delivery procedure set forth in Section 2 of
the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
TOTAL SHARES
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares represented by any Share Certificates delivered to
the Depositary are being tendered. See Instruction 4.
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution --------------------------------------------------
The Depository Trust Company Account Number ------------------------------------
Transaction Code Number --------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING
(PLEASE INCLUDE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY):
Name(s) of Registered Stockholder(s) -------------------------------------------
Date of Execution of Notice of Guaranteed Delivery -----------------------------
Window Ticket Number (if any) --------------------------------------------------
Name of Institution which Guaranteed Delivery ----------------------------------
If delivery is by book-entry transfer provide the following:
The Depository Trust Company Account Number ------------------------------------
Transaction Code Number --------------------------------------------------------
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to E Acqco Inc. (the "Purchaser"), a
Delaware corporation and an indirect wholly owned subsidiary of Caradon Inc., a
Delaware corporation ("Parent"), the above-described shares of Common Stock,
$.01 par value ("Shares"), of Easco, Inc., a Delaware corporation (the
"Company"), pursuant to the Purchaser's offer to purchase all of the outstanding
Shares at a purchase price of $15.20 per Share, net to the seller in cash,
without interest, all upon the terms and subject to the conditions set forth in
the offer to purchase dated August 3, 1999 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer"). The Offer
is being made in connection with the Agreement and Plan of Merger, dated as of
July 28, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the
Company.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), (i) the Purchaser will accept for payment and pay for, as
promptly as practicable after the later of the Expiration Date or the
satisfaction or waiver of all conditions to the Offer described in Section 15 of
the Offer to Purchase, all Shares validly tendered herewith prior to the
Expiration Date and not properly withdrawn in accordance with the terms of the
Offer, and (ii) the undersigned hereby sells, assigns and transfers to, or upon
the order of, the Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby and any and all non-cash dividends,
distributions (including, without limitation, distribution of additional Shares)
or rights declared, paid or distributed in respect of such Shares on or after
July 28, 1999 (collectively, "Distributions"), and irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares and all Distributions, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver such Share Certificates and all
Distributions, or transfer ownership of such Shares and all Distributions on the
account books maintained by the Book-Entry Transfer Facility, together, in any
such case, with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Purchaser, (b) present such Shares and all Distributions
for transfer on the Company's books and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Robert B. Leckie and Pat M. Simmons as proxies of the undersigned, each
with full power of substitution, to the full extent of the undersigned's rights
with respect to the Shares tendered by the undersigned and accepted for payment
by the Purchaser (and any and all Distributions). All such proxies shall be
considered coupled with an interest in the tendered Shares. This appointment
will be effective if, when, and only to the extent that, the Purchaser accepts
such Shares for payment pursuant to the Offer. Upon such acceptance for payment,
all prior powers of attorney and proxies given by the undersigned with respect
to such Shares (and such other Shares and securities) will, without further
action, be revoked, and no subsequent proxies may be given nor any subsequent
written consent executed by the undersigned (and, if given or executed, will not
be deemed to be effective) with respect thereto. The designees of the Purchaser
named above will, with respect to the Shares and other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
of the undersigned as they in their sole discretion may deem proper at any
annual or special meeting of the stockholders of the Company or any adjournment
or postponement thereof, by written consent in lieu of any such meeting or
otherwise, and the Purchaser reserves the right to require that, in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able to
exercise full voting rights with respect to such Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and all Distributions) and, when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances, and that the same will not be subject to any adverse claim. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the tendered Shares (and all
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of the Purchaser any and all Distributions in
respect of the Shares tendered hereby, accompanied by appropriate documentation
of transfer, and, pending such
3
<PAGE> 4
remittance and transfer or appropriate assurance thereof, the Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and may
withhold the entire purchase price of the tendered Shares or deduct from such
purchase price, the amount or value of such Distribution as determined by the
Purchaser in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer,
including, without limitation, the undersigned's representation and warranty
that the undersigned owns the Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and any accompanying documents, as appropriate) in the
name of, and deliver such check and/or return such Share Certificates (and any
accompanying documents, as appropriate) to, the person or persons so indicated.
Please credit any Shares tendered herewith by book-entry transfer that are not
accepted for payment by crediting the account at the Book-Entry Transfer
Facility. The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares from the
name of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTION 1, 5, 6, AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue [ ] check [ ] certificate(s) to:
Name -----------------------------------------------------
(PLEASE PRINT)
- ----------------------------------------------------------
Address --------------------------------------------------
- ----------------------------------------------------------
(ZIP CODE)
- ----------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Certificates for Shares not tendered or not purchased are to be
mailed to someone other than the undersigned or to the undersigned at an address
other than that shown below the undersigned's signature(s).
Mail check and/or certificate(s) to:
Name -----------------------------------------------------
(PLEASE PRINT)
- ----------------------------------------------------------
Address --------------------------------------------------
- ----------------------------------------------------------
(ZIP CODE)
- ----------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
4
<PAGE> 5
SIGN
HERE
:
SIGN
HERE
&
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
X ------------------------------------------------------------------------------
X ------------------------------------------------------------------------------
Signature(s) of Owner(s)
- --------------------------------------------------------------------------------
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title) ----------------------------------------------------------
Address ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
Area Code and Telephone Number -------------------------------------------------
Taxpayer Identification Number or Social Security Number -----------------------
(See Substitute Form W-9)
Dated: ------------------------------------------------------------------ , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by the person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title
and see Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) --------------------------------------------------------
Name ---------------------------------------------------------------------------
(Please Print)
Name of Firm -------------------------------------------------------------------
Address ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
Area Code and Telephone Number -------------------------------------------------
Dated: ------------------------------------------------------------------ , 1999
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal if (i) this Letter of Transmittal is signed by the
registered holder of Shares (which, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) tendered herewith and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on this Letter
of Transmittal or (ii) such Shares are tendered for the account of a firm that
is a participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (each, an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5. If the certificates for Shares are registered in
the name of a person other than the signer of this Letter of Transmittal, or if
payment is to be made or certificates for Shares not tendered or not accepted
for payment are to be issued to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as described
above. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
stockholders either if Share Certificates are to be forwarded herewith or,
unless an Agent's Message (as defined below) is utilized, if delivery of Shares
is to be made pursuant to the procedures for book-entry transfer set forth in
Section 2 of the Offer to Purchase. For a stockholder validly to tender Shares
pursuant to the Offer, either (i) a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other documents required by the Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth herein prior to the Expiration
Date and either (a) certificates for tendered Shares must be received by the
Depositary at one of such addresses prior to the Expiration Date or (b) Shares
must be delivered pursuant to the procedures for book-entry transfer set forth
herein and a Book-Entry Confirmation (as defined in the Offer to Purchase) must
be received by the Depositary prior to the Expiration Date, or (ii) the
tendering stockholder must comply with the guaranteed delivery procedures set
forth below and in Section 2 of the Offer to Purchase.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of this Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery. If a stockholder desires to tender Shares pursuant
to the Offer and such stockholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met: (i) such tender is made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form provided by the
Purchaser is received by the Depositary, as provided in Section 2 of the Offer
to Purchase, prior to the Expiration Date; and (iii) the Share Certificates for
all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation
with respect to such Shares), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and any other documents required by this Letter of Transmittal, are
received by the Depositary within three trading days after the date of execution
of the Notice of Guaranteed Delivery as provided in Section 2 of the Offer to
Purchase. A "trading day," for purposes of the preceding sentence, is any day on
which The Nasdaq Stock Market is open for business.
THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
6
<PAGE> 7
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate schedule attached hereto.
4. Partial Tenders. (Applicable to Certificate Stockholders Only.) If fewer
than all the Share Certificates submitted are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In any such case, new Share Certificates for the remainder of the
Shares that were evidenced by the old Share Certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance for payment
of, and payment for, the Shares tendered herewith. All Shares represented by
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several Share
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment is to be made to, or Share
Certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered holder(s). Signatures on such Share
Certificates and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Share Certificates listed, the Share Certificates
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name or names of the registered holder(s) appear on the
Share Certificates. Signatures on such Share Certificates and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as provided in this Instruction 6, the
Purchaser will pay stock transfer taxes with respect to the transfer and sale of
Shares to the Purchaser or its assignee pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificates for Shares
not tendered or accepted for payment are to be registered in the name of, any
person(s) other than the registered holder(s), or if tendered certificates are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates listed in this
Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued in
the name of and/or certificates for Shares not tendered or not accepted for
payment are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such Share Certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal must be completed.
8. Waiver of Conditions. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered.
7
<PAGE> 8
9. 31% Backup Withholding; Substitute Form W-9. In order to avoid "backup
withholding" of federal income tax on payments of cash pursuant to the Offer, a
stockholder surrendering Shares in the Offer must provide the Depositary with
such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalty of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All stockholders
surrendering Shares pursuant to the Offer should complete and sign the main
signature form and the Substitute Form W-9 included as part of the Letter of
Transmittal to provide the information and certification necessary to avoid
backup withholding (unless an applicable exemption exists and is proved in a
manner satisfactory to the Purchaser and the Depositary). Noncorporate foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9" for
more instructions.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which TIN to report.
10. Requests for Assistance or Additional Copies. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and questions or requests for
assistance may be directed to the Information Agent at its address set forth
below.
11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has
been lost, destroyed or stolen, the stockholder should promptly notify the
Company's stock transfer agent, ChaseMellon Shareholder Services, L.L.C., at
(800) 851-9677. The stockholder will then be instructed as to the steps that
must be taken in order to replace the Share Certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES,
OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ALL OTHER
REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE
EXPIRATION DATE AND EITHER SHARE CERTIFICATES FOR TENDERED SHARES MUST BE
RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE
PROCEDURES FOR BOOK-ENTRY TRANSFER, OR THE NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, IN EACH CASE ON OR PRIOR TO THE EXPIRATION DATE, OR
THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED
DELIVERY.
8
<PAGE> 9
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- ---------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- PLEASE PROVIDE YOUR TIN IN THE BOX AT THE TIN: -----------------------------
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security
DEPARTMENT OF THE TREASURY, Number or Taxpayer
INTERNAL REVENUE SERVICE Identification Number
-----------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PART II -- For Payee exempt from backup withholding, see the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
instructed therein.
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a number to
be issued to me); and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service ("IRS")
that I am subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding.
---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified
PAYER'S REQUEST FOR TAXPAYER by the IRS that you are subject to backup withholding because of underreporting interest or
IDENTIFICATION NUMBER ("TIN") dividends on your tax return. However, if after being notified by the IRS that you were
AND CERTIFICATION subject to backup withholding, you received another notification from the IRS that you were
SIGN HERE W no longer subject to backup withholding, do not cross out item (2). (Also see the
instructions in the enclosed Guidelines.)
SIGNATURE: ------------------------------------------------------- DATE:-------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
sixty (60) days.
SIGNATURE:
- -------------------------------------------------------------------------- DATE:
- -------------------------
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone numbers below. Requests for additional copies
of the Offer to Purchase, the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent. Copies will be
furnished promptly at the Purchaser's expense. No fees or commissions will be
paid to any broker or dealer or any other person (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550
Toll Free: (800) 628-8509
9
<PAGE> 1
EXHIBIT (a)(3)
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
of
EASCO, INC.
to
E ACQCO INC.
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON PLC
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates representing shares of common stock, $.01 par
value (the "Shares"), of Easco, Inc., a Delaware corporation (the "Company"),
are not immediately available or if the procedures for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase). This form may be delivered by hand or
transmitted by facsimile transmission or mailed to the Depositary and must
include a guarantee by an Eligible Institution (as defined in Section 2 of the
Offer to Purchase). See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
By Hand Delivery: By Overnight Delivery: By Mail:
<S> <C> <C>
120 Broadway, 13th Floor 85 Challenger Road P.O. Box 3301
New York, New York 10271 Ridgefield Park, New Jersey 07660 South Hackensack, New Jersey 07606
Attn: Reorganization Dept. Attn: Reorganization Dept. Attn: Reorganization Dept.
</TABLE>
Facsimile Transmission:
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to E Acqco Inc., a Delaware corporation (the
"Purchaser"), upon the terms and subject to the conditions set forth in the
Offer to Purchase dated August 3, 1999 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer"), receipt of which is hereby
acknowledged, the number of Shares set forth below pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase.
Number of Shares:
----------------------------------------------------------------
Name(s) of Record Holder(s):
-----------------------------------------------------
(PLEASE PRINT)
Certificate Nos. (if available):
------------------------------------------------------
Address(es):
---------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
----------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer: [ ]
The Depository Trust Company Account Number:
---------------------------------------
Signature(s):
---------------------------------------------------------------------
Dated:--------------------------------------------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in Section 2
of the Offer to Purchase) of a transfer of such Shares, in any such case
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in the case of a
book entry Transfer, an Agent's Message (as defined in the Offer to Purchase),
and any other documents required by the Letter of Transmittal, within three
trading days after the date hereof. A "trading day," for purposes of the
preceding sentence, is any day on which The Nasdaq Stock Market is open for
business.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:-------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
-------------------------------------------------------------------------
(ZIP CODE)
Title:
---------------------------------------------------------------------------
Area Code and Tel. No.:
----------------------------------------------------------
Dated:
- ---------------------------------------, 1999
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
EASCO, INC.
at
$15.20 NET PER SHARE
by
E ACQCO INC.
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by E Acqco Inc. (the "Purchaser"), an indirect
wholly owned subsidiary of Caradon Inc. ("Parent") and an indirect wholly owned
subsidiary of Caradon plc, to act as Information Agent in connection with the
Purchaser's offer to purchase all outstanding shares of common stock, $0.01 par
value (the "Shares"), of Easco, Inc. (the "Company"), at a price (the "Offer
Price") of $15.20 per Share, net to the seller in cash, without interest, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
August 3, 1999 (the "Offer to Purchase") and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, constitute the
"Offer").
Please furnish copies of the enclosed materials to those of your clients
for whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated August 3, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. The letter to stockholders of the Company from the President and
Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to ChaseMellon Shareholder Services,
L.L.C. (the "Depositary").
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED.
<PAGE> 2
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of July 28, 1999 (the "Merger Agreement") among Parent, the Purchaser and the
Company. Following the satisfaction or waiver of certain conditions, including
approval by stockholders of the Company if such approval is required by
applicable law, the Purchaser will be merged with and into the Company, with the
Company surviving the merger (as such, the "Surviving Corporation") as an
indirect wholly owned subsidiary of Parent (the "Merger"). At the effective time
of the Merger (the "Effective Time"), each outstanding Share (other than Shares
held (i) in the treasury of the Company or by Parent or any direct or indirect
wholly owned subsidiary of Parent immediately before the Effective Time, or (ii)
by stockholders, if any, who are entitled to and who properly exercise appraisal
rights under Delaware law) will be converted into the right to receive the Offer
Price in cash, without interest (the "Merger Consideration"). See Section 13 of
the Offer to Purchase.
In the event the Purchaser acquires 90% or more of the outstanding Shares
at the time of acceptance for payment pursuant to the Offer or otherwise, the
Purchaser would be able to effect the Merger pursuant to the short-form merger
provisions of the Delaware General Corporation Law, without prior notice to, or
any action by, any other stockholder of the Company. In such event, the
Purchaser may effect the Merger without prior notice to, or any action by, any
other stockholder of the Company, promptly after its acceptance for payment of
Shares tendered into the Offer.
The Merger Agreement provides that if on the scheduled expiration date of
the Offer, all of the conditions to the Offer have not been satisfied or waived,
the Purchaser may extend the Offer in its discretion. Furthermore, if
immediately prior to the initial expiration date of the Offer (as it may be
extended) the number of Shares tendered and not withdrawn equals less than 90%
of the outstanding Shares, the Purchaser may extend the Offer for a period not
to exceed 10 business days, notwithstanding that all conditions to the Offer
have been satisfied. If immediately after the expiration of the Offer at least a
majority of the outstanding Shares on a fully-diluted basis have been tendered
in the Offer and not withdrawn and the other conditions to the Offer have been
satisfied or waived, then the parties have agreed that the Purchaser will
purchase all Shares tendered pursuant to the Offer and the Company will, if
required by applicable law, promptly convene a special meeting of the
stockholders of the Company for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby. The Company has
agreed, as soon as practicable after the expiration of the Offer, to file a
proxy statement relating to the Merger with the Securities and Exchange
Commission if less than 90% of the Shares have been tendered.
The Purchaser and Parent have entered into Stockholder Agreements, each
dated as of July 28, 1999, with the Company's largest stockholder and all of its
directors and executive officers who own Shares. Those stockholders (the
"Stockholders") that entered into the Stockholder Agreements collectively own
approximately 46% of the outstanding Shares as of the date of the Merger
Agreement (excluding Shares held by the Company or any direct or indirect
subsidiary of the Company). Such Stockholders would collectively own
approximately 49% of the outstanding Shares, assuming that all outstanding stock
options were exercised. Under the Stockholder Agreements, each Stockholder
agreed, among other things, to validly tender the Shares beneficially owned by
it or him, as well as any Shares subsequently acquired by it or him. The
Stockholder Agreements are more fully described in Section 13 of the Offer to
Purchase. Pursuant to its Stockholder Agreement, the Company's largest
stockholder (owning approximately 44% of the outstanding Shares) has agreed to
vote its Shares in favor of the Merger, the adoption by the Company of the
Merger Agreement and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, and agreed to vote against
(i) any Takeover Proposal (as defined in the Offer to Purchase) and (ii) certain
other actions by the Company. Pursuant to its Stockholder Agreement, such
Stockholder has also granted to Parent an irrevocable proxy pursuant to which it
irrevocably appointed representatives of Parent and the Purchaser as its proxies
and attorneys-in-fact to vote the Stockholder's Shares in the foregoing manner
at any time until the earlier to occur of the valid termination of the Merger
Agreement or the Effective Time.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
A MAJORITY OF THE OUTSTANDING SHARES, DETERMINED ON A FULLY DILUTED BASIS, AT
THE TIME OF ACCEPTANCE FOR PAYMENT.
2
<PAGE> 3
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY TENDER THEIR SHARES
PURSUANT TO THE OFFER.
The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on August 30, 1999, unless the Offer is extended by the Purchaser.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay, as promptly as
practicable after the Expiration Date, for all Shares validly tendered prior to
the Expiration Date and not theretofore properly withdrawn in accordance with
Section 3 of the Offer to Purchase. The term "Expiration Date" means 12:00
midnight, New York City time, on August 30, 1999, unless and until the Offer is
extended in accordance with the Merger Agreement, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended, shall expire. For purposes of the Offer, the Purchaser will be deemed
to have accepted for payment, and thereby purchased, Shares validly tendered to
the Purchaser and not properly withdrawn as, if and when the Purchaser gives
oral or written notice to the Depositary of the Purchaser's acceptance of such
Shares for payment pursuant to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation of a transfer of such Shares as
described in Section 2 of the Offer to Purchase), (ii) a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or, in the case of a book-entry transfer effected
pursuant to the procedure set forth in Section 2 of the Offer to Purchase, an
Agent's Message (as defined in the Offer to Purchase), and (iii) any other
documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER
ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or the
procedure for book-entry transfer cannot be completed on a timely basis or time
will not permit all required documents to reach the Depositary prior to the
Expiration Date, such stockholder's tender may be effected by following the
guaranteed delivery procedures specified in Section 2 of the Offer to Purchase.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. However, you will be
reimbursed upon request for customary mailing and handling expenses incurred by
you in forwarding the enclosed offering materials to your customers.
The Purchaser will pay stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 to the Letter of Transmittal.
Questions and requests for assistance or for additional copies of the
enclosed material may be directed to the Information Agent at the address and
telephone numbers set forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
D.F. King & Co., Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
EASCO, INC.
at
$15.20 NET PER SHARE
by
E ACQCO INC.
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON plc
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, AUGUST 30, 1999,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 3,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer")
relating to an offer by E Acqco Inc. (the "Purchaser"), an indirect wholly owned
subsidiary of Caradon Inc. ("Parent") and an indirect wholly owned subsidiary of
Caradon plc, to purchase all outstanding shares of common stock, $0.01 par value
(the "Shares"), of Easco, Inc. (the "Company"), at a price (the "Offer Price")
equal to $15.20 per Share, net to the seller in cash, without interest, as
described in the enclosed Offer to Purchase. Also enclosed is the Letter to
Stockholders of the Company from the President and Chief Executive Officer of
the Company accompanied by the Company's Solicitation/Recommendation Statement
on Schedule 14D-9.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used to tender Shares held by us for your
account.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is invited to the following:
1. The tender price is equal to $15.20 per Share, net to the seller in
cash, without interest, upon the terms and subject to the conditions set
forth in the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Offer is being made pursuant to the Agreement and Plan of
Merger dated as of July 28, 1999 (the "Merger Agreement") among Parent, the
Purchaser and the Company. Following the satisfaction or waiver of certain
conditions, including approval by stockholders of the Company if such
approval is required by applicable law, the Purchaser will be merged with
and into the Company, with the Company surviving the merger (as such, the
"Surviving Corporation") as an indirect wholly owned subsidiary of Parent
(the "Merger"). At the effective time of the Merger (the "Effective Time"),
each outstanding Share (other than Shares held (i) in the treasury of the
Company or by Parent or any direct or indirect wholly owned subsidiary of
Parent immediately before the Effective Time, or (ii) by stockholders, if
any,
<PAGE> 2
who are entitled to and who properly exercise appraisal rights under
Delaware law)will be converted into the right to receive the Offer Price in
cash, without interest (the "Merger Consideration").
4. In the event the Purchaser acquires 90% or more of the outstanding
Shares at the time of acceptance for payment pursuant to the Offer or
otherwise, the Purchaser would be able to effect the Merger pursuant to the
short-form merger provisions of the Delaware General Corporation Law,
without prior notice to, or any action by, any other stockholder of the
Company. In such event, the Purchaser may effect the Merger without prior
notice to, or any action by, any other stockholder of the Company, promptly
after its acceptance for payment of Shares tendered into the Offer. The
Merger Agreement provides that if on the scheduled expiration date of the
Offer, all of the conditions to the Offer have not been satisfied or
waived, the Purchaser may extend the Offer in its discretion. Furthermore,
if immediately prior to the initial expiration date of the Offer (as it may
be extended) the number of Shares tendered and not withdrawn equals less
than 90% of the outstanding Shares, the Purchaser may extend the Offer for
a period not to exceed 10 business days, notwithstanding that all
conditions to the Offer have been satisfied. If immediately after the
expiration of the Offer at least a majority of the outstanding Shares on a
fully-diluted basis have been tendered in the Offer and not withdrawn and
the other conditions to the Offer have been satisfied or waived, then the
parties have agreed that the Purchaser will purchase all Shares tendered
pursuant to the Offer and the Company will, if required by applicable law,
promptly convene a special meeting of the stockholders of the Company for
the purpose of considering and taking action on the Merger Agreement and
the transactions contemplated thereby. The Company has agreed, as soon as
practicable after the expiration of the Offer, to file a proxy statement
relating to the Merger with the Securities and Exchange Commission if less
than 90% of the Shares have been tendered.
5. The Purchaser and Parent have entered into Stockholder Agreements,
each dated as of July 28, 1999, with the Company's largest stockholder and
all of its directors and executive officers who own Shares. Those
stockholders (the "Stockholders") that entered into the Stockholder
Agreements collectively own approximately 46% of the outstanding Shares as
of the date of the Merger Agreement (excluding Shares held by the Company
or any direct or indirect subsidiary of the Company). Such Stockholders
would collectively own approximately 49% of the outstanding Shares assuming
that all outstanding stock options were exercised. Under the Stockholder
Agreements, each Stockholder agreed, among other things, to validly tender
the Shares beneficially owned by it or him, as well as any Shares
subsequently acquired by it or him. The Stockholder Agreements are more
fully described in Section 13 of the Offer to Purchase. Pursuant to its
Stockholder Agreement, the Company's largest stockholder (owning
approximately 44% of the outstanding Shares) has agreed to vote its Shares
in favor of the Merger, the adoption by the Company of the Merger Agreement
and the approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement, and agreed to vote against (i) any
Takeover Proposal (as defined in the Offer to Purchase) and (ii) certain
other actions of the Company. Pursuant to its Stockholder Agreement, such
Stockholder has also granted to Parent an irrevocable proxy pursuant to
which it irrevocably appointed representatives of Parent and the Purchaser
as its proxies and attorneys-in-fact to vote the Stockholder's Shares in
the foregoing manner at any time until the earlier to occur of the valid
termination of the Merger Agreement or the Effective Time.
6. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING
BEEN VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AT LEAST A MAJORITY OF THE OUTSTANDING SHARES, DETERMINED ON A FULLY
DILUTED BASIS, AT THE TIME OF ACCEPTANCE FOR PAYMENT.
7. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER, THE MERGER AND THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF EACH OF
THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
COMPANY'S STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE
COMPANY TENDER THEIR SHARES PURSUANT TO THE OFFER.
8. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on August 30, 1999, unless the Offer is extended by the
Purchaser. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions
of any
2
<PAGE> 3
such extension or amendment), the Purchaser will accept for payment and
pay, as promptly as practicable after the Expiration Date, for all Shares
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn in accordance with Section 3 of the Offer to Purchase. The term
"Expiration Date" means 12:00 midnight, New York City time, on August 30,
1999, unless and until the Offer is extended in accordance with the Merger
Agreement, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended, shall expire. For
purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser
and not properly withdrawn as, if and when the Purchaser gives oral or
written notice to ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") of the Purchaser's acceptance of such Shares for payment
pursuant to the Offer. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares (or a timely Book-Entry
Confirmation of a transfer of such Shares as described in Section 2 of the
Offer to Purchase), (ii) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to
the procedure set forth in Section 2 of the Offer to Purchase, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other
documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when
certificates for Shares or Book-Entry Confirmations with respect to Shares
are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF THE SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
9. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. Neither the
Purchaser nor Parent is aware of any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or Parent becomes aware of any state
law that would limit the class of offerees in the Offer, the Purchaser will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to
holders of Shares prior to the expiration of the Offer. In any jurisdiction
where securities or other laws require the offer to be made by a licensed broker
or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
set forth below. An envelope to return your instructions to us is enclosed. If
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified below.
YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED PROMPTLY TO PERMIT US TO SUBMIT
A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
3
<PAGE> 4
Instructions with Respect to the Offer to Purchase
All Outstanding Shares of Common Stock
of
EASCO, INC.
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase dated August 3, 1999 of E Acqco Inc. an indirect wholly owned
subsidiary of Caradon Inc. and an indirect wholly owned subsidiary of Caradon
plc, and the related Letter of Transmittal, relating to shares of common stock,
$.01 par value (the "Shares"), of Easco, Inc.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set forth
in such Offer to Purchase and the related Letter of Transmittal.
Number of Shares to be Tendered*
Shares:
------------------------------------------------------------------------------
Dated:
------------------------------------------------------------------------------,
1999
SIGN HERE
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Signature(s)
------------------------------------------------------------------------------
Please print name(s)
------------------------------------------------------------------------------
Address
------------------------------------------------------------------------------
Area Code and Telephone Number
------------------------------------------------------------------------------
Tax Identification or Social Security Number
- -------------------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
4
<PAGE> 1
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<S> <C>
- ------------------------------------------------------------
GIVE THE SOCIAL SE-
FOR THIS TYPE OF ACCOUNT: CURITY
NUMBER OF--
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
5. Sole proprietorship The owner(3)
- ------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or pension The legal entity(4)
trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or other
tax-exempt organization account
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), an individual
retirement plan or a custodial account under section 403(b)(7) if the
account satisfies the requirements of section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- A foreign government or any political subdivision, agency or instrumentality
thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities registered in the U.S. or a possession
of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one non-resident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the number whether or not recipients are required
to file tax returns. Beginning January 1, 1993, payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain penalties
may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is a clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false state with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
EXHIBIT (a)(7)
FOR IMMEDIATE RELEASE
Contacts -- Caradon Inc.: Scott Langdon, Corporate Communications
(416-234-5808)
Easco, Inc.: Terry D. Smith, Executive Vice President and Chief
Financial Officer
(330-545-4311)
CARADON INC. AGREES TO ACQUIRE
EASCO, INC. FOR $15.20 CASH PER SHARE
WEYBRIDGE, ENGLAND and GIRARD, OHIO, July 28, 1999 -- Caradon Inc., a US
wholly owned subsidiary of Caradon plc, and Easco, Inc. (NASDAQ: ESCO) today
jointly announced that Caradon and Easco have signed a definitive agreement
pursuant to which Caradon will acquire all of the outstanding common stock of
Easco for a cash price of $15.20 per share, or approximately $155 million in the
aggregate. The agreement was unanimously approved by the boards of directors of
both companies.
Under the terms of the agreement, a Caradon subsidiary will make a cash
tender offer for all Easco shares at a price of $15.20 per share, and upon
successful completion of the tender offer the Easco stock not tendered will be
cashed out at $15.20 per share in a statutory merger. In connection with the
transaction, Easco has changed the record date for its previously declared
regular quarterly cash dividend of $0.01 per share. The new record date for the
dividend is September 15, 1999, payable on September 30, 1999. Easco's largest
stockholder, American Industrial Partners, and each of Easco's stock-owning
directors and executive officers, collectively owning approximately 46% of
Easco's outstanding shares, have entered into separate agreements with Caradon
supporting the transaction.
The acquisition of Easco is subject to a majority of Easco's fully diluted
shares being tendered in the tender offer and not withdrawn, expiration of the
Hart-Scott-Rodino review period and other customary conditions.
Jurgen Hintz, Group Chief Executive of Caradon plc, said, "The acquisition
of Easco is a significant step in Caradon's continuing commitment to expand our
highly successful and growing North American aluminum extrusion business. The
combined businesses will constitute one of the largest aluminum extrusion
operations in North America."
Norman E. Wells, Jr., President and Chief Executive Officer of Easco,
stated, "This merger combines the capabilities of two excellent companies in the
aluminum extrusion industry. We are pleased that the merger also provides our
stockholders with an exceptional value-maximizing opportunity."
Caradon Inc. is a wholly-owned subsidiary of Caradon plc, of Weybridge,
England. Caradon plc is a major international group of companies operating
across Europe and North America. Caradon plc is committed to growing each of its
four product sectors -- plumbing, electrical, extrusions and security printing.
Easco, Inc. is the largest independent extruder of soft alloy aluminum
products in the United States and is a leading producer of painted extrusions.
The company operates 21 aluminum extrusion presses and three casting facilities.
Its products include standard and custom profiles, conduit and drawn tubing.
Easco's largest shareholder is American Industrial Partners, a private equity
firm with offices in New York and San Francisco.
Wasserstein Perella & Co, Inc. advised Easco in the transaction and KPMG
Corporate Finance advised Caradon.
<PAGE> 1
EXHIBIT (a)(8)
CARADON PLC
ACQUISITION OF US EXTRUSION BUSINESS FOR $155M ((POUND)97m)
Caradon today announced that it has signed a definitive agreement pursuant to
which Caradon will acquire all of the outstanding shares of common stock of
Easco, Inc. ("Easco"), a US publicly traded company, at a cash price of $15.20
per share, valuing the net equity at approximately $155m ((pound)97m).
Caradon has received irrevocable undertakings from Easco's largest stockholder,
American Industrial Partners, and each of Easco's directors and executive
officers, collectively owning approximately 46% of Easco's outstanding shares.
Easco is the largest independent aluminium extrusion company of soft alloy
products in North America, serving transportation, building, electronics,
consumer durables and distribution markets. It employs 2000 people and has
eleven manufacturing sites in the United States.
The turnover in the year to December 1998 was $314m ((pound)197m) with EBITDA of
$32m ((pound)20m) and profit before tax of $13.3m ((pound)8.4m). Net operating
assets at the end of December 1998 was $89.5m ((pound)56.3m) and net debt of
$77m ((pound)48m).
Caradon has substantial aluminium extrusion operations in North America which
support market leadership in Canada and strong regional positions in the US.
In the half year to June 1999 the Caradon Extrusion sector reported operating
profits up 30% to (pound)10.8m on a sales increase of 15% at (pound)112m. In the
full year to December 1998 operating profits were (pound)18.3m (up16% on
previous year) on sales of (pound)196.1m.
Commenting on the proposed acquisition, Jurgen Hintz, Group Chief Executive,
said:
"This acquisition provides Caradon the opportunity to more than double our
buoyant and profitable Aluminium Extrusion business. The combination with
Easco creates one of the largest competitors in the growing $4 billion North
American Extrusion market. It promises substantial synergies, bigger and
better manufacturing capacity, improved mix of customer segments, and access
to important low cost remelt capacity.
This business combination offers significant opportunities to create
shareholder value.
The management and employees of Easco provide a further advance in our ability
to serve customers. We welcome Norman Wells and his team to the Caradon Group."
Wasserstein Perella & Co., Inc. advised Easco in the transaction and KPMG
Corporate Finance advised Caradon.
<PAGE> 1
EXHIBIT (a)(9)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase dated August 3, 1999, and the related Letter of
Transmittal and is not being made to (nor will tenders be accepted from) holders
of Shares in any jurisdiction in which the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction. In those jurisdictions where securities laws, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of the Purchaser (as defined below) by one
or more registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of
Common Stock
of
EASCO, INC.
at
$15.20 Net Per Share
by
E Acqco Inc.
an indirect wholly owned subsidiary of
CARADON INC.
and an indirect wholly owned subsidiary of
CARADON PLC
E Acqco Inc. (the "Purchaser"), an indirect wholly owned subsidiary of
Caradon Inc. ("Parent"), and an indirect wholly owned subsidiary of Caradon plc,
is offering to purchase all outstanding shares of Common Stock, $0.01 par value
("Shares"), of Easco, Inc. (the "Company"), at a purchase price of $15.20 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase, dated August 3, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer"). Following
the Offer, the Purchaser intends to effect the Merger described below.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, AUGUST 30, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE OF THE OFFER
SUCH NUMBER OF SHARES THAT WOULD CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES
AT THE DATE OF THE EXPIRATION OF THE OFFER
<PAGE> 2
(ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE SHARES OUTSTANDING AT THE
EXPIRATION DATE OF THE OFFER) (THE "MINIMUM CONDITION"). THE OFFER IS ALSO
CONDITIONED UPON THE WAITING PERIOD UNDER THE HSR ACT (AS DEFINED IN THE OFFER
TO PURCHASE) APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING
EXPIRED OR BEEN TERMINATED. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS.
The Offer is being made pursuant to an Agreement and Plan of Merger
dated as of July 28, 1999 (the "Merger Agreement"), among Parent, the Purchaser
and the Company. The Merger Agreement provides that, among other things, as soon
as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the Delaware General Corporation Law,
as amended (the "Delaware Law"), the Purchaser will be merged with and into the
Company (the "Merger"). If the Purchaser acquires at least 90% of the
outstanding Shares pursuant to the Offer, the Purchaser would be able to effect
the Merger pursuant to the "short-form" merger provisions of Section 253 of the
Delaware Law, without prior notice to, or any action by, any stockholder of the
Company. Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Corporation") and will be an indirect
wholly owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), each Share that is issued and outstanding (other than Shares
held in the treasury of the Company or by Parent, the Purchaser or any other
direct or indirect wholly owned subsidiary of Parent or Shares with respect to
which appraisal rights are properly exercised under the Delaware Law) will be
converted into the right to receive from the Surviving Corporation $15.20 (or
any higher price that may be paid for each Share pursuant to the Offer) in cash,
without interest thereon.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER, THE MERGER AND THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS
CONTEMPLATED THEREBY, HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF EACH OF THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF SHARES TENDER THEIR
SHARES PURSUANT TO THE OFFER.
As a condition to Parent's willingness to enter into the Merger
Agreement, Parent and the Purchaser entered into stockholder agreements dated
as of July 28, 1999 with each of American Industrial Partners Capital Fund,
L.P. ("AIP"), which holds 4,239,470 Shares, representing approximately 44% of
the outstanding Shares, and certain directors and executive officers of the
Company, who collectively hold 226,800 Shares, representing approximately 2.3%
of the outstanding Shares. Pursuant to its stockholder agreement, AIP has
agreed, among other things, to tender the Shares held by it in the Offer and
granted the Purchaser an irrevocable proxy to vote such Shares in connection
with any meeting of the stockholders of the Company in favor of the Merger and
against any action that would interfere with the Merger, including any
proposal by a third party to acquire the Company. Pursuant to his respective
stockholder agreement, each of the directors and executive officers has agreed,
among other things, to tender the Shares held by him in the Offer.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") of the Purchaser's
acceptance of such Shares for payment pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for tendering stockholders for the purpose of receiving
payment from the Purchaser and transmitting such payment to tendering
stockholders. Under no circumstances will interest be paid by the Purchaser
because of any delay in making such payment. In all cases, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates for such Shares or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in Section 2 of the
Offer to Purchase) pursuant to the procedures set forth in the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof), with all required signature
-2-
<PAGE> 3
guarantees or, in the case of a book-entry transfer, an Agent's Message (as
defined in Section 2 of the Offer to Purchase) and (iii) any other documents
required by the Letter of Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate
to the Purchaser's obligation to purchase the Shares have not been satisfied by
12:00 midnight, New York City time, on Monday, August 30, 1999 (or any other
time then set as the expiration date of the Offer), the Purchaser may, subject
to the terms of the Merger Agreement, elect to (i) extend the Offer and, subject
to applicable withdrawal rights, retain all tendered Shares until the expiration
of the Offer, as extended, (ii) subject to complying with applicable rules and
regulations of the Securities and Exchange Commission, accept for payment all
Shares so tendered and not extend the Offer or (iii) terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
stockholders. The term "Expiration Date" means 12:00 midnight, New York City
time, on Monday, August 30, 1999, unless the Purchaser shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire.
Subject to the limitations set forth in the Offer and the Merger
Agreement, the Purchaser reserves the right (but will not be obligated), at any
time or from time to time in its sole discretion, to extend the period during
which the Offer is open by giving oral or written notice of such extension to
the Depositary and by making a public announcement of such extension. There can
be no assurance that the Purchaser will exercise its right to extend the Offer.
Any extension of the period during which the Offer is open will be followed, as
promptly as practicable, by public announcement thereof, such announcement to be
issued not later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirement of Rules 14d-4(c) and 14e-1(d) of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw such stockholder's Shares.
Except as otherwise provided in Section 3 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable, except that such
Shares may be withdrawn at any time prior to the Expiration Date and, unless
already accepted for payment pursuant to the Offer, may also be withdrawn at
any time after Saturday, October 2, 1999. For a withdrawal of Shares tendered
pursuant to the Offer to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered, if different from that of
the person who tendered the Shares.
If certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
-3-
<PAGE> 4
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signature on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedures for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and must
otherwise comply with the Book-Entry Transfer Facility's procedures. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in its sole discretion, and its
determination will be final and binding on all parties. None of the Purchaser,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give such notification.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference. The Company has
provided the Purchaser with the Company's list of stockholders and security
position listings for the purpose of disseminating the Offer to holders of
Shares.
The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Any questions or requests for assistance or copies of the Offer to
Purchase and the related Letter of Transmittal and other tender offer materials
may be directed to the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer. No fees or commissions will be payable to
brokers, dealers or other persons other than the Information Agent and the
Depositary for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
--------------------
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
212-269-5550
Toll Free: (800) 628-8509
August 3, 1999
-4-
<PAGE> 1
EXHIBIT (a)(10)
FOR IMMEDIATE RELEASE
Contact -- Scott Langdon, Corporate Communications (416-234-5808)
CARADON INC. COMMENCES TENDER OFFER FOR EASCO, INC.
AT $15.20 PER SHARE
WEYBRIDGE, ENGLAND, August 3, 1999 - Caradon Inc., the wholly owned U.S. holding
company of United Kingdom industrial group Caradon plc, announced today that an
indirect wholly owned subsidiary has commenced its previously announced tender
offer for shares of common stock of Easco, Inc. (NASDAQ: ESCO). The tender
offer, which is being made pursuant to an Agreement and Plan of Merger dated
July 28, 1999, is scheduled to expire at 12:00 midnight, New York City time, on
Monday, August 30, 1999, unless extended. Following the consummation of the
tender offer, Caradon intends to complete a merger to acquire all of the
remaining shares of Easco common stock that are not tendered in the offer.
The Board of Directors of Easco has unanimously approved the tender offer, the
merger and the other transactions contemplated by the Agreement and Plan of
Merger, unanimously determined that the terms of the tender offer and merger are
fair to and in the best interests of Easco's stockholders, and unanimously
recommends that stockholders tender their shares pursuant to the offer.
Easco's largest stockholder, American Industrial Partners Capital Fund, L.P.,
and each of Easco's directors and executive officers who own shares, have
entered into separate agreements with Caradon in support of the transaction.
Under those agreements, the stockholders (who collectively own approximately 46%
of Easco's outstanding shares) have agreed to tender all of their shares in the
offer.
The tender offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the offer that number of
shares which represents at least a majority of the total number of shares
outstanding on the date shares are accepted for payment, the expiration or
termination of the customary antitrust waiting period and other customary
conditions. Other terms and conditions of the tender offer are set forth in the
definitive tender offer documents being filed with the Securities and Exchange
Commission and mailed to Easco's stockholders.
ChaseMellon Shareholder Services, L.L.C. will act as depositary for the tender
offer and D.F. King & Co., Inc. will act as information agent.
Caradon Inc. is a wholly owned subsidiary of Caradon plc, of Weybridge, England.
Caradon plc is a major international group of companies operating in four
product sectors -- plumbing, electrical, extrusions and security printing --
across Europe and North America.
<PAGE> 1
EXHIBIT (b)(1)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172)(the "COMPANY"); and
(2) BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION of New Broad
Street House, 35 New Broad Street, London EC2M 1NH (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 25,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered by the Bank to leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating thereto, in the acquisition of assets of
a kind generally used by the Group in its business
operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the
-5-
<PAGE> 6
company becomes a member of the Group) of an overdraft
(or other equivalent) facility granted to such company
prior to its becoming a member of the Group) has not been
increased in contemplation of, or since the date of, such
company becoming a member of the Group and (c) (save for
any Security Interest created before the date of such
company becoming a member of the Group, over any freehold
or leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
"YEAR 2000 COMPLIANT": means, in relation to a company, that all of
its computer systems and any other hardware, software, plant or
machinery in its control, power or possession from time to time and
used whether directly or indirectly in connection with the provision
of any services it provides has the ability to provide all the
following functions:
(a) handle date information before, during and after 1 January
2000 including, but not limited to, accepting date input,
providing date output and performing calculations on dates
or portions of dates;
(b) function accurately and without interruption before, during
and after 1 January 2000, without any change in operations
associated with the advent of the year 2000 and the new
century;
(c) respond to two-digit input and process two-digit year date
information in ways that resolve the ambiguity as to
century in a disclosed, defined and predetermined manner;
and
(d) store and provide output of date information in ways that
are similarly unambiguous as to century.
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
-8-
<PAGE> 9
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
-9-
<PAGE> 10
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under
the Revolving Multi-Currency Credit Facility
Agreement dated 1st July 1993 (as amended) made
between the Company and NationsBank of North
Carolina, N.A., the "Existing Outstandings",
shall have been repaid or prepaid in full and
the aggregate commitments under such facility
agreements cancelled on the day of such
repayment or prepayment; or
(b) the amount of the first Utilisation together
with other sums available to the Borrower shall
be used to repay or prepay the Existing
Outstandings and the aggregate commitments under
such facility agreement cancelled on the day of
such repayment or prepayment.
-10-
<PAGE> 11
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of Pound
Sterling 1,000,000 and an integral multiple of
Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
-11-
<PAGE> 12
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
-12-
<PAGE> 13
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
-13-
<PAGE> 14
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the amount by which the Maturing
Advance exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire
-14-
<PAGE> 15
control of the Company (and for the purpose of this Clause a single
person or group of persons shall have acquired control if it or they
own or hold more than 50% (fifty per cent.) of the issued share
capital of the Company having the right to attend and vote at general
meetings of the Company or more than 50% (fifty per cent.) of such
rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of
such period, together with accrued interest thereon up to
the date of payment and all other amounts payable to the
Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
-15-
<PAGE> 16
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State
-16-
<PAGE> 17
by crediting an account of the creditor, can be paid by the debtor
either in the euro unit or in that national currency unit, a Party
shall be entitled to pay that amount either in the euro unit or in
the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
-17-
<PAGE> 18
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a
-18-
<PAGE> 19
net amount equal to the full amount which it would have received had
payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief, credit
or deduction available to it. The Bank is not obliged to disclose any
information regarding its tax affairs or computations to any
Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
-19-
<PAGE> 20
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in
the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business
Days of receipt of the notification, the Company and the
Bank shall enter into negotiations for a period of not more
than 25 days with a view to agreeing a substitute basis for
determining the rate of interest and/or funding applicable
to the affected Advance and any
-20-
<PAGE> 21
future Advances in the currency of the affected Advance
provided that if no substitute basis is agreed within that
period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by
the Bank as the rate per annum determined by the Bank to
be the aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled
-21-
<PAGE> 22
"International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising from
the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the Bank
will promptly notify the Company of the relevant event and the Company
shall on demand pay to the Bank such amount as the Bank certifies in
the demand will compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances comprised
in a class of advances formed by or including the Advances
made or to be made by it under this Agreement as is
attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or calculated
by reference to any amount received or receivable by the Bank
under this Agreement which is forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall
net income of the Bank (or the overall net income of a
division or branch of the Bank) imposed in the jurisdiction
in which its principal office or the relevant lending office
for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time
of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the assigning,
transferring or novating Bank; or
-22-
<PAGE> 23
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain
any Advance, then the Bank shall notify the Company accordingly and on
the Maturity Date of each relevant Advance (or such earlier date as the
relevant law or directive may require) the relevant Borrower shall
repay or prepay, as the case may be, any Advances made to it by the
Bank together with all other amounts payable by it to the Bank under
this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation in
relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made to
it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably open
to it to mitigate or remove those circumstances (including seeking
recovery for the account of the relevant Borrower where reasonably
practicable and/or
-23-
<PAGE> 24
transferring its rights and obligations under this Agreement to another
bank or financial institution acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
-24-
<PAGE> 25
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by, this
Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to
the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the UK
consistently applied or if not consistently applied
together with details of the changes in such
application; and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the consolidated
financial condition of the companies comprising the
Group as at the date to which they were drawn up, and
the results of its consolidated operations for the year
ended on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts
were drawn up which would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive
the execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and warranties
set out in Clauses 16.2 to 16.10 shall be deemed to be repeated by the
Company and the relevant Borrower on the date of each Request made by
such Borrower and the date of each Utilisation made to such Borrower
with reference to the facts and circumstances then existing.
-25-
<PAGE> 26
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this Agreement
or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that financial
year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable detail
showing the bases for the list; and
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require including,
without limitation, information on Year 2000 compliance, and
any auditors management letters issued concerning the same.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
-26-
<PAGE> 27
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of Consolidated
Tangible Net Worth (as shown in the latest audited accounts
of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per
cent. of Consolidated Tangible Net Worth (as shown in the
latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than 3
to 1.
YEAR 2000 COMPLIANCE
17.10 Each Borrower shall ensure that it is Year 2000 compliant and shall use
all reasonable endeavours to ensure that each of its counterparties to
any agreement are similarly compliant.
-27-
<PAGE> 28
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not a
Borrower it will only be an Event of Default if the event is, in the
reasonable opinion of the Bank, reasonably likely to affect materially
and adversely the Company's ability to perform its obligations under
this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable
by it under this Agreement at the place at and in the currency in which
it is expressed to be payable and the default is not remedied within
seven Business Days after the Bank gives notice to the Company and the
relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case of
a breach capable of being remedied) fails to remedy the breach within
fourteen Business Days after the date on which the Company and the
relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand as
a result of an event of default (howsoever described) under
the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
-28-
<PAGE> 29
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due or
to be insolvent, or admits inability to pay its debts generally as they
fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all or
any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened
to consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment or
arrangement with any creditors of, or the rehabilitation,
administration, custodianship, liquidation, or dissolution
of, any Borrower or Material Subsidiary or any other
insolvency proceedings involving any Borrower or Material
Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent not to
be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect
of any Borrower or Material Subsidiary or any substantial part of its
assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint such
a receiver or manager.
-29-
<PAGE> 30
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound Sterling
1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of those mentioned in Clauses 18.6 to 18.11 (inclusive) in
particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or
any other applicable United States federal or state
bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower
or Material Subsidiary in an involuntary case under the
United States federal bankruptcy laws, as now or hereafter
constituted, or any other applicable United States federal or
state bankruptcy, insolvency or other similar law and such
decree or order shall continue unstayed and in effect for a
period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry on
all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued interest,
and all other amounts accrued under this Agreement, be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand, whereupon
they shall immediately become payable on demand together with
all other amounts accrued under this Agreement.
-30-
<PAGE> 31
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound
Sterling *. The arrangement fee is payable within 30 days of the
Signing Date or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period in
respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each six
month period with the first such period commencing on the Signing Date
and the last such period (adjusted as appropriate) ending on the Final
Maturity Date and shall be paid in arrear on the last day of each such
period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax
or any other tax which might be chargeable in connection with that fee.
If any value added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document referred
to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
-31-
<PAGE> 32
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an Event
of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or as
a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
less than the amount owed in the contractual currency, the
relevant Borrower shall, forthwith on demand, pay to the Bank
an amount in the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any such
conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
more than the amount owed in the contractual currency the
Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
-32-
<PAGE> 33
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in which
it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received
from any source otherwise than on its Maturity Date and, for
the purposes of this sub-Clause 22.3.3, the Maturity Date of
an overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower
has delivered a notice of Utilisation by telephone or a
Request (save where such notice or Request is expressly
permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees
to pay to the Bank from time to time on demand any and every
sum or sums of money which each Borrower shall at any time be
liable to pay to the Bank under or pursuant to this Agreement
and which shall not have been paid at the time such demand is
made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any loss
incurred by the Bank as a result of any of the obligations of
each Borrower under or pursuant to this Agreement becoming
void, voidable, unenforceable or ineffective as against each
such Borrower for any reason whatsoever, whether or not known
to the Bank, the amount of such loss being the amount which
the person or persons suffering it would otherwise have been
entitled to recover from any Borrower.
-33-
<PAGE> 34
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all
or any of the obligations of the Borrowers under this Agreement and
shall continue in full force and effect until final payment in full of
all amounts owing by the Borrowers thereunder and total satisfaction of
all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise affected
by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder or
under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers or
remedies conferred upon the Bank by this Agreement or by law.
-34-
<PAGE> 35
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or
any other person being avoided or reduced by virtue of any provisions
or enactments relating to bankruptcy, insolvency, liquidation or
similar laws of general application for the time being in force and, if
any such security or payment is so avoided or reduced, the Bank shall
be entitled to recover the value or amount of such security or payment
from the Company subsequently as if such settlement or discharge had
not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
-35-
<PAGE> 36
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which it
relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee payable
pursuant to Clause 19.2 (Commitment Fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year
of 365 days, or, in the case of interest payable on an amount
denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on behalf
of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement without
the prior written consent of the Company (such consent not to be
unreasonably withheld) provided that such consent shall not be required
where the assignee or transferee is an Affiliate of the Bank which is a
Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer, participation,
sub-participation or other agreement in relation to this Agreement it
shall notify the Company in advance of its intention and of the
identity of the proposed transferee, participant, sub-participant or
other party to such agreement and the amount of the proposed transfer,
participation, sub participation, or other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into, any
kind of transfer, participation, sub-participation or other agreement
in relation to this Agreement:
26.1.1 a copy of this Agreement; and
-36-
<PAGE> 37
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but only
if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the
Bank's Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
-37-
<PAGE> 38
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that
place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for all
notices under, or in connection with, this Agreement, is:
(a) that notified by that Party for this purpose to the
other Party; or
(b) any other notified by that Party for this purpose to the
other by not less than five Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
New Broad Street House
35 New Broad Street,
London EC2M 1NH
Attention: Aidan Fisher
Telex: 883936
Facsimile No: 0171 282 2201
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company
-38-
<PAGE> 39
becomes an Acceding Borrower by delivering or procuring the delivery to
the Bank a Borrower's Accession Notice duly executed by the Company and
the relevant Subsidiary provided that if such Subsidiary is not
resident in the United Kingdom for tax purposes the Company and the
Bank agree to make such amendments to this Agreement as may be
reasonably required at the time in order to allow such Subsidiary to
pay interest to the Bank without deduction or withholding of any
Relevant Tax and to provide such Subsidiary with equivalent rights,
mutatis mutandis, to those contained in Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has
confirmed to the Company that it has received, in form and substance
satisfactory to it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of such
notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country
shall be translated into, or paid in, the currency unit of
that country designated by the Bank acting reasonably and in
consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be at
the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Bank acting
reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of it
and the new currency and to put the Bank and the Borrowers in the same
position, so far as is possible, that they would have been in if no
change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new currency
in all or any part of the European Union will not result in the
discharge cancellation,
-39-
<PAGE> 40
rescission or termination in whole or in pat of this Agreement or give
any party hereto the right to cancel, rescind, terminate or vary (other
than as aforesaid) this Agreement in whole or in part or give rise to
an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken together
shall be delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on its
behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in Clause
34.2 shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By: /s/Aidan Fisher
Aidan Fisher
Senior Vice President, Bank Debt
-41-
<PAGE> 1
EXHIBIT (b)(2)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) BARCLAYS BANK PLC of 54 Lombard Street, London EC3P 3AH (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET (or any other suitable
settlement system the Company and the Bank have agreed on) is
operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 30,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the
Treaty on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating thereto, in the acquisition of assets of
a kind generally used by the Group in its business
operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the
-5-
<PAGE> 6
company becomes a member of the Group) of an overdraft (or
other equivalent) facility granted to such company prior to
its becoming a member of the Group) has not been increased
in contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "(Pound)" means the lawful currency for the time being
of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a reference to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on
those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower
must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum
of Pound Sterling 1,000,000 and an integral multiple
of Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US $100,000;
or
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the
amounts agreed between the relevant Borrower and the
Bank before the telephone notice of Utilisation or
delivery of that Request; or
-10-
<PAGE> 11
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
-11-
<PAGE> 12
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
-12-
<PAGE> 13
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to
such Borrower pursuant to Clause 5.6 a principal
amount equal to the amount (if any) by which the New
Advance exceeds the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the
Bank pursuant to this Clause 8.1 a principal amount
equal to the
-13-
<PAGE> 14
amount by which the Maturing Advance exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date
-14-
<PAGE> 15
falling three months after the end of such period, together
with accrued interest thereon up to the date of payment and
all other amounts payable to the Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
-15-
<PAGE> 16
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
-16-
<PAGE> 17
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5 above
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the
-17-
<PAGE> 18
Original Sterling Amount of such new Advance denominated in such
Optional Currency shall be recalculated for the new Term in
accordance with the terms and conditions of this Agreement and if on
the relevant Utilisation Date the aggregate Original Sterling Amount
of all Advances outstanding on such date exceeds the Commitment, then
any excess shall be repaid to the Bank by the relevant Borrower upon
the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit
-18-
<PAGE> 19
and, without prejudice to the foregoing, the Bank is under no
obligation to claim a Tax Credit, or to claim a Tax Credit in
priority to any other claim, relief, credit or deduction available to
it. The Bank is not obliged to disclose any information regarding its
tax affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
-19-
<PAGE> 20
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in the
notification or (iii) elect for the Advance to be made in
accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business Days
of receipt of the notification, the Company and the Bank
shall enter into negotiations for a period of not more than
25 days with a view to agreeing a substitute basis for
determining the rate of interest and/or funding applicable
to the affected Advance and any future Advances in the
currency of the affected Advance provided that if no
substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not,
-20-
<PAGE> 21
shall forthwith give notice in writing to the Company of the date on
which the substitute basis will cease to apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
-21-
<PAGE> 22
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
-22-
<PAGE> 23
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
-23-
<PAGE> 24
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which
-24-
<PAGE> 25
would have a material adverse effect on the ability of the Company to
perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
-25-
<PAGE> 26
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
-26-
<PAGE> 27
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
-27-
<PAGE> 28
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due;or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent
not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
-28-
<PAGE> 29
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
-29-
<PAGE> 30
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of
(pound) *. The arrangement fee is payable within 30 days of the
Signing Date or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee on the average
daily amount of the unutilised Commitment during each period in
respect of which such fee is to be determined at the applicable rate
per annum specified below:
Average Daily Unutilised Commitment Commitment Fee
as a Percentage of the Commitment
50% - 100% *% p.a.
0% - 49% *% p.a.
19.3 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid quarterly in arrear. Accrued
commitment fee is also payable to the Bank on the cancelled amount of
the Commitment at the time the cancellation takes effect if the
Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
-30-
<PAGE> 31
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more
-31-
<PAGE> 32
than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount in
the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank
against any liability or loss which the Bank incurs as a
consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
-32-
<PAGE> 33
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the
-33-
<PAGE> 34
rights, powers or remedies conferred upon the Bank by this
Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
-34-
<PAGE> 35
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld or delayed) provided that such consent shall
not be required where the assignee or transferee is an Affiliate of
the Bank which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld
or delayed) any person with whom it is proposing to enter, or has
entered into, any kind of transfer, participation, sub-participation
or other agreement in relation to this Agreement:
26.1.1 a copy of this Agreement; and
-35-
<PAGE> 36
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
-36-
<PAGE> 37
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this purpose
to the other by not less than five Business Days'
notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
3rd Floor
54 Lombard Street
London EC3P 3AH
Attention: Steve Dawes
Facsimile No: 0171 699 3728
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the
-37-
<PAGE> 38
Bank a Borrower's Accession Notice duly executed by the Company and
the relevant Subsidiary provided that if such Subsidiary is not
resident in the United Kingdom for tax purposes the Company and the
Bank agree to make such amendments to this Agreement as may be
reasonably required at the time in order to allow such Subsidiary to
pay interest to the Bank without deduction or withholding of any
Relevant Tax and to provide such Subsidiary with equivalent rights,
mutatis mutandis, to those contained in Clause 11.4
(Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party
-38-
<PAGE> 39
hereto the right to cancel, rescind, terminate or vary (other than as
aforesaid) this Agreement in whole or in part or give rise to an
Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-39-
<PAGE> 40
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
BARCLAYS BANK PLC
By: /s/S.C. Dawes
S.C. Dawes
Relationship Director
-40-
<PAGE> 1
EXHIBIT (b)(3)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) MIDLAND BANK PLC of 27-32 Poultry, London EC2P 2BX (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any wholly
owned Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the principal
amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or the
obligation of the Bank to make Advances ceases pursuant to any of the
provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a document
or notice, a person who is authorised under the then current Board
Authority for Financial Transactions or such other mandate as may be
presented in its place to the Bank signed by any two Directors or one
Director and the Secretary of such Borrower, to give, execute or
despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot rate
of exchange for the purchase of the relevant Optional Currency in the
London foreign exchange market with Sterling at or about 11.00 a.m. on
that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to Clause
31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the form
set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount of
interest receivable by any member of the Group during such Relevant
Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet of
the Group, and those which are guaranteed by members of the Group to
the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks and the relevant financial markets are open for business in
London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 35,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or credited
as paid up on the issued share capital of the Company, plus the
aggregate amounts standing to the credit of the consolidated reserves
of the Group (including any share premium account or capital redemption
reserve fund and adding or deducting any balance standing to the credit
or debit of the consolidated profit and loss account of the Group and
including the consolidated portion of the reserves of associates) plus
any amount appearing in the consolidated balance sheet in respect of
deferred income relating to government grants, deferred taxation and
minority interests and less goodwill and other intangibles, all amounts
being construed in accordance with accounting principles generally
accepted in the United Kingdom and consistently applied;
"DEFAULT" means an Event of Default or an event which, with the giving
of notice, lapse of time, determination of materiality or fulfilment of
any other applicable condition (or any combination of the foregoing) in
each case as specified in Clause 18, would constitute an Event of
Default;
"DOLLARS" or "US $" means the lawful currency for the time being of the
United States of America;
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum at
which deposits in the relevant currency of the Advance appears on the
Telerate page 3750 (or such other relevant Telerate page as may be
appropriate to such currency) as of 11.00 a.m. on the applicable Rate
Fixing Date for a period equal to its Term and for delivery on the
first Business Day thereof, save that if such rate does not appear on
the Telerate page 3750 (or such other relevant page) then the rate per
annum at which deposits in the relevant currency and for the amount of
the Advance are offered to the Bank by leading banks in the London
Interbank Market at or about 11.00 a.m. on the applicable Rate Fixing
Date for a period equal to its Term and for delivery on the first
Business Day thereof (provided that where pursuant to Clause 12.2.3 the
interest rate for an Advance is to be fixed after 11.00 a.m., for the
purposes of this definition of "LIBOR", no rate shall be treated as
appearing on Telerate page 3750 (or such other relevant page) and the
time of "1.00 p.m." shall be substituted for the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of each
Advance of compliance with the Mandatory Cost requirements of the Bank
of England and the banking supervision costs of the Financial Services
Authority during the Term of that Advance, expressed as a rate per
annum and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
<PAGE> 4
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of companies
whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible Assets
of the Group as shown by a comparison of the latest audited balance
sheet of the Subsidiary (or, in the case of a Subsidiary within (ii),
its latest audited consolidated balance sheet) with the latest audited
consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at the
relevant time is freely transferable and convertible into Sterling and
deposits of which are readily available and freely dealt in on the
London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange on
the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any undertaking
or assets of a similar nature and of approximately equal or
higher value;
(ii) the sale of assets for cash where a sum approximately equal to
the net proceeds relating thereto has been applied in the
acquisition of assets (made during the period of 180 days
before the relevant sale) of a kind generally used by the
Group in its business operations;
<PAGE> 5
(iii) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(iv) disposals of any undertaking or assets to any other member of
the Group;
(v) disposals in the ordinary course of business; and
(vi) disposals of any undertaking or assets for fair market value
on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this Agreement
which has been disclosed in writing to the Bank prior to the
date hereof; or
(ii) any Security Interest which is created with the prior consent
of the Bank; or
(iii) any lien arising by operation of law in the ordinary course of
business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in the
ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title or
insurance policies and sale contracts in relation to such
goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was first
incurred; or
(vi) any Security Interest over or affecting any property or asset
acquired by a member of the Group after the date hereof and
subject to which such property or asset is acquired, but only
if (a) such Security Interest was not created in contemplation
of the acquisition of such property or asset by a member of
the Group, (b) the amount thereby secured has not been
increased in contemplation of, or since the date of, the
acquisition of such property or asset by a member of the Group
and (c) such Security Interest is discharged to the
satisfaction of the Bank within 12 months of the acquisition
of the property or asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to the
date on which such company becomes a member of the Group but
only if (a) such Security Interest was not created in
contemplation of such company becoming a member of the Group,
(b) the amount thereby secured
<PAGE> 6
(save any overdrawn amount on the current account of any such
company within the terms (in existence on the date when the
company becomes a member of the Group) of an overdraft (or
other equivalent) facility granted to such company prior to
its becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company becoming
a member of the Group and (c) (save for any Security Interest
created before the date of such company becoming a member of
the Group, over any freehold or leasehold property solely for
the purpose of securing borrowings incurred to acquire such
property) such Security Interest is discharged to the
satisfaction of the Bank within 12 months of such company
becoming a member of the Group; or
(viii) any Security Interest created after the date hereof over any
freehold or leasehold property of a member of the Group solely
for the purpose of securing borrowings incurred to acquire
such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or in
connection with some other similar financing to which the Bank
has previously consented; or
(x) any Security Interest created in substitution for any Security
Interest permitted pursuant to this definition provided that
the substituted Security Interest is over the same asset and
the principal amount secured does not exceed the principal
amount secured on such asset prior to the substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to any
member of the Group in the ordinary course of its business by
virtue of any retention of title provisions contained in the
relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing, in
aggregate, an amount not exceeding at any time an amount equal
to 10% of the Consolidated Tangible Net Worth at such time or
if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the Income
and Corporation Taxes Act 1988 (or any statutory re-enactment or
modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
<PAGE> 7
(ii) in relation to an Advance denominated in an Optional Currency,
the second Business Day before its Utilisation Date;
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and the
first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" or "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing Costs"
and "Operating Profit" means any company whose accounts are
consolidated with the accounts of the Company in accordance
with accounting principles generally accepted under accounting
standards of the UK; and
(ii) for any other purpose has the meaning given to it by Section
736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate amount
of any current and fixed assets of that company as shown in its latest
audited balance sheet or, in the case of a company which is a holding
company of a group of companies, its latest audited consolidated
balance sheet but excluding any amount attributable to goodwill,
intellectual property or other intangible assets of whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into force
on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
<PAGE> 8
"UTILISATION" means all Advances made or to be made hereunder following
the giving by a Borrower of a Request for these Advances; and
"UTILISATION DATE" means the date for the making of the Advance(s).
<PAGE> 9
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing, registration
and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank is
accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day
in the next calendar month except that, if there is no
numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in
that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736 of
the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this Agreement
under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or a
schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless otherwise
stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
<PAGE> 10
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between the
substantive provisions of this Agreement and the contents thereof, the
substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period and
when requested by a Borrower, make to such Borrower Advances upon and
subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies and
Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of the
proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
<PAGE> 11
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date for
that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on those
dates are correct and will be correct immediately after
the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall facility
limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under the
Revolving Multi-Currency Credit Facility Agreement dated
17th May 1993 (as amended) made between the Company and
the Bank the "Existing Outstandings", shall have been
repaid or prepaid in full and the aggregate commitments
under such facility agreement cancelled on the day of
such repayment or prepayment; or
(b) the amount of the first Utilisation together with other
sums available to the Borrower shall be used to repay or
prepay the Existing Outstandings and the aggregate
commitments under such facility agreement cancelled on
the day of such repayment or prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by
<PAGE> 12
the Bank not later than the close of business in London on the day on
which such telephone notice is, or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested Amount
is:
(a) if the currency is Sterling, a minimum of Pound Sterling
1,000,000 and an integral multiple of Pound Sterling
100,000; or
(b) if the currency is Dollars, a minimum of US $1,000,000
and an integral multiple of US $100,000; or
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the amounts
agreed between the relevant Borrower and the Bank before
the telephone notice of Utilisation or delivery of that
Request; or
(d) such other amounts as the Bank and the relevant Borrower
may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an optional
duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it may
also select at the time of the telephone notice of Utilisation and in
the relevant Request a Term of any approved duration to apply if the
selection of a Term of an optional duration becomes ineffective in
accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional duration;
and
<PAGE> 13
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m. on
the date of receipt by it of the relevant Request or telephone
notice of Utilisation pursuant to Clause 5.1 or Clause 5.2
respectively that it does not agree to that request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the Advance
available to the relevant Borrower on the relevant Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business on
the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective; and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
<PAGE> 14
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling six
months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the overdue
amount is an Advance (or part thereof) and only for the period
up to and including the Maturity Date of that Advance); and
7.3.2 the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted an Advance
in the currency of the overdue amount for such successive
Terms of such duration (not exceeding three months) as the
Bank may reasonably determine (each a "DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term, as
appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from whatever
sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated Term
until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE")
<PAGE> 15
in the same currency is due to be repaid by such Borrower then, subject
to the terms of this Agreement and so long as the conditions referred
to in Clause 4.2 shall have been satisfied in relation to the New
Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is equal
to or greater than the Maturing Advance) or in part (if the
New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited to
the account of such Borrower by the Bank in accordance with
the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to such
Borrower pursuant to Clause 5.6 a principal amount equal
to the amount (if any) by which the New Advance exceeds
the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the Bank
pursuant to this Clause 8.1 a principal amount equal to
the amount by which the Maturing Advance exceeds the New
Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums (if
any) then owing under this Agreement shall in any event be repaid or
paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15 days'
prior notice to the Bank, prepay all or any part of an Advance, but if
in part, in a minimum amount of Pound Sterling 1,000,000 and an
integral multiple of Pound Sterling 100,000 (or the comparable amount
in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or in
concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the purpose
of this Clause a single person or group of persons shall have acquired
control if it or they own or hold more than 50% (fifty per cent.) of
the issued share capital of the Company having the right to attend and
vote at general meetings of the Company or more than 50% (fifty per
cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank;
8.5.2 whereupon, unless the Bank otherwise agrees, the Facility
shall be cancelled and all outstanding Advances shall be
repaid on or before
<PAGE> 16
the date falling 30 days after the date the Bank receives the
notification from the Company referred to in sub-clause 8.5.1
together with accrued interest thereon up to the date of
payment and all other amounts payable to the Bank hereunder.
8.6 Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid together with any amount payable to the
Bank pursuant to Clause 22.3.
8.7 No Advance may be prepaid otherwise than in accordance with the express
terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this Agreement
shall be made to such account at such office or bank in the principal
financial centre of the relevant currency as it may notify the other or
to such other place as may be agreed between the parties for this
purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the place
for payment on the due date in lawful money of the country of
that Optional Currency, in immediately available funds, or at
such times or in such funds as the Bank may specify to the
relevant Borrower as being customary at the time for the
settlement of transactions in the relevant currency in the
place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
<PAGE> 17
9.6 Subject to clause 9.7, on and after the Commencement Date, any Advance
requested to be denominated in the currency of a Participating Member
State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit of
a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor, can
be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal under
this Agreement pursuant to Clause 9.9 above interest is payable on the
principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement, the
Bank shall apply that payment towards the obligations of such Borrower
under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due but
unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but unpaid
under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5 above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
<PAGE> 18
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional Currency
unless the Bank has confirmed to such Borrower that the Optional
Currency is readily available and freely transferable in the London
foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene any
law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m. on
that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the Advance
will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling Amount
promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the new
Term in accordance with the terms and conditions of this Agreement and
if on the relevant Utilisation Date the aggregate Original Sterling
Amount of all Advances outstanding on such date exceeds the Commitment,
then any excess shall be repaid to the Bank by the relevant Borrower
upon the Bank's first written demand.
<PAGE> 19
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without deduction
for or on account of any Relevant Taxes except to the extent that any
Borrower is required by law to make payment subject to any such taxes.
If any Relevant Tax or amounts in respect of any Relevant Tax must be
deducted from any amounts payable or paid by any Borrower hereunder,
such Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount
which it would have received had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any other
jurisdiction from which, or through which, such payment is made or to
the taxation laws of which the relevant Borrower is at the time of such
payment subject, (iii) any political sub-division of the United Kingdom
or any such other jurisdiction or (iv) any federation or association of
states of which the United Kingdom or any such other jurisdiction is,
at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall be
paid by such Borrower when due (unless the obligation to pay is being
disputed in good faith) and such Borrower shall, within 30 days of the
payment being made, deliver to the Bank evidence satisfactory to the
Bank (including all relevant tax receipts) that the payment has been
duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the foregoing,
the Bank is under no obligation to claim a Tax Credit, or to claim a
Tax Credit in priority to any other claim, relief, credit or deduction
available to it. The Bank is not obliged to disclose any information
regarding its tax affairs or computations to any Borrower.
<PAGE> 20
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any law
or regulation or any practice or concession of the Inland Revenue after
the Signing Date, the Bank ceases to be a Qualifying Bank no Borrower
shall be liable to pay to the Bank under Clause 11.1 (Gross-up) any
amount in respect of taxes levied or imposed by the UK or any taxing
authority thereof or therein in excess of the amount it would have been
obliged to pay if the Bank had been or had not ceased to be a
Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for the
purposes of determining the applicable LIBOR or the Bank
otherwise determines that adequate and fair means do not exist
for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon as
is practicable thereafter on the Rate Fixing Day of the fact
and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance shall
be made in Sterling in an amount equal to its Original
Sterling Amount (unless Sterling was the original currency of
the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected Advance
may be delivered until the Bank notifies the Company that the
event specified in the notification no longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00 a.m.
(or, if later, within 30 minutes of receipt by the Company of
a notification under sub-Clause 12.1.2) on the Rate Fixing
Day: (i) elect for the
<PAGE> 21
notice of Utilisation by telephone or the Request to be
cancelled without penalty; (ii) if the Advance was to be made
in an Optional Currency, elect for the Advance to be made in
an Optional Currency other than a currency affected by the
event specified in the notification or (iii) elect for the
Advance to be made in accordance with the Request
notwithstanding the event specified in the notification. If
any Borrower requires an affected Advance to be made in the
original currency selected for such Advance notwithstanding
the event specified in the notification then within five
Business Days of receipt of the notification, the Company and
the Bank shall enter into negotiations for a period of not
more than 25 days with a view to agreeing a substitute basis
for determining the rate of interest and/or funding applicable
to the affected Advance and any future Advances in the
currency of the affected Advance provided that if no
substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such certificate
to be conclusive) the alternative interest rate
calculated in accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the
then current Term; and
(c) the certificate shall be binding on each relevant
Borrower unless the Company gives notice to the Bank
within five Business Days of the receipt of the
certificate that the certificate is not acceptable and
that each relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in the
notice, which shall be not less than five nor more than
thirty days after the date of the Bank's certificate to
the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the last day
of its Term, as being the cost to the Bank of funding the
Advance from such other sources as it may reasonably
select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation to
a particular currency, the Bank shall periodically determine whether
the circumstances referred to in Clause 12.1 above still apply and, if
they do not, shall forthwith give notice in writing to the Company of
the date on which the substitute basis will cease to apply.
<PAGE> 22
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or regulation
after the Signing Date, or of any change in the application or
interpretation of any such changed law or regulation or compliance by
the Bank with any such changed law or regulation after the Signing Date
(including, without limitation, any law or regulation relating to
taxation, any reserve, special deposit, cash ratio, liquidity or
capital adequacy requirement or any form of banking or monetary control
but excluding (i) changes arising from the implementation by any
authority having jurisdiction over the Bank or its holding company of
the matters set out in the statement prepared by the Basle Committee on
Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising from
the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the Bank
will promptly notify the Company of the relevant event and the Company
shall on demand pay to the Bank such amount as the Bank certifies in
the demand will compensate it for the applicable increased cost.
13.2 In this Clause 13 "increased cost" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances comprised
in a class of advances formed by or including the Advances
made or to be made by it under this Agreement as is
attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the effective
return to the Bank under this Agreement or on its capital; or
13.2.4 any payment made or interest or other return on or calculated
by reference to any amount received or receivable by the Bank
under this Agreement which is forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
<PAGE> 23
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall
net income of the Bank (or the overall net income of a
division or branch of the Bank) imposed in the jurisdiction in
which its principal office or the relevant lending office for
the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time
of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the assigning,
transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain
any Advance, then the Bank shall notify the Company accordingly and on
the Maturity Date of each relevant Advance (or such earlier date as the
relevant law or directive may require) the relevant Borrower shall
repay or prepay, as the case may be, any Advances made to it by the
Bank together with all other amounts payable by it to the Bank under
this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation in
relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made to
it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
<PAGE> 24
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13 (Increased
Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably open
to it to mitigate or remove those circumstances (including seeking
recovery for the account of the relevant Borrower where reasonably
practicable and/or transferring its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this Agreement
(including, without limitation, under the Clauses referred to
in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
<PAGE> 25
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any judicial
order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by, this
Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they were
drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to
the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the UK
consistently applied or if not consistently applied
together with details of the changes in such application;
and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the consolidated
financial condition of the companies comprising the Group
as at the date to which they were drawn up, and the
results of its consolidated operations for the year ended
on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts
were drawn up which would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement.
<PAGE> 26
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive
the execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and warranties
set out in Clauses 16.2 to 16.10 shall be deemed to be repeated by the
Company and the relevant Borrower on the date of each Request made by
such Borrower and the date of each Utilisation made to such Borrower
with reference to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this Agreement
or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within 180
days of the end of each of its financial years) the audited
consolidated accounts of the Group for that financial year;
17.2.2 as soon as the same are available (and in any event within 150
days of the end of the first half-year of each of its
financial years) the interim statement of the Company for that
half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable detail
showing the bases for the list; and
<PAGE> 27
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of Consolidated
Tangible Net Worth (as shown in the latest audited accounts of
the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per
cent. of Consolidated Tangible Net Worth (as shown in the
latest audited accounts of the Group),
<PAGE> 28
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "net book value" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than 3
to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not a
Borrower it will only be an Event of Default if the event is, in the
reasonable opinion of the Bank, reasonably likely to affect materially
and adversely the Company's ability to perform its obligations under
this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable
by it under this Agreement at the place at and in the currency in which
it is expressed to be payable and the default is not remedied within
seven Business Days after the Bank gives notice to the Company and the
relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case of
a breach capable of being remedied) fails to remedy the breach within
fourteen Business Days after the date on which the Company and the
relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
<PAGE> 29
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand as
a result of an event of default (howsoever described) under
the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due or
to be insolvent, or admits inability to pay its debts generally as they
fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all or
any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
<PAGE> 30
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened
to consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a meeting)
is taken with a view to a composition, assignment or
arrangement with any creditors of, or the rehabilitation,
administration, custodianship, liquidation, or dissolution of,
any Borrower or Material Subsidiary or any other insolvency
proceedings involving any Borrower or Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material Subsidiary
becomes subject to or enters into any of the foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary or
any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent not to
be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect
of any Borrower or Material Subsidiary or any substantial part of its
assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint such
a receiver or manager.
CREDITORS' process
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound Sterling
1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of
<PAGE> 31
those mentioned in Clauses 18.6 to 18.11 (inclusive) in particular
without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or
any other applicable United States federal or state
bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower
or Material Subsidiary in an involuntary case under the United
States federal bankruptcy laws, as now or hereafter
constituted, or any other applicable United States federal or
state bankruptcy, insolvency or other similar law and such
decree or order shall continue unstayed and in effect for a
period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry on
all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued interest,
and all other amounts accrued under this Agreement, be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand, whereupon
they shall immediately become payable on demand together with
all other amounts accrued under this Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound Sterling
*. The arrangement fee is payable within 30 days of the Signing Date or
(if earlier) the date of the first Utilisation.
<PAGE> 32
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the average
daily amount of the unutilised Commitment during each period in respect
of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each six
month period with the first such period commencing on the Signing Date
and the last such period (adjusted as appropriate) ending on the Final
Maturity Date and shall be paid in arrear on the last day of each such
period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax
or any other tax which might be chargeable in connection with that fee.
If any value added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by the Company
and relating to this Agreement or a document referred to
herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an Event
of Default.
<PAGE> 33
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"contractual currency") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or as a
result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
less than the amount owed in the contractual currency, the
relevant Borrower shall, forthwith on demand, pay to the Bank
an amount in the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any such
conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
more than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount in
the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in which
it is expressed to be payable.
OTHER INDEMNITIES
<PAGE> 34
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received
from any source otherwise than on its Maturity Date and, for
the purposes of this sub-Clause 22.3.3, the Maturity Date of
an overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower has
delivered a notice of Utilisation by telephone or a Request
(save where such notice or Request is expressly permitted to
be cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees
to pay to the Bank from time to time on demand any and every
sum or sums of money which each Borrower shall at any time be
liable to pay to the Bank under or pursuant to this Agreement
and which shall not have been paid at the time such demand is
made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from time
to time on demand by the Bank from and against any loss
incurred by the Bank as a result of any of the obligations of
each Borrower under or pursuant to this Agreement becoming
void, voidable, unenforceable or ineffective as against each
such Borrower for any reason whatsoever, whether or not known
to the Bank, the amount of such loss being the amount which
the person or persons suffering it would otherwise have been
entitled to recover from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
<PAGE> 35
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all
or any of the obligations of the Borrowers under this Agreement and
shall continue in full force and effect until final payment in full of
all amounts owing by the Borrowers thereunder and total satisfaction of
all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise affected
by:
22.7.1 the winding-up, dissolution, administration or re-organisation
of any Borrower or any other person or any change in its
status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be granted
to any Borrower in respect of its obligations hereunder or
under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver of
or release of any obligation of any Borrower hereunder or
under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in respect
of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers or
remedies conferred upon the Bank by this Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or
any other person being avoided or reduced by virtue of any provisions
or enactments relating to bankruptcy, insolvency, liquidation or
similar laws of general application for the time being in force and, if
any such security or payment is so avoided or reduced, the Bank shall
be entitled to recover the
<PAGE> 36
value or amount of such security or payment from the Company
subsequently as if such settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against any
other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank hereunder
or of any other security taken pursuant to, or in connection
with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which it
relates.
CALCULATIONS
<PAGE> 37
23.3 Interest (including any applicable Mandatory Cost) and the fee payable
pursuant to Clause 19.2 (Commitment Fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year
of 365 days, or, in the case of interest payable on an amount
denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on behalf
of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement without
the prior written consent of the Company (such consent not to be
unreasonably withheld) provided that such consent shall not be required
where the assignee or transferee is an Affiliate of the Bank which is a
Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer, participation,
sub-participation or other agreement in relation to this Agreement it
shall notify the Company in advance of its intention and of the
identity of the proposed transferee, participant, sub-participant or
other party to such agreement and the amount of the proposed transfer,
participation, sub participation, or other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into, any
kind of transfer, participation, sub-participation or other agreement
in relation to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but only
if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
<PAGE> 38
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the
Bank's Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a
<PAGE> 39
Request is by facsimile the Bank will give telephone
confirmation of such receipt as specified in the Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that
place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for all
notices under, or in connection with, this Agreement, is:
(a) that notified by that Party for this purpose to the other
Party; or
(b) any other notified by that Party for this purpose to the
other by not less than five Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
27-32 Poultry London EC2P 2BX
Attention: Phil Mills
Telex: 888401
Facsimile No: 0171 260 4227
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering or
procuring the delivery to the Bank a Borrower's Accession Notice duly
executed by the Company and the relevant Subsidiary provided that if
such Subsidiary is not resident in the United Kingdom for tax purposes
the Company and the Bank agree to make such amendments to this
Agreement as may be reasonably required at the time in
<PAGE> 40
order to allow such Subsidiary to pay interest to the Bank without
deduction or withholding of any Relevant Tax and to provide such
Subsidiary with equivalent rights, mutatis mutandis, to those contained
in Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has
confirmed to the Company that it has received, in form and substance
satisfactory to it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of such
notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country
shall be translated into, or paid in, the currency unit of
that country designated by the Bank acting reasonably and in
consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be at
the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Bank acting
reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of it
and the new currency and to put the Bank and the Borrowers in the same
position, so far as is possible, that they would have been in if no
change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new currency
in all or any part of the European Union will not result in the
discharge cancellation, rescission or termination in whole or in pat of
this Agreement or give any party hereto the right to cancel, rescind,
terminate or vary (other than as aforesaid) this Agreement in whole or
in part or give rise to an Event of Default.
<PAGE> 41
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken together
shall be delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on its
behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in Clause
34.2 shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of
this Agreement.
<PAGE> 42
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
MIDLAND BANK plc
By: /s/Philip Mills
Philip Mills
<PAGE> 1
EXHIBIT (b)(4)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) NATIONAL WESTMINSTER BANK PLC of 41 Lothbury, London EC2P 2BP (the
"BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Company;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or
Holding Company of that person and any other Subsidiary of that
Holding Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 30,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
<PAGE> 3
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
<PAGE> 4
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(iii) disposals of any undertaking or assets to any other member
of the Group;
<PAGE> 5
(iv) disposals in the ordinary course of business; and
(v) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the company
becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company
becoming a member of the Group
<PAGE> 6
and (c) (save for any Security Interest created before the
date of such company becoming a member of the Group, over
any freehold or leasehold property solely for the purpose
of securing borrowings incurred to acquire such property)
such Security Interest is discharged to the satisfaction of
the Bank within 12 months of such company becoming a member
of the Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the
time being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
<PAGE> 8
"UTILISATION DATE" means the date for the making of the Advance(s).
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
<PAGE> 9
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
<PAGE> 10
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under
the Revolving Multi-Currency Credit Facility
Agreement dated 14th May 1993 (as amended) made
between the Company and the Bank, the "Existing
Outstandings", shall have been repaid or prepaid
in full and the aggregate commitments under such
facility agreement cancelled on the day of such
repayment or prepayment; or
(b) the amount of the first Utilisation together
with other sums available to the Borrower shall
be used to repay or prepay the Existing
Outstandings and the aggregate commitments under
such facility agreement cancelled on the day of
such repayment or prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by
<PAGE> 11
the Bank not later than the close of business in London on the day on
which such telephone notice is, or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of
Pound Sterling 1,000,000 and an integral
multiple of Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
<PAGE> 12
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be instated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
<PAGE> 13
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE")
<PAGE> 14
in the same currency is due to be repaid by such Borrower then,
subject to the terms of this Agreement and so long as the conditions
referred to in Clause 4.2 shall have been satisfied in relation to
the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the amount by which the Maturing
Advance exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
<PAGE> 15
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of
such period, together with accrued interest thereon up to
the date of payment and all other amounts payable to the
Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
<PAGE> 16
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
<PAGE> 17
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
<PAGE> 18
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay
<PAGE> 19
such additional amounts as may be necessary to ensure that the Bank
receives a net amount equal to the full amount which it would have
received had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief, credit
or deduction available to it. The Bank is not obliged to disclose any
information regarding its tax affairs or computations to any
Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
<PAGE> 20
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in
the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business
Days of receipt of the notification, the Company and the
Bank shall enter into negotiations for a period of not more
than 25 days with a view to agreeing a substitute basis for
determining the rate
<PAGE> 21
of interest and/or funding applicable to the affected
Advance and any future Advances in the currency of the
affected Advance provided that if no substitute basis is
agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any
<PAGE> 22
authority having jurisdiction over the Bank or its holding company of
the matters set out in the statement prepared by the Basle Committee
on Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and
Capital Standards" (as amended in November 1991) and (ii) changes
arising from the implementation in whole or in part by any authority
having jurisdiction over the Bank or its holding company of the
proposals contained in the matters set out in the EC Directive
93/6/EEC of 15 March 1993 on the capital adequacy of investment firms
and credit institutions) is that the Bank incurs an increased cost,
then the Bank will promptly notify the Company of the relevant event
and the Company shall on demand pay to the Bank such amount as the
Bank certifies in the demand will compensate it for the applicable
increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the
<PAGE> 23
Parties), but only to the extent that the increased cost
would not have been payable to the assigning, transferring
or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
<PAGE> 24
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
<PAGE> 25
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the
<PAGE> 26
relevant Borrower on the date of each Request made by such Borrower
and the date of each Utilisation made to such Borrower with reference
to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
<PAGE> 27
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
<PAGE> 28
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
<PAGE> 29
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such
consent not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
<PAGE> 30
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
<PAGE> 31
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of
Pound Sterling *. The arrangement fee is payable within 30 days
of the Signing Date or (if earlier) the date of the first
Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period
in respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid in arrear on the last day of
each such period. Accrued commitment fee is also payable to the Bank
on the cancelled amount of the Commitment at the time the
cancellation takes effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
<PAGE> 32
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more than the amount owed in the contractual currency
the Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
<PAGE> 33
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
<PAGE> 34
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers
or remedies conferred upon the Bank by this Agreement or by
law.
<PAGE> 35
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
<PAGE> 36
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person
<PAGE> 37
with whom it is proposing to enter, or has entered into, any kind of
transfer, participation, sub-participation or other agreement in
relation to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
<PAGE> 38
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
<PAGE> 39
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
6th Floor,
1 Princes Street
London EC2R 8PB
Attention: Seamus Toal
Facsimile No: 0171 390 1797
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company
<PAGE> 40
becomes an Acceding Borrower by delivering or procuring the delivery
to the Bank a Borrower's Accession Notice duly executed by the
Company and the relevant Subsidiary provided that if such Subsidiary
is not resident in the United Kingdom for tax purposes the Company
and the Bank agree to make such amendments to this Agreement as may
be reasonably required at the time in order to allow such Subsidiary
to pay interest to the Bank without deduction or withholding of any
Relevant Tax and to provide such Subsidiary with equivalent rights,
mutatis mutandis, to those contained in Clause 11.4 (Qualifying
Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any
<PAGE> 41
part of the European Union will not result in the discharge
cancellation, rescission or termination in whole or in pat of this
Agreement or give any party hereto the right to cancel, rescind,
terminate or vary (other than as aforesaid) this Agreement in whole
or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
<PAGE> 42
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
<PAGE> 43
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
NATIONAL WESTMINSTER BANK Plc
By: /s/Seamus Toal
Seamus Toal
Corporate Manager
<PAGE> 1
EXHIBIT (b)(5)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) ROYAL BANK OF CANADA EUROPE LIMITED of 71 Queen Victoria Street, London
EC4V 4DE (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a Borrower's
Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the principal
amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or the
obligation of the Bank to make Advances ceases pursuant to any of the
provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a document
or notice, a person who is authorised under the then current Board
Authority for Financial Transactions or such other mandate as may be
presented in its place to the Bank signed by any two Directors or one
Director and the Secretary of such Borrower, to give, execute or
despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot rate
of exchange for the purchase of the relevant Optional Currency in the
London foreign exchange market with Sterling at or about 11.00 a.m. on
that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to Clause
31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the form
set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount of
interest receivable by any member of the Group during such Relevant
Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet of
the Group, and those which are guaranteed by members of the Group to
the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks and the relevant financial markets are open for business in
London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 25,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or credited
as paid up on the issued share capital of the Company, plus the
aggregate amounts standing to the credit of the consolidated reserves
of the Group (including any share premium account or capital redemption
reserve fund and adding or deducting any balance standing to the credit
or debit of the consolidated profit and loss account of the Group and
including the consolidated portion of the reserves of associates) plus
any amount appearing in the consolidated balance sheet in respect of
deferred income relating to government grants, deferred taxation and
minority interests and less goodwill and other intangibles, all amounts
being construed in accordance with accounting principles generally
accepted in the United Kingdom and consistently applied;
"DEFAULT" means an Event of Default or an event which, with the giving
of notice, lapse of time, determination of materiality or fulfilment of
any other applicable condition (or any combination of the foregoing) in
each case as specified in Clause 18, would constitute an Event of
Default;
"DOLLARS" or "US $" means the lawful currency for the time being of the
United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum at
which deposits in the relevant currency of the Advance appears on the
Telerate page 3750 (or such other relevant Telerate page as may be
appropriate to such currency) as of 11.00 a.m. on the applicable Rate
Fixing Date for a period equal to its Term and for delivery on the
first Business Day thereof, save that if such rate does not appear on
the Telerate page 3750 (or such other relevant page) then the rate per
annum at which deposits in the relevant currency and for the amount of
the Advance are offered to the Bank by leading banks in the London
Interbank Market at or about 11.00 a.m. on the applicable Rate Fixing
Date for a period equal to its Term and for delivery on the first
Business Day thereof (provided that where pursuant to Clause 12.2.3 the
interest rate for an Advance is to be fixed after 11.00 a.m., for the
purposes of this definition of "LIBOR", no rate shall be treated as
appearing on Telerate page 3750 (or such other relevant page) and the
time of "1.00 p.m." shall be substituted for the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of each
Advance of compliance with the Mandatory Cost requirements of the Bank
of England and the banking supervision costs of the Financial Services
Authority during the Term of that Advance, expressed as a rate per
annum and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of companies
whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible Assets
of the Group as shown by a comparison of the latest audited balance
sheet of the Subsidiary (or, in the case of a Subsidiary within (ii),
its latest audited consolidated balance sheet) with the latest audited
consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at the
relevant time is freely transferable and convertible into Sterling and
deposits of which are readily available and freely dealt in on the
London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in Sterling,
its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange on the
Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any undertaking or
assets of a similar nature and of approximately equal or higher
value;
(ii) the sale of assets for cash and the application within a period
of 180 days, of a sum approximately equal to the net proceeds
relating thereto, in the acquisition of assets of a kind
generally used by the Group in its business operations;
(iii) the sale of assets for cash where a sum approximately equal to
the net proceeds relating thereto has been applied in the
acquisition of assets (made during the period of 180 days before
the relevant sale) of a kind generally used by the Group in its
business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member of
the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market value on
arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this Agreement
which has been disclosed in writing to the Bank prior to the
date hereof; or
(ii) any Security Interest which is created with the prior consent of
the Bank; or
(iii) any lien arising by operation of law in the ordinary course of
business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in the
ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title or
insurance policies and sale contracts in relation to such goods,
arising in the ordinary course of business in connection with
letters of credit and similar transactions where such Security
Interest secures only so much of the acquisition cost of such
goods which is required to be paid within 180 days after the
date upon which the sale was first incurred; or
(vi) any Security Interest over or affecting any property or asset
acquired by a member of the Group after the date hereof and
subject to which such property or asset is acquired, but only if
(a) such Security Interest was not created in contemplation of
the acquisition of such property or asset by a member of the
Group, (b) the amount thereby secured has not been increased in
contemplation of, or since the date of, the acquisition of such
property or asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank within 12
months of the acquisition of the property or asset in question;
or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to the
date on which such company becomes a member of the Group but
only if (a) such Security Interest was not created in
contemplation of such company becoming a member of the Group,
(b) the amount thereby secured (save any overdrawn amount on the
current account of any such company within the terms (in
existence on the date when the
-5-
<PAGE> 6
company becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company becoming a
member of the Group and (c) (save for any Security Interest
created before the date of such company becoming a member of the
Group, over any freehold or leasehold property solely for the
purpose of securing borrowings incurred to acquire such
property) such Security Interest is discharged to the
satisfaction of the Bank within 12 months of such company
becoming a member of the Group; or
(viii) any Security Interest created after the date hereof over any
freehold or leasehold property of a member of the Group solely
for the purpose of securing borrowings incurred to acquire such
property; or
(ix) any Security Interests created or continuing in connection with
an issue of industrial revenue or development bonds or in
connection with some other similar financing to which the Bank
has previously consented; or
(x) any Security Interest created in substitution for any Security
Interest permitted pursuant to this definition provided that the
substituted Security Interest is over the same asset and the
principal amount secured does not exceed the principal amount
secured on such asset prior to the substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to any
member of the Group in the ordinary course of its business by
virtue of any retention of title provisions contained in the
relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing, in
aggregate, an amount not exceeding at any time an amount equal
to 10% of the Consolidated Tangible Net Worth at such time or if
greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the Income
and Corporation Taxes Act 1988 (or any statutory re-enactment or
modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional Currency,
the second Business Day before its Utilisation Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and the
first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing Costs"
and "Operating Profit" means any company whose accounts are
consolidated with the accounts of the Company in accordance with
accounting principles generally accepted under accounting
standards of the UK; and
(ii) for any other purpose has the meaning given to it by Section 736
of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate amount
of any current and fixed assets of that company as shown in its latest
audited balance sheet or, in the case of a company which is a holding
company of a group of companies, its latest audited consolidated
balance sheet but excluding any amount attributable to goodwill,
intellectual property or other intangible assets of whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into force
on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder following
the giving by a Borrower of a Request for these Advances; and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding
day in the next calendar month except that, if there is no
numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day
in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736 of
the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this Agreement
under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or a
schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless otherwise
stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between the
substantive provisions of this Agreement and the contents thereof, the
substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period and
when requested by a Borrower, make to such Borrower Advances upon and
subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies and
Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of the
proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date for
that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on those
dates are correct and will be correct immediately after
the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall facility
limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under the
Revolving Multi-Currency Credit Facility Agreement dated
14th May 1993 (as amended) made between the Company and
the Bank, the "Existing Outstandings", shall have been
repaid or prepaid in full and the aggregate commitments
under such facility agreement cancelled on the day of
such repayment or prepayment; or
(b) the amount of the first Utilisation together with other
sums available to the Borrower shall be used to repay or
prepay the Existing Outstandings and the aggregate
commitments under such facility agreement cancelled on
the day of such repayment or prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close of
business in London on the day on which such telephone notice is, or is
deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
-10-
<PAGE> 11
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested Amount
is:
(a) if the currency is Sterling, a minimum of Pound Sterling
1,000,000 and an integral multiple of Pound Sterling
100,000; or
(b) if the currency is Dollars, a minimum of US $1,000,000
and an integral multiple of US $100,000; or
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the amounts
agreed between the relevant Borrower and the Bank before
the telephone notice of Utilisation or delivery of that
Request; or
(d) such other amounts as the Bank and the relevant Borrower
may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an optional
duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it may
also select at the time of the telephone notice of Utilisation and in
the relevant Request a Term of any approved duration to apply if the
selection of a Term of an optional duration becomes ineffective in
accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m. on
the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
-11-
<PAGE> 12
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the Advance
available to the relevant Borrower on the relevant Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business on
the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling six
months after its Utilisation Date.
-12-
<PAGE> 13
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted an Advance
in the currency of the overdue amount for such successive
Terms of such duration (not exceeding three months) as the
Bank may reasonably determine (each a "DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term, as
appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from whatever
sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated Term
until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part (if
the New Advance is less than the Maturing Advance); and
-13-
<PAGE> 14
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited to
the account of such Borrower by the Bank in accordance with
the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to such
Borrower pursuant to Clause 5.6 a principal amount equal
to the amount (if any) by which the New Advance exceeds
the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the Bank
pursuant to this Clause 8.1 a principal amount equal to
the amount by which the Maturing Advance exceeds the New
Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums (if
any) then owing under this Agreement shall in any event be repaid or
paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15 days'
prior notice to the Bank, prepay all or any part of an Advance, but if
in part, in a minimum amount of Pound Sterling 1,000,000 and an
integral multiple of Pound Sterling 100,000 (or the comparable amount
in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or in
concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the purpose
of this Clause a single person or group of persons shall have acquired
control if it or they own or hold more than 50% (fifty per cent.) of
the issued share capital of the Company having the right to attend and
vote at general meetings of the Company or more than 50% (fifty per
cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of the
Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested falls
on a date not more than three months after the expiration of
the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company, the Bank shall consult with
the Company during the period of 30 days after receipt of the
notification from the Company referred to in sub-Clause 8.5.1 and shall
be entitled to give notice of
-14-
<PAGE> 15
continuance of the Facility provided hereunder to the Company. Upon
receipt of such notice of continuance, the right of the Borrowers to
request an Advance without the limitation referred to in sub-Clause
8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company but, at the end of the period
of 30 days referred to in Clause 8.6 above, the Company has not
received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of
such period, together with accrued interest thereon up to the
date of payment and all other amounts payable to the Bank
hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall be
repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the Bank
shall have confirmed within 2 days of receipt of the notice referred to
in sub-Clause 8.5.1 that the Facility shall be continued, the Facility
shall be cancelled and any outstanding Advances shall be repayable on
demand by the Bank together with accrued interest thereon up to the
date of payment and all other amounts payable to the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid together with any amount payable to the
Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the express
terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this Agreement
shall be made to such account at such office or bank in the principal
financial centre of the relevant currency as it may notify the other or
to such other place as may be agreed between the parties for this
purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
-15-
<PAGE> 16
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the place
for payment on the due date in lawful money of the country of
that Optional Currency, in immediately available funds, or at
such times or in such funds as the Bank may specify to the
relevant Borrower as being customary at the time for the
settlement of transactions in the relevant currency in the
place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any Advance
requested to be denominated in the currency of a Participating Member
State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit of
a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor, can
be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal under
this Agreement pursuant to Clause 9.9 above interest is payable on the
principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement, the
Bank shall apply that payment towards the obligations of such Borrower
under this Agreement in the following order:
-16-
<PAGE> 17
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5 above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional Currency
unless the Bank has confirmed to such Borrower that the Optional
Currency is readily available and freely transferable in the London
foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m. on
that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling Amount.
-17-
<PAGE> 18
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling Amount
promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the new
Term in accordance with the terms and conditions of this Agreement and
if on the relevant Utilisation Date the aggregate Original Sterling
Amount of all Advances outstanding on such date exceeds the Commitment,
then any excess shall be repaid to the Bank by the relevant Borrower
upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without deduction
for or on account of any Relevant Taxes except to the extent that any
Borrower is required by law to make payment subject to any such taxes.
If any Relevant Tax or amounts in respect of any Relevant Tax must be
deducted from any amounts payable or paid by any Borrower hereunder,
such Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount
which it would have received had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any other
jurisdiction from which, or through which, such payment is made or to
the taxation laws of which the relevant Borrower is at the time of such
payment subject, (iii) any political sub-division of the United Kingdom
or any such other jurisdiction or (iv) any federation or association of
states of which the United Kingdom or any such other jurisdiction is,
at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall be
paid by such Borrower when due (unless the obligation to pay is being
disputed in good faith) and such Borrower shall, within 30 days of the
payment being made, deliver to the Bank evidence satisfactory to the
Bank (including all relevant tax receipts) that the payment has been
duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against
-18-
<PAGE> 19
tax by reason of that Tax Payment (a "TAX CREDIT"), and the Bank is
able to identify the Tax Credit as being attributable to the Tax
Payment, then the Bank shall reimburse to the relevant Borrower such
amount as the Bank reasonably determines to be the proportion of the
Tax Credit as will leave the Bank (after that reimbursement) in no
better or worse position that it would have been if the Tax Payment had
not been required. Nothing in this Clause interferes with the right of
the Bank to arrange its tax affairs in whatever manner it thinks fit
and, without prejudice to the foregoing, the Bank is under no
obligation to claim a Tax Credit, or to claim a Tax Credit in priority
to any other claim, relief, credit or deduction available to it. The
Bank is not obliged to disclose any information regarding its tax
affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any law
or regulation or any practice or concession of the Inland Revenue after
the Signing Date, the Bank ceases to be a Qualifying Bank no Borrower
shall be liable to pay to the Bank under Clause 11.1 (Gross-up) any
amount in respect of taxes levied or imposed by the UK or any taxing
authority thereof or therein in excess of the amount it would have been
obliged to pay if the Bank had been or had not ceased to be a
Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the Bank
otherwise determines that adequate and fair means do not
exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon as
is practicable thereafter on the Rate Fixing Day of the fact
and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance shall
be made in Sterling in an amount equal to its Original
Sterling Amount (unless Sterling was the original currency of
the relevant Advance);
-19-
<PAGE> 20
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected Advance
may be delivered until the Bank notifies the Company that the
event specified in the notification no longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in the
notification or (iii) elect for the Advance to be made in
accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency selected
for such Advance notwithstanding the event specified in the
notification then within five Business Days of receipt of the
notification, the Company and the Bank shall enter into
negotiations for a period of not more than 25 days with a
view to agreeing a substitute basis for determining the rate
of interest and/or funding applicable to the affected Advance
and any future Advances in the currency of the affected
Advance provided that if no substitute basis is agreed within
that period:
(a) the Bank shall certify to the Company (such certificate
to be conclusive) the alternative interest rate
calculated in accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the
then current Term; and
(c) the certificate shall be binding on each relevant
Borrower unless the Company gives notice to the Bank
within five Business Days of the receipt of the
certificate that the certificate is not acceptable and
that each relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in the
notice, which shall be not less than five nor more than
thirty days after the date of the Bank's certificate to
the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the last day
of its Term, as being the cost to the Bank of funding
the Advance from such other sources as it may reasonably
select; and
-20-
<PAGE> 21
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation to
a particular currency, the Bank shall periodically determine whether
the circumstances referred to in Clause 12.1 above still apply and, if
they do not, shall forthwith give notice in writing to the Company of
the date on which the substitute basis will cease to apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or regulation
after the Signing Date, or of any change in the application or
interpretation of any such changed law or regulation or compliance by
the Bank with any such changed law or regulation after the Signing Date
(including, without limitation, any law or regulation relating to
taxation, any reserve, special deposit, cash ratio, liquidity or
capital adequacy requirement or any form of banking or monetary control
but excluding (i) changes arising from the implementation by any
authority having jurisdiction over the Bank or its holding company of
the matters set out in the statement prepared by the Basle Committee on
Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising from
the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the Bank
will promptly notify the Company of the relevant event and the Company
shall on demand pay to the Bank such amount as the Bank certifies in
the demand will compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances comprised
in a class of advances formed by or including the Advances
made or to be made by it under this Agreement as is
attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or calculated
by reference to any amount received or receivable by the Bank
under this Agreement which is forgone.
-21-
<PAGE> 22
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall
net income of the Bank (or the overall net income of a
division or branch of the Bank) imposed in the jurisdiction
in which its principal office or the relevant lending office
for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time
of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the assigning,
transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain
any Advance, then the Bank shall notify the Company accordingly and on
the Maturity Date of each relevant Advance (or such earlier date as the
relevant law or directive may require) the relevant Borrower shall
repay or prepay, as the case may be, any Advances made to it by the
Bank together with all other amounts payable by it to the Bank under
this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation in
relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made to
it by the
-22-
<PAGE> 23
Bank together with all other amounts in relation to such Advance(s)
payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably open
to it to mitigate or remove those circumstances (including seeking
recovery for the account of the relevant Borrower where reasonably
practicable and/or transferring its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
-23-
<PAGE> 24
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by, this
Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to
the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the UK
consistently applied or if not consistently applied
together with details of the changes in such
application; and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the consolidated
financial condition of the companies comprising the
Group as at the date to which they were drawn up, and
the results of its consolidated operations for the year
ended on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts
were drawn up which would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement.
-24-
<PAGE> 25
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive
the execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and warranties
set out in Clauses 16.2 to 16.10 shall be deemed to be repeated by the
Company and the relevant Borrower on the date of each Request made by
such Borrower and the date of each Utilisation made to such Borrower
with reference to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this Agreement
or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that financial
year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable detail
showing the bases for the list; and
-25-
<PAGE> 26
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of Consolidated
Tangible Net Worth (as shown in the latest audited accounts
of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per
cent. of Consolidated Tangible Net Worth (as shown in the
latest audited accounts of the Group),
-26-
<PAGE> 27
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than 3
to 1.
ADDITIONAL COVENANTS
17.10 In the event of the Company agreeing with any of its other bank lenders
to comply with any financial covenants in addition to that contained in
Clause 17.9, the Company shall advise the Bank of the same and, if the
Bank so requires, shall amend this Agreement to include such further
covenant or covenants.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not a
Borrower it will only be an Event of Default if the event is, in the
reasonable opinion of the Bank, reasonably likely to affect materially
and adversely the Company's ability to perform its obligations under
this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable
by it under this Agreement at the place at and in the currency in which
it is expressed to be payable and the default is not remedied within
seven Business Days after the Bank gives notice to the Company and the
relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case of
a breach capable of being remedied) fails to remedy the breach within
fourteen Business Days after the date on which the Company and the
relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
-27-
<PAGE> 28
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand as
a result of an event of default (howsoever described) under
the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due or
to be insolvent, or admits inability to pay its debts generally as they
fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all or
any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened
to consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment or
arrangement with any creditors of, or the rehabilitation,
administration, custodianship, liquidation, or dissolution
of, any Borrower or Material Subsidiary or any other
insolvency proceedings involving any Borrower or Material
Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of
-28-
<PAGE> 29
any Borrower or Material Subsidiary or any substantial part
of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent
not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect
of any Borrower or Material Subsidiary or any substantial part of its
assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint such
a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound Sterling
1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of those mentioned in Clauses 18.6 to 18.11 (inclusive) in
particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or
any other applicable United States federal or state
bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower
or Material Subsidiary in an involuntary case under the
United States federal bankruptcy laws, as now or hereafter
constituted, or any other applicable United States federal or
state bankruptcy, insolvency or other similar law and such
decree or order shall continue unstayed and in effect for a
period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry on
all, or substantially all, of its business.
-29-
<PAGE> 30
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued interest,
and all other amounts accrued under this Agreement, be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand, whereupon
they shall immediately become payable on demand together with
all other amounts accrued under this Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound Sterling
*. The arrangement fee is payable within 30 days of the Signing Date or
(if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the average
daily amount of the unutilised Commitment during each period in respect
of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each six
month period with the first such period commencing on the Signing Date
and the last such period (adjusted as appropriate) ending on the Final
Maturity Date and shall be paid in arrear on the last day of each such
period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax
or any other tax which might be chargeable in connection with that fee.
If any value added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
-30-
<PAGE> 31
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document referred
to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an Event
of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or as
a result of such conversion;
-31-
<PAGE> 32
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
less than the amount owed in the contractual currency, the
relevant Borrower shall, forthwith on demand, pay to the Bank
an amount in the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any such
conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
more than the amount owed in the contractual currency the
Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in which
it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received
from any source otherwise than on its Maturity Date and, for
the purposes of this sub-Clause 22.3.3, the Maturity Date of
an overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower
has delivered a notice of Utilisation by telephone or a
Request (save where such notice or Request is expressly
permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees
to pay to the Bank from time to time on demand any and every
sum or sums of
-32-
<PAGE> 33
money which each Borrower shall at any time be liable to pay
to the Bank under or pursuant to this Agreement and which
shall not have been paid at the time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any loss
incurred by the Bank as a result of any of the obligations of
each Borrower under or pursuant to this Agreement becoming
void, voidable, unenforceable or ineffective as against each
such Borrower for any reason whatsoever, whether or not known
to the Bank, the amount of such loss being the amount which
the person or persons suffering it would otherwise have been
entitled to recover from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder or
under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
-33-
<PAGE> 34
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers or
remedies conferred upon the Bank by this Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or
any other person being avoided or reduced by virtue of any provisions
or enactments relating to bankruptcy, insolvency, liquidation or
similar laws of general application for the time being in force and, if
any such security or payment is so avoided or reduced, the Bank shall
be entitled to recover the value or amount of such security or payment
from the Company subsequently as if such settlement or discharge had
not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
-34-
<PAGE> 35
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer,
-35-
<PAGE> 36
participation, sub-participation or other agreement in relation to this
Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but only
if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the
Bank's Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
-36-
<PAGE> 37
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that
place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for all
notices under, or in connection with, this Agreement, is:
(a) that notified by that Party for this purpose to the
other Party; or
(b) any other notified by that Party for this purpose to the
other by not less than five Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
71 Queen Victoria Street
London EC4V 4DE
Attention: Stuart Clague
Telex: 929111
Facsimile No: 0171 329 6144
-37-
<PAGE> 38
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering or
procuring the delivery to the Bank a Borrower's Accession Notice duly
executed by the Company and the relevant Subsidiary provided that if
such Subsidiary is not resident in the United Kingdom for tax purposes
the Company and the Bank agree to make such amendments to this
Agreement as may be reasonably required at the time in order to allow
such Subsidiary to pay interest to the Bank without deduction or
withholding of any Relevant Tax and to provide such Subsidiary with
equivalent rights, mutatis mutandis, to those contained in Clause 11.4
(Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has
confirmed to the Company that it has received, in form and substance
satisfactory to it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of such
notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country
shall be translated into, or paid in, the currency unit of
that country designated by the Bank acting reasonably and in
consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be at
the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Bank acting
reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of it
and the new currency and to put the Bank and the Borrowers in the same
position, so far as is possible, that they would have been in if no
change in currency had occurred.
-38-
<PAGE> 39
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new currency
in all or any part of the European Union will not result in the
discharge cancellation, rescission or termination in whole or in pat of
this Agreement or give any party hereto the right to cancel, rescind,
terminate or vary (other than as aforesaid) this Agreement in whole or
in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken together
shall be delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on its
behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
-39-
<PAGE> 40
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
ROYAL BANK OF CANADA EUROPE LIMITED
By: /s/Ralf Hohweiler
Ralf Hohweiler
-41-
<PAGE> 1
EXHIBIT (b)(6)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) UBS AG LONDON BRANCH of 2 Finsbury Avenue, London EC2M 2PP (the
"BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and also (in relation to a transaction involving an
Optional Currency) in the principal financial centre of the country
of that Optional Currency, provided always that any reference to
"Business Day" which relates to a payment or rate fixing in euros
means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 35,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks by
the Bank in the London Interbank Market at or about 11.00 a.m. on the
applicable Rate Fixing Date for a period equal to its Term and for
delivery on the first Business Day thereof (provided that where
pursuant to Clause 12.2.3 the interest rate for an Advance is to be
fixed after 11.00 a.m., for the purposes of this definition of
"LIBOR", no rate shall be treated as appearing on Telerate page 3750
(or such other relevant page) and the time of "1.00 p.m." shall be
substituted for the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating thereto, in the acquisition of assets of
a kind generally used by the Group in its business
operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the
-5-
<PAGE> 6
company becomes a member of the Group) of an overdraft (or
other equivalent) facility granted to such company prior to
its becoming a member of the Group) has not been increased
in contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under
the Revolving Multi-Currency Credit Facility
Agreement dated 17th May 1993 (as amended) made
between the Company and Union Bank of
Switzerland ("UBS"), and under the Revolving
Multi-Currency Credit Facility Agreement dated
14th May 1993 (as amended) made between the
Company and Swiss Bank Corporation ("SBC") (UBS
and SBC having subsequently merged to become the
Bank), together the "Existing Outstandings",
shall have been repaid or prepaid in full and
the aggregate commitments under such facility
agreements cancelled on the day of such
repayment or prepayment; or
(b) the amount of the first Utilisation together
with other sums available to the Borrower shall
be used to repay or prepay the Existing
Outstandings and the aggregate commitments under
such facility agreements cancelled on the day of
such repayment or prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
-10-
<PAGE> 11
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of
Pound Sterling 1,000,000 and an integral
multiple of Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
-11-
<PAGE> 12
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically;
6.1.1 reduced to Pound Sterling 30,000,000 at close of business
on the third anniversary of the Signing Date and to Pound
Sterling 25,000,000 at the close of business on the 4th
anniversary of the Signing Date and the Borrower shall,
on or before such dates, repay and/or prepay such amount,
if any, as may be required to ensure that Clause 2.2
(Overall Facility Limit) is not contravened on such dates
following either of such reductions; and
6.1.2 cancelled at close of business on the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
-12-
<PAGE> 13
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a
-13-
<PAGE> 14
Borrower on the day on which another Advance (the "MATURING ADVANCE")
in the same currency is due to be repaid by such Borrower then,
subject to the terms of this Agreement and so long as the conditions
referred to in Clause 4.2 shall have been satisfied in relation to
the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the amount by which the Maturing
Advance exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were
-14-
<PAGE> 15
approved by the Board of Directors of the Company and the
Maturity Date for any Advance requested falls on a date not
more than three months after the expiration of the 30 day
period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of
such period, together with accrued interest thereon up to
the date of payment and all other amounts payable to the
Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre
-15-
<PAGE> 16
of the relevant currency as it may notify the other or to such other
place as may be agreed between the parties for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
-16-
<PAGE> 17
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.1 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
-17-
<PAGE> 18
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
-18-
<PAGE> 19
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief, credit
or deduction available to it. The Bank is not obliged to disclose any
information regarding its tax affairs or computations to any
Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
-19-
<PAGE> 20
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in
the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business
Days of receipt of the notification, the Company and the
Bank shall enter into negotiations for a period of not more
than 25 days with a view to agreeing a substitute basis for
determining the rate of interest and/or funding applicable
to the affected Advance and any future Advances in the
currency of the affected Advance provided that if no
substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five
-20-
<PAGE> 21
Business Days of the receipt of the certificate
that the certificate is not acceptable and that
each relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
-21-
<PAGE> 22
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
-22-
<PAGE> 23
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
-23-
<PAGE> 24
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
-24-
<PAGE> 25
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
-25-
<PAGE> 26
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
-26-
<PAGE> 27
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
-27-
<PAGE> 28
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
-28-
<PAGE> 29
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such
consent not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
-29-
<PAGE> 30
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
19. FEES
COMMITMENT FEE
19.1 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period
in respect of which such fee is to be determined.
19.2 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid quarterly in arrear. Accrued
commitment fee is also payable to the Bank on the cancelled amount of
the Commitment at the time the cancellation takes effect if the
Commitment is cancelled in full.
VAT
19.3 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
-30-
<PAGE> 31
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
-31-
<PAGE> 32
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more than the amount owed in the contractual currency
the Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of
-32-
<PAGE> 33
money which each Borrower shall at any time be liable to
pay to the Bank under or pursuant to this Agreement and
which shall not have been paid at the time such demand is
made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
-33-
<PAGE> 34
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers
or remedies conferred upon the Bank by this Agreement or by
law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
-34-
<PAGE> 35
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
-35-
<PAGE> 36
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.1 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer, participation, sub-participation or other
agreement in relation to this Agreement:
26.1.1 a copy of this Agreement; and
-36-
<PAGE> 37
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
-37-
<PAGE> 38
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
2 Finsbury Avenue
London EC2M 2PP
Attention: Sharon Canham
Telex: 887434 SBCWLNG
Facsimile No: 0171 568 5664
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the
-38-
<PAGE> 39
Bank a Borrower's Accession Notice duly executed by the Company and
the relevant Subsidiary provided that if such Subsidiary is not
resident in the United Kingdom for tax purposes the Company and the
Bank agree to make such amendments to this Agreement as may be
reasonably required at the time in order to allow such Subsidiary to
pay interest to the Bank without deduction or withholding of any
Relevant Tax and to provide such Subsidiary with equivalent rights,
mutatis mutandis, to those contained in Clause 11.4 (Qualifying
Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party
-39-
<PAGE> 40
hereto the right to cancel, rescind, terminate or vary (other than as
aforesaid) this Agreement in whole or in part or give rise to an
Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
UBS AG London Branch
By: /s/S. Canham
/s/C. Davis
-41-
<PAGE> 1
EXHIBIT (b)(7)
THIS AGREEMENT is dated 23rd March, 1999
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) WESTDEUTSCHE LANDESBANK GIROZENTRALE of 51 Moorgate London EC2R 6AE
(the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 15,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating thereto, in the acquisition of assets of
a kind generally used by the Group in its business
operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when
-5-
<PAGE> 6
the company becomes a member of the Group) of an overdraft
(or other equivalent) facility granted to such company
prior to its becoming a member of the Group) has not been
increased in contemplation of, or since the date of, such
company becoming a member of the Group and (c) (save for
any Security Interest created before the date of such
company becoming a member of the Group, over any freehold
or leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of Pound
Sterling 1,000,000 and an integral multiple of
Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
-10-
<PAGE> 11
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 6 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 11.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
-11-
<PAGE> 12
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
-12-
<PAGE> 13
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the
-13-
<PAGE> 14
amount by which the Maturing Advance exceeds the
New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date
-14-
<PAGE> 15
falling three months after the end of such period, together
with accrued interest thereon up to the date of payment and
all other amounts payable to the Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
-15-
<PAGE> 16
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
-16-
<PAGE> 17
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation, then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the
-17-
<PAGE> 18
aggregate Original Sterling Amount of all Advances outstanding on
such date exceeds the Commitment, then any excess shall be repaid to
the Bank by the relevant Borrower upon the Bank's first written
demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
Credit"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief,
-18-
<PAGE> 19
credit or deduction available to it. The Bank is not obliged to
disclose any information regarding its tax affairs or computations to
any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification
-19-
<PAGE> 20
under sub-Clause 12.1.2) on the Rate Fixing Day: (i) elect
for the notice of Utilisation by telephone or the Request
to be cancelled without penalty; (ii) if the Advance was to
be made in an Optional Currency, elect for the Advance to
be made in an Optional Currency other than a currency
affected by the event specified in the notification or
(iii) elect for the Advance to be made in accordance with
the Request notwithstanding the event specified in the
notification. If any Borrower requires an affected Advance
to be made in the original currency selected for such
Advance notwithstanding the event specified in the
notification then within five Business Days of receipt of
the notification, the Company and the Bank shall enter into
negotiations for a period of not more than 25 days with a
view to agreeing a substitute basis for determining the
rate of interest and/or funding applicable to the affected
Advance and any future Advances in the currency of the
affected Advance provided that if no substitute basis is
agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
-20-
<PAGE> 21
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
-21-
<PAGE> 22
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
-22-
<PAGE> 23
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
-23-
<PAGE> 24
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
-24-
<PAGE> 25
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
-25-
<PAGE> 26
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
-26-
<PAGE> 27
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
-27-
<PAGE> 28
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such
consent not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
-28-
<PAGE> 29
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound Sterling
1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
-29-
<PAGE> 30
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound
Sterling *. The arrangement fee is payable within 30 days of the
Signing Date or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% per annum on
the average daily amount of the unutilised Commitment during each
period in respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each
three month period with the first such period commencing on the
Signing Date and the last such period (adjusted as appropriate)
ending on the Final Maturity Date and shall be paid in arrear on the
last day of each such period. Accrued commitment fee is also payable
to the Bank on the cancelled amount of the Commitment at the time the
cancellation takes effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
-30-
<PAGE> 31
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more than the amount owed in the contractual currency
the Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
-31-
<PAGE> 32
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
-32-
<PAGE> 33
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers
or remedies conferred upon the Bank by this Agreement or by
law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or
-33-
<PAGE> 34
enactments relating to bankruptcy, insolvency, liquidation or similar
laws of general application for the time being in force and, if any
such security or payment is so avoided or reduced, the Bank shall be
entitled to recover the value or amount of such security or payment
from the Company subsequently as if such settlement or discharge had
not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
-34-
<PAGE> 35
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer, participation, sub-participation or other
agreement in relation to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
-35-
<PAGE> 36
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
-36-
<PAGE> 37
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
Administrative Matters
51 Moorgate
London EC2R 6AE
Attention: Paul Lowder
Telex: 887964/5
Facsimile No: (0171) 374 8546
Credit Matters
51 Moorgate
London EC2R 6AE
Attention: Neil Harris
Facsimile No: (0171) 457 2108
-37-
<PAGE> 38
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the Bank a Borrower's Accession Notice
duly executed by the Company and the relevant Subsidiary provided
that if such Subsidiary is not resident in the United Kingdom for tax
purposes the Company and the Bank agree to make such amendments to
this Agreement as may be reasonably required at the time in order to
allow such Subsidiary to pay interest to the Bank without deduction
or withholding of any Relevant Tax and to provide such Subsidiary
with equivalent rights, mutatis mutandis, to those contained in
Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
-38-
<PAGE> 39
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement
in whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
-39-
<PAGE> 40
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: /s/Michaela Zinser
Michaela Zinser, Senior Analyst
-41-
<PAGE> 1
EXHIBIT (b)(8)
THIS AGREEMENT is dated 22nd December, 1998
BETWEEN:
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "the Company"); and
(2) DEN DANSKE BANK LONDON BRANCH of 75 King William Street, London EC4N
7DT (the "Bank")
IT IS AGREED as follows:
1. INTERPRETATION
Definitions
1.1 In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ACCEPTANCE CREDIT FACILITY" means the uncommitted acceptance credit
facility referred to in Clause 2.2 (Acceptance Credit Facility);
"ACCEPTANCE COMMISSION RATE" means *% per annum;
"ADVANCE" means an advance made by the Bank under the Loan Facility or
the principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or the
obligation of the Bank to make Advances or to accept Bills ceases
pursuant to any of the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a document
or notice, a person who is authorised under the then current Board
Authority for Financial Transactions or such other mandate as may be
presented in its place to the Bank signed by any two Directors or one
Director and the Secretary of such Borrower, to give, execute or
despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot rate
of exchange for the purchase of the relevant Optional Currency in the
London foreign exchange market with Sterling at or about 11.00 a.m. on
that day;
"BILL" means a Sterling bill of exchange substantially in the form of
Schedule 4;
-1-
<PAGE> 2
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to Clause
31.4 and "Borrower" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the form
set out in Schedule 6;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 7;
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount of
interest receivable by any member of the Group during such Relevant
Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet of
the Group, and those which are guaranteed by members of the Group to
the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks and the relevant financial markets are open for business in
London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 25,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or credited
as paid up on the issued share capital of the Company, plus the
aggregate amounts standing to the credit of the consolidated reserves
of the Group (including any share premium account or capital redemption
reserve fund and adding or deducting any balance standing to the credit
or debit of the consolidated profit and loss account of the Group and
including the consolidated portion of the reserves of associates) plus
any amount appearing in the consolidated balance sheet in respect of
deferred income relating to government grants, deferred taxation and
minority interests and less goodwill and other intangibles, all amounts
being construed in accordance with accounting principles generally
accepted in the United Kingdom and consistently applied;
-2-
<PAGE> 3
"DEFAULT" means an Event of Default or an event which, with the giving
of notice, lapse of time, determination of materiality or fulfilment of
any other applicable condition (or any combination of the foregoing) in
each case as specified in Clause 18, would constitute an Event of
Default;
"DOLLARS" or "US $" means the lawful currency for the time being of the
United States of America;
"EBDR" means, in relation to a Bill, the rate (as determined by the
Bank at or about 10.30 a.m. on its Utilisation Date) at which Eligible
Bills of an equivalent tenor can be discounted in the London discount
market at or about that time;
"ELIGIBLE BILL" means a Sterling bill of exchange eligible for
re-discounting at the Bank of England;
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the Acceptance Credit Facility or the Loan Facility;
"FINAL MATURITY DATE" means the 5th anniversary of the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum at
which deposits in the relevant currency of the Advance appears on the
Telerate page 3750 (or such other relevant Telerate page as may be
appropriate to such currency) as of 11.00 a.m. on the applicable Rate
Fixing Date for a period equal to its Term and for delivery on the
first Business Day thereof (save that if such rate does not appear on
the Telerate page 3750 (or such other relevant page) then the rate per
annum at which deposits in the relevant currency and for the amount of
the Advance are offered to the Bank by leading banks in the London
Interbank Market at or about 11.00 a.m. on the applicable Rate Fixing
Date for a period equal to its Term and for delivery on the first
Business Day thereof (provided that where pursuant to Clause 12.2.3 the
interest rate for an Advance is to be fixed after 11.00 a.m., for the
purposes of this definition of "LIBOR", no rate shall be treated as
appearing on Telerate page 3750 (or such other relevant page) and the
time of "1.00 p.m." shall be substituted for the time "11.00 a.m.");
-3-
<PAGE> 4
"LOAN FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Loan Facility);
"MANDATORY COST" means the cost imputed to the Bank in respect of each
Advance of compliance with the Mandatory Cost requirements of the Bank
of England and the banking supervision costs of the Financial Services
Authority during the Term of that Advance, expressed as a rate per
annum and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of companies
whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible Assets
of the Group as shown by a comparison of the latest audited balance
sheet of the Subsidiary (or, in the case of a Subsidiary within (ii),
its latest audited consolidated balance sheet) with the latest audited
consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance or a Bill, the last
day of its Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at the
relevant time is freely transferable and convertible into Sterling and
deposits of which are readily available and freely dealt in on the
London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December 1997, in the form delivered to the Bank prior
to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in Sterling,
its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange on the
Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
-4-
<PAGE> 5
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any undertaking or
assets of a similar nature and of approximately equal or higher
value;
(ii) the sale of assets for cash and the application within a period
of 180 days, of a sum approximately equal to the net proceeds
relating thereto, in the acquisition of assets of a kind
generally used by the Group in its business operations;
(iii) the sale of assets for cash where a sum approximately equal to
the net proceeds relating thereto has been applied in the
acquisition of assets (made during the period of 180 days before
the relevant sale) of a kind generally used by the Group in its
business operations;
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member of
the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market value on
arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this Agreement
which has been disclosed in writing to the Bank prior to the
date hereof; or
(ii) any Security Interest which is created with the prior consent of
the Bank; or
(iii) any lien arising by operation of law in the ordinary course of
business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in the
ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title or
insurance policies and sale contracts in relation to such goods,
arising in the ordinary course of business in connection with
letters of credit and similar transactions where such Security
Interest secures only so much of the acquisition cost of such
goods which is required to be paid within 180 days after the
date upon which the sale was first incurred; or
(vi) any Security Interest over or affecting any property or asset
acquired by a member of the Group after the date hereof and
subject to which such property or asset is acquired, but only if
(a) such Security Interest was not created in contemplation of
-5-
<PAGE> 6
the acquisition of such property or asset by a member of the
Group, (b) the amount thereby secured has not been increased in
contemplation of, or since the date of, the acquisition of such
property or asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank within 12
months of the acquisition of the property or asset in question;
or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to the
date on which such company becomes a member of the Group but
only if (a) such Security Interest was not created in
contemplation of such company becoming a member of the Group,
(b) the amount thereby secured (save any overdrawn amount on the
current account of any such company within the terms (in
existence on the date when the company becomes a member of the
Group) of an overdraft (or other equivalent) facility granted to
such company prior to its becoming a member of the Group) has
not been increased in contemplation of, or since the date of,
such company becoming a member of the Group and (c) (save for
any Security Interest created before the date of such company
becoming a member of the Group, over any freehold or leasehold
property solely for the purpose of securing borrowings incurred
to acquire such property) such Security Interest is discharged
to the satisfaction of the Bank within 12 months of such company
becoming a member of the Group; or
(viii) any Security Interest created after the date hereof over any
freehold or leasehold property of a member of the Group solely
for the purpose of securing borrowings incurred to acquire such
property; or
(ix) any Security Interests created or continuing in connection with
an issue of industrial revenue or development bonds or in
connection with some other similar financing to which the Bank
has previously consented; or
(x) any Security Interest created in substitution for any Security
Interest permitted pursuant to this definition provided that the
substituted Security Interest is over the same asset and the
principal amount secured does not exceed principal amount
secured on such asset prior to the substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to any
member of the Group in the ordinary course of its business by
virtue of any retention of title provisions contained in the
relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing, in
aggregate, an amount not exceeding at any time an amount equal
to 10% of the Consolidated Tangible Net Worth at such time or if
greater Pound Sterling 25,000,000;
-6-
<PAGE> 7
"QUALIFYING BANK" means a bank as defined in Section 840A of the Income
and Corporation Taxes Act 1988 (or any statutory re-enactment or
modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional Currency,
the second Business Day before its Utilisation Date;
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and the
first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise a Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" or "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means:
(i) for the purposes of Clauses 16.8, 17.2 and 17.9 and the
references to "Group" in the definitions of "Borrowing Costs"
and "Operating Profit" means any company whose accounts are
consolidated with the accounts of the Company in accordance with
accounting principles generally accepted under accounting
standards of the UK; and
(ii) for any other purpose has the meaning given to it by Section 736
of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate amount
of any current and fixed assets of that company as shown in its latest
audited balance sheet or, in the case of a company which is a holding
company of a group of companies, its latest audited consolidated
balance sheet but excluding any amount attributable to goodwill,
intellectual property or other intangible assets of whatever kind;
-7-
<PAGE> 8
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance or Bill is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into force
on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
and
"UTILISATION" means:
(i) in the case of a Utilisation comprising any Advances, all the
Advances made or to be made; and
(ii) in the case of a Utilisation comprising Bills, all the Bills
accepted or to be accepted,
following the giving by a Borrower of a Request for those Advances or
Bills; and
"UTILISATION DATE" means:
(i) in relation to an Advance or Utilisation comprising Advances,
the date for the making of the Advance(s); and
(ii) in relation to a Bill or Utilisation comprising Bills, the date
for acceptance of the Bill(s).
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "authorisation" includes an authorisation, consent,
approval, resolution, licence, exemption, filing, registration
and notarisation;
1.2.2 a "regulation" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank is
accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "month" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day
in the next calendar month except that, if there is no
numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in
that later month;
1.2.4 a "tax" includes any tax, levy, assessment, impost,
withholding or other deduction;
-8-
<PAGE> 9
1.2.5 "wholly-owned" has the meaning given to it in Section 736 of
the Companies Act 1985;
1.2.6 "Bank" includes its successors or assigns or any bank or
financial institution which becomes a party to this Agreement
under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "Clause" or a "Schedule" is a reference to a clause of or a
schedule to this Agreement;
1.2.9 "this Agreement" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless otherwise
stated;
1.2.11 "euro" means the single currency of Participating Member
States to be introduced on the Commencement Date and "euro
unit" means the currency unit of the euro; and
1.2.12 "national currency unit" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 5 containing indicative timetables is included for ease of
reference and convenience but in the event of any conflict between the
substantive provisions of this Agreement and the contents thereof, the
substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
LOAN FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period and
when requested by a Borrower, make to such Borrower Advances upon and
subject to the terms of this Agreement.
ACCEPTANCE CREDIT FACILITY
2.2 The Bank may, at the Bank's sole option, make available to the
Borrowers an acceptance credit facility under which the Bank shall,
during the Availability Period and when
-9-
<PAGE> 10
requested by a Borrower, accept Bills drawn by such Borrower upon and
subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.3 The aggregate Original Sterling Amount of all outstanding Utilisations
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.4 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies and
Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of the
proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date for
that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on those
dates are correct and will be correct immediately after
the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.3 (Overall facility
limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
-10-
<PAGE> 11
(a) the total aggregate amounts outstanding under the
Revolving Multi-Currency Credit Facility and Acceptance
Credit Facility Agreement dated 14th May 1993 (as
amended) made between the Company and Den Danske Bank
Aktieselskab the "Existing Outstandings", shall have been
repaid or prepaid in full and the aggregate commitments
under such facility agreement cancelled on the day of
such repayment or prepayment; or
(b) the amount of the first Utilisation together with other
sums available to the Borrower shall be used to repay or
prepay the Existing Outstandings and the aggregate
commitments under such facility agreement cancelled on
the day of such repayment or prepayment.
5. THE FACILITIES
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Loan Facility if the Bank receives, not
later than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close of
business in London on the day on which such telephone notice is, or is
deemed to have been, given.
COMPLETION OF REQUESTS FOR ADVANCES
5.3 When giving a notice of Utilisation by telephone and when completing
the Request for Advances, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested Amount
is:
(a) if the currency is Sterling, a minimum of Pound Sterling
1,000,000 and an integral multiple of Pound
Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US $1,000,000
and an integral multiple of US $100,000; or
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the amounts
agreed between the relevant
-11-
<PAGE> 12
Borrower and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant Borrower
may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an optional
duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"approved duration" means a period of 1, 2, 3 or 6 months; and
"optional duration" means any other period not exceeding 12
months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it may
also select at the time of the telephone notice of Utilisation and in
the relevant Request a Term of any approved duration to apply if the
selection of a Term of an optional duration becomes ineffective in
accordance with sub-Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional duration;
and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m. on
the date of receipt by it of the relevant Request or telephone
notice of Utilisation pursuant to Clause 5.1 or Clause 5.2
respectively that it does not agree to that request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the Advance
available to the relevant Borrower on the relevant Utilisation Date.
THE ACCEPTANCE CREDIT FACILITY
RECEIPT OF REQUESTS
5.7 Subject to Clauses 5.9 and 5.10:
-12-
<PAGE> 13
5.7.1 any Borrower may utilise the Acceptance Credit Facility if the
Bank receives, not later than 10.00 a.m. on the proposed
Utilisation Date a duly completed Request, substantially in
the form of Schedule 3 and signed by an Authorised Signatory
of such Borrower; and
5.7.2 any Borrower may utilise the Acceptance Credit Facility by
notifying the Bank by telephone not later than 10.00 a.m. on
the proposed Utilisation Date provided that a notice given by
telephone shall be confirmed in writing by the delivery by
such Borrower to the Bank of a duly completed Request to be
actually received by the Bank not later than the close of
business in London on the day on which such telephone notice
is, or is deemed to have been, given.
COMPLETION OF REQUESTS
5.8 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.8.1 the Utilisation Date is a Business Day;
5.8.2 the Requested Amount is a minimum of Pound Sterling 1,000,000
and an integral multiple of Pound Sterling 100,000 or such
other amounts as the Bank and such Borrower may agree;
5.8.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of 7 to 183 days; and
5.8.4 the payment instructions comply with Clause 9 (Payments).
ACCEPTANCE OF BILLS
5.9 Unless the Bank notifies the relevant Borrower by 11.00 a.m. on the
proposed Utilisation Date that the Bills referred to in the relevant
telephone notice of Utilisation or Request will not be accepted by the
Bank, the Bank shall accept such Bills on the relevant Utilisation Date
provided they are completed in accordance with Clauses 5.11 and 5.12
(Holding and Completion of Bills).
5.10 The Bank shall, as soon as is practicable but not later than 12.30 p.m.
on the Utilisation Date notify the relevant Borrower of the applicable
EBDR in relation to the Bills accepted or to be accepted in accordance
with Clause 5.9.
HOLDING AND COMPLETION OF BILLS
5.11 The relevant Borrower shall ensure that the Bank has a sufficient stock
of Bills, before giving a telephone notice of Utilisation or delivering
any Request for a Utilisation comprising Bills.
-13-
<PAGE> 14
5.12 Each Bill shall:
5.12.1 be drawn by the relevant Borrower in its own favour and
endorsed by it in blank;
5.12.2 be undated;
5.12.3 have the Maturity Date and the face amount left blank; and
5.12.4 be claused in a manner which complies with the Bank of
England's requirements for Eligible Bills at that time.
DISCOUNTING OF BILLS
5.13 The Bank may arrange for a Bill accepted by it to be discounted on its
behalf in the London discount market or elsewhere or discount the Bill
itself.
INFORMATION RELATING TO BILLS
5.14 The relevant Borrower shall, promptly on request, supply to the Bank
any information relating to any Bill (including the underlying trade
transaction for that Bill) as the Bank may reasonably require or which
may be required by the Bank of England or any other fiscal or monetary
authority in the UK.
ELIGIBLE BILLS
5.15 The relevant Borrower shall ensure that each Bill drawn by it and
accepted by the Bank is, assuming that the Bank is a bank whose
acceptances are then being treated as eligible acceptances by the Bank
of England, eligible for re-discounting at the Bank of England.
PAYMENT OF PROCEEDS
5.16 Subject to the terms of this Agreement, the Bank shall pay to the
relevant Borrower on the relevant Utilisation Date an amount equal to:
5.16.1 the amount which the Bank receives or would receive as the
proceeds of discounting if it had discounted the Bills
accepted by it hereunder at the applicable EBDR; less
5.16.2 acceptance commission calculated at the applicable Acceptance
Commission Rate on the aggregate principal amount of those
Bills.
NON-ACCEPTANCE OF BILLS
5.17 If the Bank gives the relevant Borrower notice under Clause 5.9 that
the Bills referred to in the relevant telephone notice of Utilisation
or Request will not be accepted by the Bank then, unless such Borrower,
by notice to the Bank by 12.00 p.m. on the relevant Utilisation Date
elects for the telephone notice of Utilisation or Request to be
cancelled, without penalty, the said notice or Request shall be deemed
to have been a request for an Advance of an amount equal to the
Requested Amount and for a Term equal to the Term specified
-14-
<PAGE> 15
in the telephone notice or Request (or if the Bank does not agree to
that Term then for a Term of 3 months) to be made available to such
Borrower on such Utilisation Date.
STANDARD OF CARE
5.18 In holding and dealing with Bills delivered to it under this Clause,
the Bank shall use the same standard of care as it uses in holding and
dealing with its own notes, bills or certificates of deposit and shall
indemnify the relevant Borrower for any failure so to do. If the
Commitment has been reduced to zero the Bank shall forthwith destroy
all uncompleted Bills held by it and shall provide to the Company a
certificate of destruction in respect thereof.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business on
the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective; and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
-15-
<PAGE> 16
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling six
months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"default rate") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the overdue
amount is an Advance (or part thereof) and only for the period
up to and including the Maturity Date of that Advance); and
7.3.2 the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted an Advance
in the currency of the overdue amount for such successive
Terms of such duration (not exceeding three months) as the
Bank may reasonably determine (each a "Designated Term").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term, as
appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from whatever
sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated Term
until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this Agreement.
-16-
<PAGE> 17
8. REPAYMENT AND PREPAYMENT
PAYMENT OF BILLS
8.1 Each Borrower shall pay to the Bank an amount equal to the principal
amount of each of its Bills accepted by the Bank on the Maturity Date
for each such Bill.
REPAYMENT OF ADVANCES
8.2 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "New Advance") is to be
made to a Borrower on the day on which another Advance (the "Maturing
Advance") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.2.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is equal
to or greater than the Maturing Advance) or in part (if the
New Advance is less than the Maturing Advance); and
8.2.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited to
the account of such Borrower by the Bank in accordance with
the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to such
Borrower pursuant to Clause 5.6 a principal amount equal
to the amount (if any) by which the New Advance exceeds
the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the Bank
pursuant to this Clause 8.2 a principal amount equal to
the amount by which the Maturing Advance exceeds the New
Advance.
8.3 On the Final Maturity Date, all outstanding Utilisations and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF BILLS
8.4 Any Borrower may, by giving not less than 15 days' prior notice to the
Bank, prematurely comply with its obligations under Clause 8.1 (Payment
of Bills).
8.5 If, under the terms of this Agreement, including without limitation
this Clause 8 and Clauses 14.1.2 and 15.2.2, a Borrower prematurely
complies with its obligations under Clause 8.1 (Payment of Bills) in
respect of any Bill, then the amount payable by such Borrower shall be
the principal amount equal to the Bill discounted on the basis of such
normal commercial rates prevailing at the time of payment for Sterling
deposits of an amount equal to the amount so paid for the period from
the time of payment to the Maturity Date of the Bill as the Bank may
reasonably determine. If and to the extent that
-17-
<PAGE> 18
a Borrower pays more than it is obliged to pay under this Clause then
the Bank shall pay to such Borrower an amount equal to such
over-payment by no later than the Maturity Date of the relevant Bill.
PREPAYMENT OF ADVANCES
8.6 Any Borrower may, without penalty and on giving not less than 15 days'
prior notice to the Bank, prepay all or any part of an Advance, but if
in part, in a minimum amount of Pound Sterling 1,000,000 and an
integral multiple of Pound Sterling 100,000 (or the comparable amount
in any Optional Currency).
8.7 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.8 Should any person or group of persons, acting either individually or in
concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the purpose
of this Clause a single person or group of persons shall have acquired
control if it or they own or hold more than 50% (fifty per cent.) of
the issued share capital of the Company having the right to attend and
vote at general meetings of the Company or more than 50% (fifty per
cent.) of such rights), then:
8.8.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.8.2 thereafter no Borrower shall be permitted to request a
Utilisation unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Utilisation requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.9.
8.9 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company, the Bank shall consult with
the Company during the period of 30 days after receipt of the
notification from the Company referred to in sub-Clause 8.8.1 and shall
be entitled to give a notice of continuance of each Facility to the
Company. Upon receipt of such notice of continuance, the right of the
Borrowers to request a Utilisation without the limitation referred to
in sub-Clause 8.8.2 shall be reinstated.
8.10 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company but, at the end of the period
of 30 days referred to in Clause 8.9 above, the Company has not
received a notice of continuance then:
8.10.1 the Acceptance Credit Facility and the Loan Facility shall be
cancelled;
8.10.2 any outstanding Utilisations with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of such
period, together with accrued interest thereon up to the date
of payment and all other amounts payable to the Bank
hereunder; and
-18-
<PAGE> 19
8.10.3 any outstanding Utilisations with Maturity Dates falling not
later than three months after the end of such period shall be
repaid on their respective Maturity Dates.
8.11 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the Bank
shall have confirmed within 2 days of receipt of the notice referred to
in sub-Clause 8.8.1 that each Facility shall be continued, each
Facility shall be cancelled and any outstanding Utilisations shall be
repayable on demand by the Bank together with accrued interest thereon
up to the date of payment and all other amounts payable to the Bank
hereunder.
8.12 Any prepayment of an Advance under this Agreement shall be made
together with accrued interest on the amount prepaid together with any
amount payable to the Bank pursuant to Clause 22.3
8.13 No Advance may be prepaid otherwise than in accordance with the express
terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this Agreement
shall be made to such account at such office or bank in the principal
financial centre of the relevant currency as it may notify the other or
to such other place as may be agreed between the parties for this
purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the place
for payment on the due date in lawful money of the country of
that Optional Currency, in immediately available funds, or at
such times or in such funds as the Bank may specify to the
relevant Borrower as being customary at the time for the
settlement of transactions in the relevant currency in the
place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
-19-
<PAGE> 20
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any Advance
requested to be denominated in the currency of a Participating Member
State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit of
a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor, can
be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal under
this Agreement pursuant to Clause 9.9 above interest is payable on the
principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement, the
Bank shall apply that payment towards the obligations of such Borrower
under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due but
unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
-20-
<PAGE> 21
9.11.5 fifthly, in or towards payment of any other sum due but unpaid
under this Agreement.
9.12 The Bank may vary the order set out in sub-Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional Currency
unless the Bank has confirmed to such Borrower that the Optional
Currency is readily available and freely transferable in the London
foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene any
law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m. on
that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the Advance
will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling Amount
promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the new
Term in accordance with the terms and conditions of this Agreement and
if on the
-21-
<PAGE> 22
relevant Utilisation Date the aggregate Original Sterling Amount of all
Utilisations outstanding on such date exceeds the Commitment, then any
excess shall be repaid to the Bank by the relevant Borrower upon the
Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without deduction
for or on account of any Relevant Taxes except to the extent that any
Borrower is required by law to make payment subject to any such taxes.
If any Relevant Tax or amounts in respect of any Relevant Tax must be
deducted from any amounts payable or paid by any Borrower hereunder,
such Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount
which it would have received had payment not been made subject to tax.
"Relevant Tax" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any other
jurisdiction from which, or through which, such payment is made or to
the taxation laws of which the relevant Borrower is at the time of such
payment subject, (iii) any political sub-division of the United Kingdom
or any such other jurisdiction or (iv) any federation or association of
states of which the United Kingdom or any such other jurisdiction is,
at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall be
paid by such Borrower when due (unless the obligation to pay is being
disputed in good faith) and such Borrower shall, within 30 days of the
payment being made, deliver to the Bank evidence satisfactory to the
Bank (including all relevant tax receipts) that the payment has been
duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "Tax Payment") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "Tax
Credit"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the foregoing,
the Bank is under no obligation to claim a Tax Credit, or to claim a
Tax Credit in priority to any other claim, relief, credit or deduction
-22-
<PAGE> 23
available to it. The Bank is not obliged to disclose any information
regarding its tax affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any law
or regulation or any practice or concession of the Inland Revenue after
the Signing Date, the Bank ceases to be a Qualifying Bank no Borrower
shall be liable to pay to the Bank under Clause 11.1 (Gross-up) any
amount in respect of taxes levied or imposed by the UK or any taxing
authority thereof or therein in excess of the amount it would have been
obliged to pay if the Bank had been or had not ceased to be a
Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION - ADVANCES
12.1 If, in relation to any proposed Utilisation comprising Advances:
12.1.1 the Bank is unable to obtain from leading banks a rate for the
purposes of determining the applicable LIBOR or the Bank
otherwise determines that adequate and fair means do not exist
for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon as is
practicable thereafter on the Rate Fixing Day of the fact and that this
Clause is in operation.
12.2 After any notification under Clause 12.1. above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance shall
be made in Sterling in an amount equal to its Original
Sterling Amount (unless Sterling was the original currency of
the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected Advance
may be delivered until the Bank notifies the Company that the
event specified in the notification no longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00 a.m.
(or, if later, within 30 minutes of receipt by the Company of
a notification under Clause 12.1)
-23-
<PAGE> 24
on the Rate Fixing Day: (i) elect for the notice of
Utilisation by telephone or Request to be cancelled without
penalty; (ii) if the Advance was to be made in an Optional
Currency, elect for the Advance to be made in an Optional
Currency other than a currency affected by the event specified
in the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency selected
for such Advance notwithstanding the event specified in the
notification then within five Business Days of receipt of the
notification, the Company and the Bank shall enter into
negotiations for a period of not more than 25 days with a view
to agreeing a substitute basis for determining the rate of
interest and/or funding applicable to the affected Advance and
any future Advances in the currency of the affected Advance
provided that if no substitute basis is agreed within that
period:
(a) the Bank shall certify to the Company (such certificate
to be conclusive) the alternative interest rate
calculated in accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the
then current Term; and
(c) the certificate shall be binding on each relevant
Borrower unless the Company gives notice to the Bank
within five Business Days of the receipt of the
certificate that the certificate is not acceptable and
that each relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in the
notice, which shall be not less than five nor more than
thirty days after the date of the Bank's certificate to
the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(i) the Margin;
(ii) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(iii) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation to
a particular currency, the Bank shall periodically determine whether
the circumstances referred to in Clause 12.1 above still apply and, if
they do not, shall forthwith give notice in writing to the Company of
the date on which the substitute basis will cease to apply.
-24-
<PAGE> 25
MARKET DISRUPTION - BILLS
12.4 If, in relation to any Bills:
12.4.1 the Bank, acting reasonably, determines that adequate and fair
means do not exist for determining the applicable EBDR; or
12.4.2 the Bank, acting reasonably, determines that the Bills do not
comply with the then current Bank of England regulations for
Sterling bankers' acceptances
the Bank shall notify the Company by 12.00 p.m. on the Utilisation Date
of the fact and that this Clause is in operation.
12.5 After any notification under Clause 12.4 above:
12.5.1 those Bills shall not be accepted;
12.5.2 in the case of Clause 12.4.1, no further Requests for Bills
may be delivered until the Bank notifies the Company that it
is once again able to determine EBDR; and
12.5.3 unless the relevant Borrower, by notice to the Bank by 12.30
p.m. on the relevant Utilisation Date, elects for the
telephone notice of Utilisation or Request for Bills to be
cancelled without penalty, the said notice or Request shall be
deemed to have been a request for an Advance of an amount
equal to the Requested Amount and for a Term equal to the Term
specified in the telephone notice or Request (or if the Bank
does not agree to that Term, then for a Term of 3 months) to
be made available to such Borrower on such Utilisation Date.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or regulation
after the Signing Date, or of any change in the application or
interpretation of any such changed law or regulation or compliance by
the Bank with any such changed law or regulation after the Signing Date
(including, without limitation, any law or regulation relating to
taxation, any reserve, special deposit, cash ratio, liquidity or
capital adequacy requirement or any form of banking or monetary control
but excluding (i) changes arising from the implementation by any
authority having jurisdiction over the Bank or its holding company of
the matters set out in the statement prepared by the Basle Committee on
Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising from
the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the Bank
will promptly notify the Company of the relevant event and the Company
shall on demand pay
-25-
<PAGE> 26
to the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "increased cost" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances comprised
in a class of advances formed by or including the Advances
made or to be made by it under this Agreement as is
attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the effective
return to the Bank under this Agreement or on its capital; or
13.2.4 any payment made or interest or other return on or calculated
by reference to any amount received or receivable by the Bank
under this Agreement which is forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall
net income of the Bank (or the overall net income of a
division or branch of the Bank) imposed in the jurisdiction in
which its principal office or the relevant lending office for
the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time
of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the assigning,
transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
-26-
<PAGE> 27
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain
any Utilisation, then the Bank shall notify the Company accordingly and
on the Maturity Date of each relevant Utilisation (or such earlier date
as the relevant law or directive may require):-
14.1.1 the relevant Borrower shall repay or prepay, as the case may
be, any Advances made to it by the Bank together with all
other amounts payable by it to the Bank under this Agreement;
and
14.1.2 the Company's obligations under Clause 8.1 (Payment of Bills)
in respect of Bills accepted by the Bank shall immediately
become due for performance and the Company shall immediately
perform those obligations.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation in
relation to all or all affected Advances and Bills on the Bank.
15.2 On the tenth Business Day after the date of service of the notice:
15.2.1 each Borrower shall prepay the relevant Advance or Advances
made to it by the Bank together with all other amounts in
relation to such Advance(s) payable by it to the Bank under
this Agreement; and
15.2.2 each Borrower's obligations under Clause 8.1 (Payment of
Bills) in respect of Bills accepted by the Bank shall
immediately become due for performance and the relevant
Borrowers shall immediately perform those obligations.
15.3 To the extent of the Utilisations referred to in the notice of
prepayment and cancellation, but not further or otherwise, the Bank's
Commitment shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
-27-
<PAGE> 28
15.4.2 any increased cost becoming payable under Clause 13 (Increased
Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably open
to it to mitigate or remove those circumstances (including seeking
recovery for the account of the relevant Borrower where reasonably
practicable and/or transferring its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this Agreement
(including, without limitation, under the Clauses referred to
in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any judicial
order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
-28-
<PAGE> 29
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by, this
Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they were
drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to
the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the UK
consistently applied or if not consistently applied
together with details of the changes in such application;
and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the consolidated
financial condition of the companies comprising the Group
as at the date to which they were drawn up, and the
results of its consolidated operations for the year ended
on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts
were drawn up which would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.
-29-
<PAGE> 30
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive
the execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and warranties
set out in Clauses 16.2 to 16.10 shall be deemed to be repeated by the
Company and the relevant Borrower on the date of each Request made by
such Borrower and the date of each Utilisation made to such Borrower
with reference to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this Agreement
or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within 180
days of the end of each of its financial years) the audited
consolidated accounts of the Group for that financial year;
17.2.2 as soon as the same are available (and in any event within 150
days of the end of the first half-year of each of its
financial years) the interim statement of the Company for that
half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable detail
showing the bases for the list; and
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require.
-30-
<PAGE> 31
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals, the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of Consolidated
Tangible Net Worth (as shown in the latest audited accounts of
the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per
cent. of Consolidated Tangible Net Worth (as shown in the
latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
-31-
<PAGE> 32
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than 3
to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not a
Borrower it will only be an Event of Default if the event is, in the
reasonable opinion of the Bank, reasonably likely to affect materially
and adversely the Company's ability to perform its obligations under
this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable
by it under this Agreement at the place at and in the currency in which
it is expressed to be payable and the default is not remedied within
seven Business Days after the Bank gives notice to the Company and the
relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case of
a breach capable of being remedied) fails to remedy the breach within
fourteen Business Days after the date on which the Company and the
relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary:
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand as
a result of an event of default (howsoever described) under
the document relating to those Borrowings,
-32-
<PAGE> 33
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due or
to be insolvent, or admits inability to pay its debts generally as they
fall due.
18.7 Any Borrower or Material Subsidiary suspends making payments on all or
any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened
to consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a meeting)
is taken with a view to a composition, assignment or
arrangement with any creditors of, or the rehabilitation,
administration, custodianship, liquidation, or dissolution of,
any Borrower or Material Subsidiary or any other insolvency
proceedings involving any Borrower or Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material Subsidiary
becomes subject to or enters into any of the foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary or
any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent not to
be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect
of any Borrower or Material Subsidiary or any substantial part of its
assets.
-33-
<PAGE> 34
18.10 Any Borrower or Material Subsidiary requests any person to appoint such
a receiver or manager.
CREDITORS' process
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound
Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of those mentioned in Clauses 18.6 to 18.11 (inclusive) in
particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or
any other applicable United States federal or state
bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower
or Material Subsidiary in an involuntary case under the United
States federal bankruptcy laws, as now or hereafter
constituted, or any other applicable United States federal or
state bankruptcy, insolvency or other similar law and such
decree or order shall continue unstayed and in effect for a
period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry on
all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 declare that each Borrower's obligations under Clause 8.1
(Payment of Bills) in respect of all outstanding Bills are
immediately due and payable whereupon they shall become
immediately due and payable; and/or
18.14.3 demand that all the Advances, together with accrued interest,
and all other amounts accrued under this Agreement, be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
-34-
<PAGE> 35
18.14.4 demand that all the Advances be payable on demand, whereupon
they shall immediately become payable on demand together with
all other amounts accrued under this Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound Sterling
*. The arrangement fee is payable within 30 days of the Signing
Date or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period in
respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each six
month period with the first such period commencing on the Signing Date
and the last such period (adjusted as appropriate) ending on the Final
Maturity Date and shall be paid in arrear on the last day of each such
period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax
or any other tax which might be chargeable in connection with that fee.
If any value added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by the Company
and relating to this Agreement or a document referred to
herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
-35-
<PAGE> 36
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an Event
of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or as a
result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
less than the amount owed in the contractual currency, the
relevant Borrower shall, forthwith on demand, pay to the Bank
an amount in the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any such
conversion; and
-36-
<PAGE> 37
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
more than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount in
the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in which
it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received
from any source otherwise than on its Maturity Date and, for
the purposes of this sub-Clause 22.3.3, the Maturity Date of
an overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower has
delivered a notice of Utilisation by telephone or a Request
(save where such notice or Request is expressly permitted to
be cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance or Bill.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees
to pay to the Bank from time to time on demand any and every
sum or sums of money which each Borrower shall at any time be
liable to pay to the Bank under or pursuant to this Agreement
and which shall not have been paid at the time such demand is
made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from time
to time on demand by the Bank from and against any loss
incurred by the Bank as a result of any of the obligations of
each Borrower under or pursuant to this Agreement becoming
void, voidable, unenforceable or ineffective as against each
such Borrower for any reason whatsoever, whether or not known
to the Bank, the
-37-
<PAGE> 38
amount of such loss being the amount which the person or
persons suffering it would otherwise have been entitled to
recover from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all
or any of the obligations of the Borrowers under this Agreement and
shall continue in full force and effect until final payment in full of
all amounts owing by the Borrowers thereunder and total satisfaction of
all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise affected
by:
22.7.1 the winding-up, dissolution, administration or re-organisation
of any Borrower or any other person or any change in its
status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be granted
to any Borrower in respect of its obligations hereunder or
under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver of
or release of any obligation of any Borrower hereunder or
under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in respect
of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers or
remedies conferred upon the Bank by this Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or
any other person being avoided or
-38-
<PAGE> 39
reduced by virtue of any provisions or enactments relating to
bankruptcy, insolvency, liquidation or similar laws of general
application for the time being in force and, if any such security or
payment is so avoided or reduced, the Bank shall be entitled to recover
the value or amount of such security or payment from the Company
subsequently as if such settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against any
other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank hereunder
or of any other security taken pursuant to, or in connection
with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
-39-
<PAGE> 40
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which it
relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee payable
pursuant to Clause 19.2 (Commitment fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year
of 365 days, or, in the case of interest payable on an amount
denominated in an Optional Currency, 360 days.
23.4 Acceptance commission and discounting in respect of a Bill is
calculated on the basis of the number of days in the Term of that Bill
and a year of 365 days.
24. AMENDMENTS
No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on behalf
of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement without
the prior written consent of the Company (such consent not to be
unreasonably withheld) provided that such consent shall not be required
where the assignee or transferee is an Affiliate of the Bank which is a
Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer, participation,
sub-participation or other agreement in relation to this Agreement it
shall notify the Company in advance of its intention and of the
identity of the proposed transferee, participant, sub-participant or
other party to such agreement and the amount of the proposed transfer,
participation, sub-participation, or other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into, any
kind of transfer, participation, sub-participation or other agreement
in relation to this Agreement:
-40-
<PAGE> 41
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but only
if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the
Bank's Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein, all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
-41-
<PAGE> 42
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that
place.
ADDRESSES FOR NOTICES
30.2 The address, telex and facsimile number of each Party for all notices
under, or in connection with, this Agreement, is:
30.2.1 that notified by that Party for this purpose to the other
Party; or
30.2.2 any other notified by that Party for this purpose to the other
by not less than five Business Days' notice.
30.3 The address, telex and facsimile number:
30.3.1 of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
30.3.2 of the Bank is:
75 King William Street
London
EC4N 7DT
Attention: Debbie Dyson
Facsimile No 0171 410 8001
-42-
<PAGE> 43
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering or
procuring the delivery to the Bank a Borrower's Accession Notice duly
executed by the Company and the relevant Subsidiary provided that if
such Subsidiary is not resident in the United Kingdom for tax purposes
the Company and the Bank agree to make such amendments to this
Agreement as may be reasonably required at the time in order to allow
such Subsidiary to pay interest to the Bank without deduction or
withholding of any Relevant Tax and to provide such Subsidiary with
equivalent rights, mutatis mutandis, to those contained in Clause 11.4
(Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has
confirmed to the Company that it has received, in form and substance
satisfactory to it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligations under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of such
notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country
shall be translated into, or paid in, the currency unit of
that country designated by the Bank acting reasonably and in
consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be at
the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Bank acting
reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of it
and the new currency and to put the Bank and the Borrowers in the same
-43-
<PAGE> 44
position, so far as is possible, that they would have been in if no
change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new currency
in all or any part of the European Union will not result in the
discharge cancellation, rescission or termination in whole or in part
of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement in
whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
33.1 This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken together
shall be delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on its
behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in Clause
34.2 shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against any of the Borrowers in any other
court of competent jurisdiction nor shall the taking of
-44-
<PAGE> 45
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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-45-
<PAGE> 46
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
DEN DANSKE BANK LONDON BRANCH
By: /s/B. P. Newley
B. P. Newley
By: /s/C. R. Powell
C. R. Powell
<PAGE> 1
EXHIBIT (b)(9)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) BARCLAYS BANK PLC of 54 Lombard Street, London EC3P 3AH (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any
of the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
-1-
<PAGE> 2
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET (or any other suitable
settlement system the Company and the Bank have agreed on) is
operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 20,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means 364 days after the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating thereto, in the acquisition of assets of
a kind generally used by the Group in its business
operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
-4-
<PAGE> 5
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such
company within the terms (in existence on the date when the
-5-
<PAGE> 6
company becomes a member of the Group) of an overdraft (or
other equivalent) facility granted to such company prior to
its becoming a member of the Group) has not been increased
in contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
-6-
<PAGE> 7
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day
in a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of Pound
Sterling 1,000,000 and an integral multiple of
Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
-10-
<PAGE> 11
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
-11-
<PAGE> 12
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only
for the period up to and including the Maturity Date of
that Advance); and
-12-
<PAGE> 13
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the
-13-
<PAGE> 14
amount by which the Maturing Advance exceeds the
New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware
thereof notify the Bank specifying the date of such
acquisition and the name of such person or persons
acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control
of the Company were approved by the Board of Directors
of the Company and the Maturity Date for any Advance
requested falls on a date not more than three months
after the expiration of the 30 day period referred to
in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request an Advance without
the limitation referred to in sub-Clause 8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date
-14-
<PAGE> 15
falling three months after the end of such period, together
with accrued interest thereon up to the date of payment and
all other amounts payable to the Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately
available funds, or at such times or in such funds as the
Bank may specify to the relevant Borrower as being
customary at the time for the settlement of transactions
in the relevant currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
-15-
<PAGE> 16
9.3 A repayment or prepayment of an Advance is payable in the currency
in which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due
but unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
-16-
<PAGE> 17
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the
-17-
<PAGE> 18
aggregate Original Sterling Amount of all Advances outstanding on
such date exceeds the Commitment, then any excess shall be repaid to
the Bank by the relevant Borrower upon the Bank's first written
demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
Credit"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief,
-18-
<PAGE> 19
credit or deduction available to it. The Bank is not obliged to
disclose any information regarding its tax affairs or computations to
any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification
-19-
<PAGE> 20
under sub-Clause 12.1.2) on the Rate Fixing Day: (i) elect
for the notice of Utilisation by telephone or the Request
to be cancelled without penalty; (ii) if the Advance was to
be made in an Optional Currency, elect for the Advance to
be made in an Optional Currency other than a currency
affected by the event specified in the notification or
(iii) elect for the Advance to be made in accordance with
the Request notwithstanding the event specified in the
notification. If any Borrower requires an affected Advance
to be made in the original currency selected for such
Advance notwithstanding the event specified in the
notification then within five Business Days of receipt of
the notification, the Company and the Bank shall enter into
negotiations for a period of not more than 25 days with a
view to agreeing a substitute basis for determining the
rate of interest and/or funding applicable to the affected
Advance and any future Advances in the currency of the
affected Advance provided that if no substitute basis is
agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
-20-
<PAGE> 21
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
-21-
<PAGE> 22
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause
25 (Changes to the Parties), but only to the extent that
the increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro
other than an increased cost which is being incurred
generally by banks transacting euro business in the London
interbank market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
-22-
<PAGE> 23
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the
Clauses referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
-23-
<PAGE> 24
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association
or other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any
of its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
-24-
<PAGE> 25
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
-24-
<PAGE> 26
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
-26-
<PAGE> 27
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
-27-
<PAGE> 28
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent
not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
-28-
<PAGE> 29
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound Sterling
1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
-29-
<PAGE> 30
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound
Sterling *. The arrangement fee is payable within 30 days of the
Signing Date or (if earlier) the date of the first Utilisation.
VAT
19.2 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
-30-
<PAGE> 31
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more than the amount owed in the contractual currency
the Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is
-31-
<PAGE> 32
the last day of each Designated Term (as defined in Clause
7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
-32-
<PAGE> 33
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers
or remedies conferred upon the Bank by this Agreement or by
law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
-33-
<PAGE> 34
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
-34-
<PAGE> 35
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld or delayed) provided that such consent shall
not be required where the assignee or transferee is an Affiliate of
the Bank which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld
or delayed) any person with whom it is proposing to enter, or has
entered into, any kind of transfer, participation, sub-participation
or other agreement in relation to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank
-35-
<PAGE> 36
to such Borrower, regardless of the place of payment, booking branch
or currency of either obligation. If the obligations are in different
currencies, the Bank may convert either obligation at the Bank's Spot
Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
-36-
<PAGE> 37
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
3rd Floor
54 Lombard Street
London EC3P 3AH
Attention: Steve Dawes
Facsimile No: 0171 699 3728
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the Bank a Borrower's Accession Notice
duly executed by the Company and the relevant Subsidiary provided
that if such Subsidiary is not resident in the United Kingdom for tax
purposes the Company and the Bank agree to make such amendments to
this Agreement as may be reasonably required at the time in order to
allow such Subsidiary to pay interest to the Bank without deduction
or withholding of any Relevant Tax and to provide such Subsidiary
with equivalent rights, mutatis mutandis, to those contained in
Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
-37-
<PAGE> 38
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement
in whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
-38-
<PAGE> 39
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-39-
<PAGE> 40
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
BARCLAYS BANK PLC
By: /s/S.C. Dawes
S.C. Dawes, Relationship Director
-40-
<PAGE> 1
EXHIBIT (b)(10)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) MIDLAND BANK PLC of 27-32 Poultry, London EC2P 2BX (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
wholly owned Subsidiary of the Company which has executed and
delivered a Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
-1-
<PAGE> 2
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 15,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
-2-
<PAGE> 3
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means 364 days after the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
-3-
<PAGE> 4
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and
of approximately equal or higher value;
(ii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
(iii) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(iv) disposals of any undertaking or assets to any other member
of the Group;
-4-
<PAGE> 5
(v) disposals in the ordinary course of business; and
(vi) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the company
becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
-5-
<PAGE> 6
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
-6-
<PAGE> 7
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or
in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "Pound Sterling" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a
Request for these Advances; and
"UTILISATION DATE" means the date for the making of the Advance(s).
-7-
<PAGE> 8
1.2 In this Agreement, unless the contrary intention appears, a
reference to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
-8-
<PAGE> 9
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
-9-
<PAGE> 10
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on
those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under the
Revolving Multi-Currency Credit Facility Agreement
dated 17th May 1993 (as amended) made between the
Company and the Bank, the "Existing Outstandings",
shall have been repaid or prepaid in full and the
aggregate commitments under such facility agreement
cancelled on the day of such repayment or
prepayment; or
(b) the amount of the first Utilisation together with
other sums available to the Borrower shall be used
to repay or prepay the Existing Outstandings and the
aggregate commitments under such facility agreement
cancelled on the day of such repayment or
prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
-10-
<PAGE> 11
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum
of Pound Sterling 1,000,000 and an integral multiple
of Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US $100,000;
or
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the
amounts agreed between the relevant Borrower and the
Bank before the telephone notice of Utilisation or
delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
-11-
<PAGE> 12
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel
the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently
be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the
aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
-12-
<PAGE> 13
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
-13-
<PAGE> 14
8.1.2 to the extent that a Maturing Advance is so deemed
to have been repaid, the principal amount of the New
Advance to be made on such a date shall be deemed to
have been credited to the account of such Borrower
by the Bank in accordance with the terms of this
Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to
such Borrower pursuant to Clause 5.6 a principal
amount equal to the amount (if any) by which the New
Advance exceeds the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the
Bank pursuant to this Clause 8.1 a principal amount
equal to the amount by which the Maturing Advance
exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank;
8.5.2 whereupon, unless the Bank otherwise agrees, the Facility
shall be cancelled and all outstanding Advances shall be
repaid on or before the date falling 30 days after the date
the Bank receives the notification from the Company
referred to in sub-clause 8.5.1 together with accrued
interest thereon up to the date of payment and all other
amounts payable to the Bank hereunder.
8.6 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
-14-
<PAGE> 15
8.7 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as
otherwise provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
-15-
<PAGE> 16
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs
and expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees
due but unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued
interest due but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due
but unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due
but unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5 above
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
-16-
<PAGE> 17
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might
contravene any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives
-17-
<PAGE> 18
a net amount equal to the full amount which it would have received
had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or
to claim a Tax Credit in priority to any other claim, relief, credit
or deduction available to it. The Bank is not obliged to disclose any
information regarding its tax affairs or computations to any
Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
-18-
<PAGE> 19
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in
the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business
Days of receipt of the notification, the Company and the
Bank shall enter into negotiations for a period of not more
than 25 days with a view to agreeing a substitute basis for
determining the rate of interest and/or funding applicable
to the affected Advance and any
-19-
<PAGE> 20
future Advances in the currency of the affected Advance
provided that if no substitute basis is agreed within that
period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each relevant
Borrower unless the Company gives notice to the Bank
within five Business Days of the receipt of the
certificate that the certificate is not acceptable
and that each relevant Borrower shall prepay in full
the relevant Advances on a Business Day specified in
the notice, which shall be not less than five nor
more than thirty days after the date of the Bank's
certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the last
day of its Term, as being the cost to the Bank of
funding the Advance from such other sources as it
may reasonably select; and
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled
-20-
<PAGE> 21
"International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising
from the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the
Bank will promptly notify the Company of the relevant event and the
Company shall on demand pay to the Bank such amount as the Bank
certifies in the demand will compensate it for the applicable
increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
-21-
<PAGE> 22
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result
in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or
-22-
<PAGE> 23
transferring its rights and obligations under this Agreement to
another bank or financial institution acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 the obligations of any Borrower under this Agreement
(including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
-23-
<PAGE> 24
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the
UK consistently applied or if not consistently
applied together with details of the changes in such
application; and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the
consolidated financial condition of the companies
comprising the Group as at the date to which they
were drawn up, and the results of its consolidated
operations for the year ended on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
-24-
<PAGE> 25
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
-25-
<PAGE> 26
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
-26-
<PAGE> 27
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
-27-
<PAGE> 28
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent
not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of
-28-
<PAGE> 29
those mentioned in Clauses 18.6 to 18.11 (inclusive) in particular
without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound
Sterling 10,000. The arrangement fee is payable within 30 days
of the Signing Date or (if earlier) the date of the first
Utilisation.
-29-
<PAGE> 30
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period
in respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid in arrear on the last day of
each such period. Accrued commitment fee is also payable to the Bank
on the cancelled amount of the Commitment at the time the
cancellation takes effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
-30-
<PAGE> 31
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more than the amount owed in the contractual currency
the Bank shall promptly account to the relevant Borrower an
amount in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
-31-
<PAGE> 32
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect
-32-
<PAGE> 33
until final payment in full of all amounts owing by the Borrowers
thereunder and total satisfaction of all actual and contingent
obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the rights, powers
or remedies conferred upon the Bank by this Agreement or by
law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
-33-
<PAGE> 34
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
-34-
<PAGE> 35
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer, participation, sub-participation or other
agreement in relation to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
-35-
<PAGE> 36
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
-36-
<PAGE> 37
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to the
other Party; or
(b) any other notified by that Party for this purpose to
the other by not less than five Business Days'
notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
27-32 Poultry
London EC2P 2BX
Attention: Phil Mills
Telex: 888401
Facsimile No: 0171 260 4227
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the Bank a Borrower's Accession Notice
duly executed by the Company and the relevant Subsidiary provided
that if such Subsidiary is not resident in the United Kingdom for tax
purposes the Company and the Bank agree to make such amendments to
this Agreement as may be reasonably required at the time in order to
allow such Subsidiary to pay interest to the Bank without deduction
or withholding of any Relevant Tax and to provide such Subsidiary
with equivalent rights, mutatis mutandis, to those contained in
Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company
-37-
<PAGE> 38
that it has received, in form and substance satisfactory to it, all
the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement
in whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
-38-
<PAGE> 39
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-39-
<PAGE> 40
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
MIDLAND BANK plc
By:/s/Philip Mills
Philip Mills
-40-
<PAGE> 1
EXHIBIT (b)(11)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) NATIONAL WESTMINSTER BANK PLC of 41 Lothbury, London EC2P 2BP (the
"BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or
the obligation of the Bank to make Advances ceases pursuant to any of
the provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
-1-
<PAGE> 2
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of (pound)20,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
-2-
<PAGE> 3
"DOLLARS" or "US $" means the lawful currency for the time being of
the United States of America;
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means 364 days after the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term and for delivery on
the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of that Advance,
expressed as a rate per annum and determined in accordance with
Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
-3-
<PAGE> 4
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(iii) disposals of any undertaking or assets to any other member
of the Group;
(iv) disposals in the ordinary course of business; and
-4-
<PAGE> 5
(v) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or (iii) any lien arising by operation
of law in the ordinary course of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the company
becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings
-5-
<PAGE> 6
incurred to acquire such property) such Security Interest
is discharged to the satisfaction of the Bank within 12
months of such company becoming a member of the Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
(ii) in relation to an Advance denominated in an Optional
Currency, the second Business Day before its Utilisation
Date;
RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
-6-
<PAGE> 7
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the
time being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Advances made or to be made hereunder
following the giving by a Borrower of a Request for these Advances;
and
"UTILISATION DATE" means the date for the making of the Advance(s).
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
-7-
<PAGE> 8
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding day in the month
in which that period ends, that period shall end on the
last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
-8-
<PAGE> 9
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period
and when requested by a Borrower, make to such Borrower Advances upon
and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
-9-
<PAGE> 10
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under
the Revolving Multi-Currency Credit Facility
Agreement dated 14th May 1993 (as amended)
between the Company and the Bank, the "Existing
Outstandings", shall have been repaid or prepaid
in full and the aggregate commitments under such
facility agreement cancelled on the day of such
repayment or prepayment; or
(b) the amount of the first Utilisation together
with other sums available to the Borrower shall
be used to repay or prepay the Existing
Outstandings and the aggregate commitments under
such facility agreement cancelled on the day of
such repayment or prepayment.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close
of business in London on the day on which such telephone notice is,
or is deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum of
Pound Sterling 1,000,000 and an integral
multiple of Pound Sterling 100,000; or
-10-
<PAGE> 11
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed between the relevant Borrower
and the Bank before the telephone notice of
Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Advance available to the relevant Borrower on the relevant
Utilisation Date.
-11-
<PAGE> 12
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per
annum determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling
six months after its Utilisation Date.
-12-
<PAGE> 13
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive Terms of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is
equal to or greater than the Maturing Advance) or in part
(if the New Advance is less than the Maturing Advance); and
-13-
<PAGE> 14
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited
to the account of such Borrower by the Bank in accordance
with the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Advance exceeds the Maturing
Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the amount by which the Maturing
Advance exceeds the New Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums
(if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of
the Company were approved by the Board of Directors of the
Company and the Maturity Date for any Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.5.1
and shall be entitled to give notice of
-14-
<PAGE> 15
continuance of the Facility provided hereunder to the Company. Upon
receipt of such notice of continuance, the right of the Borrowers to
request an Advance without the limitation referred to in sub-Clause
8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.6 above, the Company
has not received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of
such period, together with accrued interest thereon up to
the date of payment and all other amounts payable to the
Bank hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not
later than three months after the end of such period shall
be repaid on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.5.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
-15-
<PAGE> 16
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
-16-
<PAGE> 17
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional
Currency unless the Bank has confirmed to such Borrower that the
Optional Currency is readily available and freely transferable in the
London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
-17-
<PAGE> 18
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the
new Term in accordance with the terms and conditions of this
Agreement and if on the relevant Utilisation Date the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against
-18-
<PAGE> 19
tax by reason of that Tax Payment (a "TAX CREDIT"), and the Bank is
able to identify the Tax Credit as being attributable to the Tax
Payment, then the Bank shall reimburse to the relevant Borrower such
amount as the Bank reasonably determines to be the proportion of the
Tax Credit as will leave the Bank (after that reimbursement) in no
better or worse position that it would have been if the Tax Payment
had not been required. Nothing in this Clause interferes with the
right of the Bank to arrange its tax affairs in whatever manner it
thinks fit and, without prejudice to the foregoing, the Bank is under
no obligation to claim a Tax Credit, or to claim a Tax Credit in
priority to any other claim, relief, credit or deduction available to
it. The Bank is not obliged to disclose any information regarding its
tax affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower shall be liable to pay to the Bank under Clause 11.1
(Gross-up) any amount in respect of taxes levied or imposed by the UK
or any taxing authority thereof or therein in excess of the amount it
would have been obliged to pay if the Bank had been or had not ceased
to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance
shall be made in Sterling in an amount equal to its
Original Sterling Amount (unless Sterling was the original
currency of the relevant Advance);
-19-
<PAGE> 20
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
12.2. the relevant Borrower may, by notice to the Bank by 11.00
a.m. (or, if later, within 30 minutes of receipt by the
Company of a notification under sub-Clause 12.1.2) on the
Rate Fixing Day: (i) elect for the notice of Utilisation by
telephone or the Request to be cancelled without penalty;
(ii) if the Advance was to be made in an Optional Currency,
elect for the Advance to be made in an Optional Currency
other than a currency affected by the event specified in
the notification or (iii) elect for the Advance to be made
in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency
selected for such Advance notwithstanding the event
specified in the notification then within five Business
Days of receipt of the notification, the Company and the
Bank shall enter into negotiations for a period of not more
than 25 days with a view to agreeing a substitute basis for
determining the rate of interest and/or funding applicable
to the affected Advance and any future Advances in the
currency of the affected Advance provided that if no
substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such
certificate to be conclusive) the alternative
interest rate calculated in accordance with
sub-Clause 12.2.4 below;
(b) the certificate may make provision for different
funding periods and shall be retroactive to the
beginning of the then current Term; and
(c) the certificate shall be binding on each
relevant Borrower unless the Company gives
notice to the Bank within five Business Days of
the receipt of the certificate that the
certificate is not acceptable and that each
relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in
the notice, which shall be not less than five
nor more than thirty days after the date of the
Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the
last day of its Term, as being the cost to the
Bank of funding the Advance from such other
sources as it may reasonably select; and
-20-
<PAGE> 21
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
-21-
<PAGE> 22
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date of each relevant Advance (or
such earlier date as the relevant law or directive may require) the
relevant Borrower shall repay or prepay, as the case may be, any
Advances made to it by the Bank together with all other amounts
payable by it to the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the
-22-
<PAGE> 23
Bank together with all other amounts in relation to such Advance(s)
payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
-23-
<PAGE> 24
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
-24-
<PAGE> 25
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower and the date of each Utilisation made
to such Borrower with reference to the facts and circumstances then
existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
-25-
<PAGE> 26
17.3.2 Such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
-26-
<PAGE> 27
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
-27-
<PAGE> 28
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such
consent not to be unreasonably withheld).
-28-
<PAGE> 29
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
-29-
<PAGE> 30
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of
Pound Sterling *. The arrangement fee is payable within 30
days of the Signing Date or (if earlier) the date of the first
Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the
average daily amount of the unutilised Commitment during each period
in respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid in arrear on the last day of
each such period. Accrued commitment fee is also payable to the Bank
on the cancelled amount of the Commitment at the time the
cancellation takes effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
-30-
<PAGE> 31
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more
-31-
<PAGE> 32
than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount
in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date and, for the purposes of this sub-Clause 22.3.3, the
Maturity Date of an overdue amount is the last day of each
Designated Term (as defined in Clause 7.3 (Default
interest)); or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
-32-
<PAGE> 33
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the
-33-
<PAGE> 34
rights, powers or remedies conferred upon the Bank by this
Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
-34-
<PAGE> 35
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer,
-35-
<PAGE> 36
participation, sub-participation or other agreement in relation to
this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
-36-
<PAGE> 37
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
6th Floor,
1 Princes Street
London EC2R 8PB
Attention: Seamus Toal
Facsimile No: 0171 390 1797
-37-
<PAGE> 38
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the Bank a Borrower's Accession Notice
duly executed by the Company and the relevant Subsidiary provided
that if such Subsidiary is not resident in the United Kingdom for tax
purposes the Company and the Bank agree to make such amendments to
this Agreement as may be reasonably required at the time in order to
allow such Subsidiary to pay interest to the Bank without deduction
or withholding of any Relevant Tax and to provide such Subsidiary
with equivalent rights, mutatis mutandis, to those contained in
Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
-38-
<PAGE> 39
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement
in whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for such purposes, irrevocably submits to the
jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
-39-
<PAGE> 40
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
NATIONAL WESTMINSTER BANK Plc
By:/s/Seamus Toal
Seamus Toal
Corporate Manager
-41-
<PAGE> 1
EXHIBIT (b)(12)
THIS AGREEMENT is dated 22nd December, 1998
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) ROYAL BANK OF CANADA EUROPE LIMITED of 71 Queen Victoria Street,
London EC4V 4DE (the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a
Borrower's Accession Notice;
"ADVANCE" means a Revolving Advance or a Term Advance hereunder;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) Availability Period End Date and (2)
the date on which the Commitment is terminated or cancelled in full
or the obligation of the Bank to make Advances ceases pursuant to any
of the provisions of this Agreement;
"AVAILABILITY PERIOD END DATE" means in relation to the Revolving
Facility, 364 days after the Signing Date as extended by Clause 6.6;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a
document or notice, a person who is authorised under the then current
Board Authority for Financial Transactions or such other mandate as
may be presented in its place to the Bank signed by any two Directors
or one Director and the Secretary of such Borrower, to give, execute
or despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot
rate of exchange for the purchase of the relevant Optional Currency
in the London foreign exchange market with Sterling at or about 11.00
a.m. on that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to
Clause 31.4 and "Borrower" means any one of them;
-1-
<PAGE> 2
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the
form set out in Schedule 5;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount
of interest receivable by any member of the Group during such
Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet
of the Group, and those which are guaranteed by members of the Group
to the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the
Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on
which banks and the relevant financial markets are open for business
in London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 15,000,000 as reduced
in accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or
credited as paid up on the issued share capital of the Company, plus
the aggregate amounts standing to the credit of the consolidated
reserves of the Group (including any share premium account or capital
redemption reserve fund and adding or deducting any balance standing
to the credit or debit of the consolidated profit and loss account of
the Group and including the consolidated portion of the reserves of
associates) plus any amount appearing in the consolidated balance
sheet in respect of deferred income relating to government grants,
deferred taxation and minority interests and less goodwill and other
intangibles, all amounts being construed in accordance with
accounting principles generally accepted in the United Kingdom and
consistently applied;
"CONVERSION DATE" has the meaning ascribed to it in Clause 5.7;
-2-
<PAGE> 3
"CONVERSION NOTICE" has the meaning ascribed to it in Clause 5.7;
"DEFAULT" means an Event of Default or an event which, with the
giving of notice, lapse of time, determination of materiality or
fulfilment of any other applicable condition (or any combination of
the foregoing) in each case as specified in Clause 18, would
constitute an Event of Default;
"DOLLARS" OR "US $" means the lawful currency for the time being of
the United States of America;
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITIES" means the Revolving Facility and the Term-out Facility;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"INTEREST PERIOD" in relation to a Term Advance means a period
ascertained in accordance with Clause 5.7.3;
"LIBOR" means in respect of a particular period, the rate per annum
at which deposits in the relevant currency of the Advance appears on
the Telerate page 3750 (or such other relevant Telerate page as may
be appropriate to such currency) as of 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term (in the case of a
Revolving Advance) or Interest Period (in the case of a Term Advance)
or other period (in relation to an overdue amount) and for delivery
on the first Business Day thereof, save that if such rate does not
appear on the Telerate page 3750 (or such other relevant page) then
the rate per annum at which deposits in the relevant currency and for
the amount of the Advance are offered to the Bank by leading banks in
the London Interbank Market at or about 11.00 a.m. on the applicable
Rate Fixing Date for a period equal to its Term (in the case of a
Revolving Advance) or Interest Period (in the case of a Term Advance)
or other period (in relation to an overdue amount) and for delivery
on the first Business Day thereof (provided that where pursuant to
Clause 12.2.3 the interest rate for an Advance is to be fixed after
11.00 a.m., for the purposes of this definition of "LIBOR", no rate
shall be treated as appearing on Telerate page 3750 (or such other
relevant page) and the time of "1.00 p.m." shall be substituted for
the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of
each Advance of compliance with the Mandatory Cost requirements of
the Bank of England and the banking supervision costs of the
Financial Services Authority during the Term of or, as the case may
be, Interest Period applicable to that Advance, expressed as a rate
per annum and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
-3-
<PAGE> 4
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of
companies whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible
Assets of the Group as shown by a comparison of the latest audited
balance sheet of the Subsidiary (or, in the case of a Subsidiary
within (ii), its latest audited consolidated balance sheet) with the
latest audited consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to a Revolving Advance, the last
day of its Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at
the relevant time is freely transferable and convertible into
Sterling and deposits of which are readily available and freely dealt
in on the London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December, 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in
Sterling, its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange
on the Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any
undertaking or assets of a similar nature and of
approximately equal or higher value;
(ii) the sale of assets for cash and the application within a
period of 180 days, of a sum approximately equal to the net
proceeds relating
-4-
<PAGE> 5
thereto, in the acquisition of assets of a kind generally
used by the Group in its business operations;
(iii) the sale of assets for cash where a sum approximately equal
to the net proceeds relating thereto has been applied in
the acquisition of assets (made during the period of 180
days before the relevant sale) of a kind generally used by
the Group in its business operations;
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member
of the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market
value on arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this
Agreement which has been disclosed in writing to the Bank
prior to the date hereof; or
(ii) any Security Interest which is created with the prior
consent of the Bank; or
(iii) any lien arising by operation of law in the ordinary course
of business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in
the ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title
or insurance policies and sale contracts in relation to
such goods, arising in the ordinary course of business in
connection with letters of credit and similar transactions
where such Security Interest secures only so much of the
acquisition cost of such goods which is required to be paid
within 180 days after the date upon which the sale was
first incurred; or
(vi) any Security Interest over or affecting any property or
asset acquired by a member of the Group after the date
hereof and subject to which such property or asset is
acquired, but only if (a) such Security Interest was not
created in contemplation of the acquisition of such
property or asset by a member of the Group, (b) the amount
thereby secured has not been increased in contemplation of,
or since the date of, the acquisition of such property or
asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of the acquisition of the property or
asset in question; or
-5-
<PAGE> 6
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to
the date on which such company becomes a member of the
Group but only if (a) such Security Interest was not
created in contemplation of such company becoming a member
of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company
within the terms (in existence on the date when the company
becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company
becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company
becoming a member of the Group, over any freehold or
leasehold property solely for the purpose of securing
borrowings incurred to acquire such property) such Security
Interest is discharged to the satisfaction of the Bank
within 12 months of such company becoming a member of the
Group; or
(viii) any Security Interest created after the date hereof over
any freehold or leasehold property of a member of the Group
solely for the purpose of securing borrowings incurred to
acquire such property; or
(ix) any Security Interests created or continuing in connection
with an issue of industrial revenue or development bonds or
in connection with some other similar financing to which
the Bank has previously consented; or
(x) any Security Interest created in substitution for any
Security Interest permitted pursuant to this definition
provided that the substituted Security Interest is over the
same asset and the principal amount secured does not exceed
the principal amount secured on such asset prior to the
substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to
any member of the Group in the ordinary course of its
business by virtue of any retention of title provisions
contained in the relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing,
in aggregate, an amount not exceeding at any time an amount
equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the
Income and Corporation Taxes Act 1988 (or any statutory re-enactment
or modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
-6-
<PAGE> 7
"RATE FIXING DAY" means:
(i) in relation to a Revolving Advance denominated in Sterling,
its Utilisation Date; or
(ii) in relation to a Revolving Advance denominated in an
Optional Currency, the second Business Day before its
Utilisation Date; or
(iii) in relation to a Term Advance denominated in Sterling, the
first day of each Interest Period applicable to it; or
(iv) in relation to a Term Advance denominated in an Optional
Currency, the second Business Day before the commencement
of each Interest Period applicable to it;
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and
the first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Revolving
Facility, substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"REVOLVING ADVANCE" means an advance made by the Bank pursuant to
Clause 5.6 (Payment of Proceeds) or the principal amount outstanding
of that advance prior to the exercise of the Term-out Option;
"REVOLVING FACILITY" means the 364 day revolving multi-currency
advances facility made available to the Borrowers pursuant to Clauses
5.1 to 5.6 inclusive (The Revolving Facility);
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" OR "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing
Costs" and "Operating Profit" means any company whose
accounts are consolidated with the accounts of the Company
in accordance with accounting principles generally accepted
under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by
Section 736 of the Companies Act 1985;
-7-
<PAGE> 8
"TANGIBLE ASSETS" means, in relation to a company, the aggregate
amount of any current and fixed assets of that company as shown in
its latest audited balance sheet or, in the case of a company which
is a holding company of a group of companies, its latest audited
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of
whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross
Settlement Express Transfer System;
"TERM" means, in relation to a Revolving Advance, the period selected
by a Borrower in a Request for which the relevant Revolving Advance
is to be outstanding;
"TERM ADVANCE" means a Revolving Advance which has been converted
into a Term Advance in accordance with the provisions of Clause 5.7;
"TERM ADVANCE MATURITY DATE" means the date one year after the
Availability Period End Date;
"TERM-OUT FACILITY" means the multi-currency term loans facility made
available to the Borrowers pursuant to Clause 5.7 (The Term Out
Facility);
"TERM-OUT OPTION" means the option to convert Revolving Advances into
Term Advances pursuant to Clause 5.7;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into
force on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
"UTILISATION" means all Revolving Advances made or to be made
hereunder following the giving by a Borrower of a Request for these
Advances; and
"UTILISATION DATE" means the date for the making of the Revolving
Advance(s).
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing,
registration and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank
is accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in
a calendar month and ending on the numerically
corresponding day in the next calendar month except that,
if there is no numerically corresponding
-8-
<PAGE> 9
day in the month in which that period ends, that period
shall end on the last Business Day in that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736
of the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this
Agreement under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or
a schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless
otherwise stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between
the substantive provisions of this Agreement and the contents
thereof, the substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a 364 day revolving multi-currency
advances facility with a Term-out Option under which the Bank shall,
during the Availability Period and when requested by a Borrower, make
to such Borrower
-9-
<PAGE> 10
Revolving Advances upon and subject to the terms of this Agreement
which may be converted into Term Advances pursuant to Clause 5.7.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies
and Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Advance made to it towards the general
corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of
the proceeds of any Advance.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date
for that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated
on those dates are correct and will be correct
immediately after the Utilisation; and
(b) no Default is outstanding or might result from
the Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall
facility limit) to be contravened.
-10-
<PAGE> 11
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under
the Revolving Multi-Currency Credit Facility
Agreement dated 14th May 1993 (as amended) made
between the Company and the Bank the "Existing
Outstandings", shall have been repaid or prepaid
in full and the aggregate commitments under such
facility agreements cancelled on the day of such
repayment or prepayment; or
(b) the amount of the first Utilisation together
with other sums available to the Borrower shall
be used to repay or prepay the Existing
Outstandings and the aggregate commitments under
such facility agreement cancelled on the day of
such repayment or prepayment.
5. THE FACILITIES
THE REVOLVING FACILITY
RECEIPT OF REQUESTS FOR REVOLVING ADVANCES
5.1 Any Borrower may utilise the Revolving Facility if the Bank receives,
not later than 10.00 a.m. on the Rate Fixing Day a duly completed
Request, substantially in the form of Schedule 3 and signed by an
Authorised Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Revolving Facility by notifying the Bank
by telephone not later than 10.00 a.m. on the Rate Fixing Day
provided that a notice given by telephone shall be confirmed in
writing by the delivery by the relevant Borrower to the Bank of a
duly completed Request to be actually received by the Bank not later
than the close of business in London on the day on which such
telephone notice is, or is deemed to have been, given.
COMPLETION OF REQUESTS FOR REVOLVING ADVANCES
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested
Amount is:
(a) if the currency is Sterling, a minimum
of Pound Sterling 1,000,000 and an integral
multiple of Pound Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US
$1,000,000 and an integral multiple of US
$100,000; or
(c) if the currency is an Optional Currency other
than Dollars, a minimum and integral multiple of
the amounts agreed
-11-
<PAGE> 12
between the relevant Borrower and the Bank
before the telephone notice of Utilisation or
delivery of that Request; or
(d) such other amounts as the Bank and the relevant
Borrower may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Availability Period End
Date; and
(b) is a period of an approved duration or of an
optional duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it
may also select at the time of the telephone notice of Utilisation
and in the relevant Request a Term of any approved duration to apply
if the selection of a Term of an optional duration becomes
ineffective in accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional
duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m.
on the date of receipt by it of the relevant Request or
telephone notice of Utilisation pursuant to Clause 5.1 or
Clause 5.2 respectively that it does not agree to that
request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the
Revolving Advance available to the relevant Borrower on the relevant
Utilisation Date.
THE TERM-OUT FACILITY
EXERCISE OF THE TERM-OUT OPTION
5.7 5.7.1 The Company may at any time during the Availability Period,
by a notice (a "Conversion Notice") given to the Bank:
-12-
<PAGE> 13
(a) prior to 10.00 a.m. on the last day of the Term
of any Revolving Advance to be converted into a
Term Advance denominated in Sterling; or
(b) prior to 10.00 a.m. on the second Business Day
before the last day of the Term of any Revolving
Advance to be converted into a Term Advance
denominated in an Optional Currency,
convert such Revolving Advance into a Term Advance. Any
such notice shall be in writing, shall be irrevocable, and
shall specify (i) the Revolving Advance to be converted
into a Term Advance, (ii) the date on which the Conversion
Notice is to take effect in respect of such Revolving
Advance (the "Conversion Date") which shall be the last day
of the Term relative thereto, and (iii) the Interest Period
to be applicable to such Term Advance. The Company may in
the Conversion Notice require such Term Advance to be
denominated in a currency (the "New Currency") other than
the currency of the Revolving Advance (the "Original
Currency") and in such case (i) the New Currency shall be
Sterling or an Optional Currency that the Bank confirms is
freely available to it on the applicable Conversion Date;
(ii) the principal amount of such Term Advance shall be the
Original Sterling Amount of the Revolving Advance where the
New Currency is Sterling or the amount of the New Currency
that the Bank determines on the applicable Rate Fixing Day
may be then purchased at the Bank's Spot Rate of Exchange
with such Original Sterling Amount where the New Currency
is an Optional Currency.
5.7.2 A Conversion Notice shall take effect as if it were a
Utilisation and accordingly the Bank shall only be obliged
to give effect to a Conversion Notice where the terms of
Clause 4.2 are satisfied.
5.7.3 Each Term Advance shall have an Interest Period which shall
be of a duration of one, three or six months (or such other
period as may be agreed by the Bank) as selected by the
relevant Borrower by notice to be received by the Bank not
later than 10.00 a.m. (London time) on the Rate Fixing Day
but so that:
(a) the initial Interest Period in respect of each
Term Advance shall commence on its Conversion
Date and shall be that stipulated in the
Conversion Notice by the Company and each
subsequent Interest Period shall commence
forthwith upon the expiry of the previous
Interest Period;
(b) the final Interest Period shall end on the Term
Advance Maturity Date; and
(c) if a Borrower fails to specify the duration of
an Interest Period or the Bank by 10.30 a.m. on
the applicable Rate Fixing Day states that it
does not agree to an Interest Period of other
than one, three or six months, that Interest
Period shall have a duration of three months.
-13-
<PAGE> 14
Notices pursuant to this Clause 5.7.3 may be by telephone or in
writing, provided that if such notice is by telephone, it shall be
confirmed in writing by close of business on the relevant Rate Fixing
Day.
6. CANCELLATION AND EXTENSION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business
on the Availability Period End Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective;
and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be
effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
EXTENSION
6.6 Not more than 60 days but not less than 30 days prior to the
Availability Period End Date the Company may request that the Bank
extend the Revolving Facility for a further period of 364 days. Any
such request shall be irrevocable and in writing. The Bank shall have
absolute discretion as to whether to agree to such an extension, and
the Bank shall advise the Company in writing of its decision not less
than 20 days prior to the Availability Period End Date. If the Bank
agrees to such extension the Revolving Facility shall be extended so
that the Availability Period End Date becomes the day 364 days after
the Availability Period End Date prior to such extension. The right
to request an extension pursuant to this Clause 6.6 may be exercised
until the Bank refuses such an extension but shall not be exercised
after the Company has given any Conversion Notice pursuant to Clause
5.7.
-14-
<PAGE> 15
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term or, as the case may
be, each Interest Period applicable thereto is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Revolving Advance is payable on its Maturity Date and on each
Term Advance is payable on the last day of each Interest Period
applicable to it and also in the case of a Revolving Advance with a
Term longer than six months, or in the case of a Term Advance with an
Interest Period longer than six months, every six months after the
commencement of its Term or Interest Period, as the case may be.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the
overdue amount is an Advance (or part thereof) and only for
the period up to and including the Maturity Date of that
Advance or, as the case may be, the last day of the current
Interest Period applicable to that Advance); and
7.3.2 the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted
an Advance in the currency of the overdue amount for such
successive periods of such duration (not exceeding three
months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term,
as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from
whatever sources it may reasonably select.
-15-
<PAGE> 16
7.6 Default interest shall be compounded at the end of each Designated
Term until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this
Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF REVOLVING ADVANCES
8.1 Each Borrower shall repay each Revolving Advance made to it in full
on its Maturity Date to the Bank. If a Revolving Advance (the "NEW
REVOLVING ADVANCE") is to be made to a Borrower on the day on which
another Revolving Advance (the "MATURING REVOLVING ADVANCE") in the
same currency is due to be repaid by such Borrower then, subject to
the terms of this Agreement and so long as the conditions referred to
in Clause 4.2 shall have been satisfied in relation to the New
Revolving Advance:
8.1.1 the Maturing Revolving Advance shall be deemed to have been
repaid on its Maturity Date either in whole (if the New
Revolving Advance is equal to or greater than the Maturing
Revolving Advance) or in part (if the New Advance is less
than the Maturing Revolving Advance); and
8.1.2 to the extent that a Maturing Revolving Advance is so
deemed to have been repaid, the principal amount of the New
Revolving Advance to be made on such a date shall be deemed
to have been credited to the account of such Borrower by
the Bank in accordance with the terms of this Agreement
and, as the case may be:
(a) the Bank shall only be obliged to make available
to such Borrower pursuant to Clause 5.6 a
principal amount equal to the amount (if any) by
which the New Revolving Advance exceeds the
Maturing Revolving Advance; or
(b) such Borrower shall only be obliged to pay to
the Bank pursuant to this Clause 8.1 a principal
amount equal to the amount by which the Maturing
Revolving Advance exceeds the New Revolving
Advance.
8.2 On the Availability Period End Date, all outstanding Revolving
Advances and other sums (if any) then owing under this Agreement in
relation thereto shall in any event be repaid or paid in full.
REPAYMENT OF TERM ADVANCES
8.3 Each Borrower shall repay each Term Advance made to it and all other
sums (if any) then owing under this Agreement in full on the Term
Advance Maturity Date to the Bank. No Term Advance repaid or prepaid
may be reborrowed.
-16-
<PAGE> 17
PREPAYMENT OF ADVANCES
8.4 Any Borrower may, without penalty and on giving not less than 15
days' prior notice to the Bank, prepay all or any part of an Advance,
but if in part, in a minimum amount of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 (or the comparable
amount in any Optional Currency).
8.5 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.6 Should any person or group of persons, acting either individually or
in concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the
purpose of this Clause a single person or group of persons shall have
acquired control if it or they own or hold more than 50% (fifty per
cent.) of the issued share capital of the Company having the right to
attend and vote at general meetings of the Company or more than 50%
(fifty per cent.) of such rights), then:
8.6.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.6.2 thereafter no Borrower shall be permitted to give a
Conversion Notice or to request a Revolving Advance unless
the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company and the
Maturity Date for any such Revolving Advance requested
falls on a date not more than three months after the
expiration of the 30 day period referred to in Clause 8.7.
8.7 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company, the Bank shall
consult with the Company during the period of 30 days after receipt
of the notification from the Company referred to in sub-Clause 8.6.1
and shall be entitled to give notice of continuance of the Facility
provided hereunder to the Company. Upon receipt of such notice of
continuance, the right of the Borrowers to request Revolving Advances
without the limitation referred to in sub-Clause 8.6.2 and/or to give
a Conversion Notice shall be reinstated.
8.8 If the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company but, at the end of
the period of 30 days referred to in Clause 8.7 above, the Company
has not received a notice of continuance then:
8.8.1 the Facility shall be cancelled;
8.8.2 any outstanding Revolving Advances with Maturity Dates
falling (or, in the case of any Term Advances, where the
Term Advance Maturity Date falls) later than three months
after the end of such period shall be prepaid on the date
falling three months after the end of such period, together
with accrued interest thereon up to the date of payment and
all other amounts payable to the Bank hereunder; and
-17-
<PAGE> 18
8.8.3 any outstanding Advances with Maturity Dates falling (or,
in the case of any Term Advances, where the Term Advance
Maturity Date falls) not later than three months after the
end of such period shall be repaid on their respective
Maturity Dates (or, as the case may be, on the Term Advance
Maturity Date).
8.9 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the
Bank shall have confirmed within 2 days of receipt of the notice
referred to in sub-Clause 8.6.1 that the Facility shall be continued,
the Facility shall be cancelled and any outstanding Advances shall be
repayable on demand by the Bank together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Bank hereunder.
8.10 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3.
8.11 No Advance may be prepaid otherwise than in accordance with the
express terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this
Agreement shall be made to such account at such office or bank in the
principal financial centre of the relevant currency as it may notify
the other or to such other place as may be agreed between the parties
for this purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the
place for payment on the due date in lawful money of the
country of that Optional Currency, in immediately available
funds, or at such times or in such funds as the Bank may
specify to the relevant Borrower as being customary at the
time for the settlement of transactions in the relevant
currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
-18-
<PAGE> 19
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any
Advance requested to be denominated in the currency of a
Participating Member State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit
of a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor,
can be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal
under this Agreement pursuant to Clause 9.9 above interest is payable
on the principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement,
the Bank shall apply that payment towards the obligations of such
Borrower under this Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due
but unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but
unpaid under this Agreement.
-19-
<PAGE> 20
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5
above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request a Revolving Advance denominated in an
Optional Currency unless the Bank has confirmed to such Borrower that
the Optional Currency is readily available and freely transferable in
the London foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of a Revolving Advance to be denominated
in an Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund that Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene
any law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m.
on that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, that
Advance will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, that Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling
Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling
Amount promptly after it has been ascertained.
10.4 If a Revolving Advance which has been drawn in an Optional Currency
is reborrowed in the same Optional Currency immediately following its
repayment or if a Term Advance is denominated in an Optional
Currency, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency or, as the case may be, such
Term Advance shall be recalculated for the new Term or, as the case
may be, each new Interest Period in accordance with the terms and
conditions of this Agreement and if on the
-20-
<PAGE> 21
relevant Utilisation Date or, as the case may be, the first day of
any Interest Period in respect of a Term Advance the aggregate
Original Sterling Amount of all Advances outstanding on such date
exceeds the Commitment, then any excess shall be repaid to the Bank
by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without
deduction for or on account of any Relevant Taxes except to the
extent that any Borrower is required by law to make payment subject
to any such taxes. If any Relevant Tax or amounts in respect of any
Relevant Tax must be deducted from any amounts payable or paid by any
Borrower hereunder, such Borrower shall pay such additional amounts
as may be necessary to ensure that the Bank receives a net amount
equal to the full amount which it would have received had payment not
been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any
other jurisdiction from which, or through which, such payment is made
or to the taxation laws of which the relevant Borrower is at the time
of such payment subject, (iii) any political sub-division of the
United Kingdom or any such other jurisdiction or (iv) any federation
or association of states of which the United Kingdom or any such
other jurisdiction is, at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall
be paid by such Borrower when due (unless the obligation to pay is
being disputed in good faith) and such Borrower shall, within 30 days
of the payment being made, deliver to the Bank evidence satisfactory
to the Bank (including all relevant tax receipts) that the payment
has been duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against tax by reason of that Tax Payment (a "TAX
CREDIT"), and the Bank is able to identify the Tax Credit as being
attributable to the Tax Payment, then the Bank shall reimburse to the
relevant Borrower such amount as the Bank reasonably determines to be
the proportion of the Tax Credit as will leave the Bank (after that
reimbursement) in no better or worse position that it would have been
if the Tax Payment had not been required. Nothing in this Clause
interferes with the right of the Bank to arrange its tax affairs in
whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to
-21-
<PAGE> 22
claim a Tax Credit, or to claim a Tax Credit in priority to any other
claim, relief, credit or deduction available to it. The Bank is not
obliged to disclose any information regarding its tax affairs or
computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any
law or regulation or any practice or concession of the Inland Revenue
after the Signing Date, the Bank ceases to be a Qualifying Bank no
Borrower which is tax resident in the United Kingdom shall be liable
to pay to the Bank under Clause 11.1 (Gross-up) any amount in respect
of taxes levied or imposed by the UK or any taxing authority thereof
or therein in excess of the amount it would have been obliged to pay
if the Bank had been or had not ceased to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Advance:
12.1.1 the Bank is unable to obtain from leading banks a rate for
the purposes of determining the applicable LIBOR or the
Bank otherwise determines that adequate and fair means do
not exist for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in
the London Interbank Market in the ordinary
course of business to fund an Advance; or
(b) the cost to it of matching deposits in the
London Interbank Market would be in excess of
the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon
as is practicable thereafter on the Rate Fixing Day of the
fact and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below if the affected Advance
was a Revolving Advance it shall be made in Sterling in an
amount equal to its Original Sterling Amount (unless
Sterling was the original currency of the relevant
Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances or
Conversion Notices in respect of Term Advances to be
denominated in the original currency of the affected
Advance may be delivered until the Bank notifies the
Company that the event specified in the notification no
longer prevails;
-22-
<PAGE> 23
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00 a.m. (or,
if later, within 30 minutes of receipt by the Company of a
notification under sub-Clause 12.1.2) on the Rate Fixing Day, as the
case may be: (i) elect for the notice of Utilisation by telephone or
the Request to be cancelled without penalty; (ii) if the affected
Advance was a Revolving Advance to be made in an Optional Currency or
is a Term Advance outstanding in an Optional Currency, elect for the
Advance to be made in or converted into an Optional Currency other
than a currency affected by the event specified in the notification
or (iii) elect for the Advance to be made in accordance with the
Request or, if the affected Advance is a Term Advance, elect for the
Advance to be maintained in such currency notwithstanding the event
specified in the notification. If any Borrower requires an affected
Advance to be made in the original currency selected for such Advance
or maintained in such currency notwithstanding the event specified in
the notification then within five Business Days of receipt of the
notification, the Company and the Bank shall enter into negotiations
for a period of not more than 25 days with a view to agreeing a
substitute basis for determining the rate of interest and/or funding
applicable to the affected Advance and any future Advances in the
currency of the affected Advance provided that if no substitute basis
is agreed within that period:
(a) the Bank shall certify to the Company (such certificate to
be conclusive) the alternative interest rate calculated in
accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the
then current Term or, as the case may be, Interest Period;
and
(c) the certificate shall be binding on each relevant Borrower
unless the Company gives notice to the Bank within five
Business Days of the receipt of the certificate that the
certificate is not acceptable and that each relevant
Borrower shall prepay in full the relevant Advances on a
Business Day specified in the notice, which shall be not
less than five nor more than thirty days after the date of
the Bank's certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of interest
on each Advance shall be the rate certified by the Bank as the rate
per annum determined by the Bank to be the aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the last day of
its Term or, as the case may be Interest Period, as being
the cost to the Bank of funding the Advance from such other
sources as it may reasonably select; and
(c) the applicable Mandatory Cost if any.
-23-
<PAGE> 24
12.3 During the period when any substitute basis is in force in relation
to a particular currency, the Bank shall periodically determine
whether the circumstances referred to in Clause 12.1 above still
apply and, if they do not, shall forthwith give notice in writing to
the Company of the date on which the substitute basis will cease to
apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or
regulation after the Signing Date, or of any change in the
application or interpretation of any such changed law or regulation
or compliance by the Bank with any such changed law or regulation
after the Signing Date (including, without limitation, any law or
regulation relating to taxation, any reserve, special deposit, cash
ratio, liquidity or capital adequacy requirement or any form of
banking or monetary control but excluding (i) changes arising from
the implementation by any authority having jurisdiction over the Bank
or its holding company of the matters set out in the statement
prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended
in November 1991) and (ii) changes arising from the implementation in
whole or in part by any authority having jurisdiction over the Bank
or its holding company of the proposals contained in the matters set
out in the EC Directive 93/6/EEC of 15 March 1993 on the capital
adequacy of investment firms and credit institutions) is that the
Bank incurs an increased cost, then the Bank will promptly notify the
Company of the relevant event and the Company shall on demand pay to
the Bank such amount as the Bank certifies in the demand will
compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding
its obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances
comprised in a class of advances formed by or including the
Advances made or to be made by it under this Agreement as
is attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the
effective return to the Bank under this Agreement or on its
capital; or
13.2.4 any payment made or interest or other return on or
calculated by reference to any amount received or
receivable by the Bank under this Agreement which is
forgone.
-24-
<PAGE> 25
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the
overall net income of the Bank (or the overall net income
of a division or branch of the Bank) imposed in the
jurisdiction in which its principal office or the relevant
lending office for the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the
time of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the
assigning, transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of
its obligations as contemplated by this Agreement or to fund or
maintain any Advance, then the Bank shall notify the Company
accordingly and on the Maturity Date or, as the case may be, the last
day of an Interest Period of each relevant Advance (or such earlier
date as the relevant law or directive may require) the relevant
Borrower shall repay or prepay, as the case may be, any Advances made
to it by the Bank together with all other amounts payable by it to
the Bank under this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a
notification under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation
in relation to all or all affected Advances on the Bank.
-25-
<PAGE> 26
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to such
Advance(s) payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13
(Increased Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably
open to it to mitigate or remove those circumstances (including
seeking recovery for the account of the relevant Borrower where
reasonably practicable and/or transferring its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this
Agreement (including, without limitation, under the Clauses
referred to in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in
this Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
-26-
<PAGE> 27
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all
necessary action to authorise the entry into, performance and
delivery of this Agreement and the transactions contemplated by this
Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any
judicial order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by,
this Agreement have been obtained or effected (as appropriate) and
are in full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they
were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered
to the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in
the UK consistently applied or if not
consistently applied together with details of
the changes in such application; and
(b) fairly represent, when read in conjunction with
the relevant notes and auditors' report, the
consolidated financial condition of the
companies comprising the Group as at the date to
which they were drawn up, and the results of its
consolidated operations for the year ended on
that date.
-27-
<PAGE> 28
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated
financial condition of the Group since the date to which the Original
Accounts were drawn up which would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will
survive the execution of this Agreement and the making of each
Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and
warranties set out in Clauses 16.2 to 16.10 shall be deemed to be
repeated by the Company and the relevant Borrower on the date of each
Request made by such Borrower, the date of each Utilisation made to
such Borrower and Conversion Date applicable to such Borrower with
reference to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this
Agreement or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within
180 days of the end of each of its financial years) the
audited consolidated accounts of the Group for that
financial year;
17.2.2 as soon as the same are available (and in any event within
150 days of the end of the first half-year of each of its
financial years) the interim statement of the Company for
that half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in
reasonable detail computations establishing compliance with
Clause 17.9 (Interest Cover Ratio).
-28-
<PAGE> 29
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable
detail showing the bases for the list; and
17.3.2 such further information in the possession or control of
any member of the Group regarding its financial condition
or operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity of, this
Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest
in respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not
and whether voluntarily or involuntarily, sell, transfer, grant or
lease or otherwise dispose of assets (other than current assets) if
either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of
Consolidated Tangible Net Worth (as shown in the latest
audited accounts of the Group); or
-29-
<PAGE> 30
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30
per cent. of Consolidated Tangible Net Worth (as shown in
the latest audited accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than
3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not
a Borrower it will only be an Event of Default if the event is, in
the reasonable opinion of the Bank, reasonably likely to affect
materially and adversely the Company's ability to perform its
obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount
payable by it under this Agreement at the place at and in the
currency in which it is expressed to be payable and the default is
not remedied within seven Business Days after the Bank gives notice
to the Company and the relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case
of a breach capable of being remedied) fails to remedy the breach
within fourteen Business Days after the date on which the Company and
the relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
-30-
<PAGE> 31
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand
as a result of an event of default (howsoever described)
under the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings
exceeds Pound Sterling 10,000,000 (or its equivalent in other
currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due
or to be insolvent, or admits inability to pay its debts generally as
they fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all
or any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is
convened to consider a resolution to present an application
for an administration order or any such resolution is
passed; or
18.8.2 any step (including petition, proposal or convening a
meeting) is taken with a view to a composition, assignment
or arrangement with any creditors of, or the
rehabilitation, administration, custodianship, liquidation,
or dissolution of, any Borrower or Material Subsidiary or
any other insolvency proceedings involving any Borrower or
Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material
Subsidiary becomes subject to or enters into any of the
foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary
or any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
-31-
<PAGE> 32
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such
consent not to be unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in
respect of any Borrower or Material Subsidiary or any substantial
part of its assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint
such a receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds
Pound Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to
correspond with any of those mentioned in Clauses 18.6 to 18.11
(inclusive) in particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United
States Subsidiary commences a voluntary case under the
United States Federal Bankruptcy Laws, as now or hereafter
constituted, or any other applicable United States federal
or state bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such
Borrower or Material Subsidiary in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United
States federal or state bankruptcy, insolvency or other
similar law and such decree or order shall continue
unstayed and in effect for a period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry
on all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the
Bank may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
-32-
<PAGE> 33
18.14.2 demand that all the Advances, together with accrued
interest, and all other amounts accrued under this
Agreement, be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
18.14.3 demand that all the Advances be payable on demand,
whereupon they shall immediately become payable on demand
together with all other amounts accrued under this
Agreement.
19. FEES
COMMITMENT FEE
19.1 The Company shall pay to the Bank a commitment fee on the average
daily amount of the unutilised Commitment during each period in
respect of which such fee is to be determined at the rate of *%
per annum.
19.2 The commitment fee shall accrue on a daily basis in respect of each
six month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Availability Period End Date and shall be paid in arrear on the last
day of each such period. Accrued commitment fee is also payable to
the Bank on the cancelled amount of the Commitment at the time the
cancellation takes effect if the Commitment is cancelled in full.
VAT
19.3 Any fee referred to in this Clause is exclusive of any value added
tax or any other tax which might be chargeable in connection with
that fee. If any value added tax or other tax is so chargeable, it
shall be paid by the Company at the same time as it pays the relevant
fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any
other documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or
any proposal for any of the foregoing) requested by the
Company and relating to this Agreement or a document
referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
-33-
<PAGE> 34
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or
the preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an
Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in
connection with the entry into, performance or enforcement of this
Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or
as a result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is less than the amount owed in the contractual currency,
the relevant Borrower shall, forthwith on demand, pay to
the Bank an amount in the contractual currency equal to the
deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any
such conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange
is more
-34-
<PAGE> 35
than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount
in the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in
which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against
any liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being
received from any source otherwise than on its Maturity
Date in the case of a Revolving Advance, on the last day of
an Interest Period applicable to such Term Advance in the
case of a Term Advance and on the last day of each
applicable Designated Term (as defined in Clause 7.3
(Default interest)) in the case of an overdue amount; or
22.3.4 (other than by reason of negligence or default by the Bank)
a Utilisation not being effected after the relevant
Borrower has delivered a notice of Utilisation by telephone
or a Request (save where such notice or Request is
expressly permitted to be cancelled hereunder).
The Company's liability in each case includes, without limitation,
any loss of margin or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under
this Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on
the part of each Borrower contained in this Agreement and
agrees to pay to the Bank from time to time on demand any
and every sum or sums of money which each Borrower shall at
any time be liable to pay to the Bank under or pursuant to
this Agreement and which shall not have been paid at the
time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from
time to time on demand by the Bank from and against any
loss incurred by the Bank as a result of any of the
obligations of each Borrower under or pursuant to this
Agreement becoming void, voidable, unenforceable or
ineffective as against each such Borrower for any reason
whatsoever, whether or not known to the Bank, the amount of
-35-
<PAGE> 36
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of
all or any of the obligations of the Borrowers under this Agreement
and shall continue in full force and effect until final payment in
full of all amounts owing by the Borrowers thereunder and total
satisfaction of all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise
affected by:
22.7.1 the winding-up, dissolution, administration or
re-organisation of any Borrower or any other person or any
change in its status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of
any of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be
granted to any Borrower in respect of its obligations
hereunder or under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver
of or release of any obligation of any Borrower hereunder
or under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in
respect of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the
-36-
<PAGE> 37
rights, powers or remedies conferred upon the Bank by this
Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower
or any other person being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being
in force and, if any such security or payment is so avoided or
reduced, the Bank shall be entitled to recover the value or amount of
such security or payment from the Company subsequently as if such
settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against
any other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Bank
hereunder or of any other security taken pursuant to, or in
connection with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
-37-
<PAGE> 38
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which
it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee
payable pursuant to Clause 19.2 (Commitment Fee) accrue from day to
day and are calculated on the basis of the actual number of days
elapsed and a year of 365 days, or, in the case of interest payable
on an amount denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on
behalf of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or
any interest in, its rights and/or obligations under this Agreement
without the prior written consent of the Company (such consent not to
be unreasonably withheld) provided that such consent shall not be
required where the assignee or transferee is an Affiliate of the Bank
which is a Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer,
participation, sub-participation or other agreement in relation to
this Agreement it shall notify the Company in advance of its
intention and of the identity of the proposed transferee,
participant, sub-participant or other party to such agreement and the
amount of the proposed transfer, participation, sub participation, or
other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into,
any kind of transfer,
-38-
<PAGE> 39
participation, sub-participation or other agreement in relation to
this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but
only if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower
under this Agreement against any obligations (whether or not matured)
owed by the Bank to such Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Bank may convert either
obligation at the Bank's Spot Rate of Exchange for the purpose of the
set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that
jurisdiction of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
-39-
<PAGE> 40
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start
and at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on
a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in
that place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for
all notices under, or in connection with, this Agreement,
is:
(a) that notified by that Party for this purpose to
the other Party; or
(b) any other notified by that Party for this
purpose to the other by not less than five
Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
71 Queen Victoria Street
London EC4V 4DE
Attention: Stuart Clague
Telex: 929111
Facsimile No: 0171 329 6144
-40-
<PAGE> 41
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank
(such consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering
or procuring the delivery to the Bank a Borrower's Accession Notice
duly executed by the Company and the relevant Subsidiary provided
that if such Subsidiary is not resident in the United Kingdom for tax
purposes the Company and the Bank agree to make such amendments to
this Agreement as may be reasonably required at the time in order to
allow such Subsidiary to pay interest to the Bank without deduction
or withholding of any Relevant Tax and to provide such Subsidiary
with equivalent rights, mutatis mutandis, to those contained in
Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant
Subsidiary shall become an Acceding Borrower and shall, subject to
the terms and conditions of this Agreement acquire all the rights and
assume all the obligations of a Borrower hereunder provided that the
Bank has confirmed to the Company that it has received, in form and
substance satisfactory to it, all the documents set out in Part II of
Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of
such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency
of that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that
country shall be translated into, or paid in, the currency
unit of that country designated by the Bank acting
reasonably and in consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be
at the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of
it and the new currency and to put the Bank and the Borrowers in the
same position, so far as is possible, that they would have been in if
no change in currency had occurred.
-41-
<PAGE> 42
32.3 The Bank and the Company agree that the occurrence or non-occurrence
of EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new
currency in all or any part of the European Union will not result in
the discharge cancellation, rescission or termination in whole or in
pat of this Agreement or give any party hereto the right to cancel,
rescind, terminate or vary (other than as aforesaid) this Agreement
in whole or in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken
together shall be delivered to constitute one and the same
instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such
courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on
its behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in
Clause 34.2 shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Borrowers 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.
-42-
<PAGE> 43
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-43-
<PAGE> 44
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
ROYAL BANK OF CANADA EUROPE LIMITED
By: /s/Ralf Hohweiler
Ralf Hohweiler
-44-
<PAGE> 1
EXHIBIT (b)(13)
THIS AGREEMENT is dated 23rd March, 1999
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13
9UX, (Registered no 2262172) (the "COMPANY"); and
(2) WESTDEUTSCHE LANDESBANK GIROZENTRALE of 51 Moorgate London EC2R 6AE
(the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any
Subsidiary of the Company which has executed and delivered a Borrower's
Accession Notice;
"ADVANCE" means an advance made by the Bank hereunder or the principal
amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding
Company of that person and any other Subsidiary of that Holding
Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Final Maturity Date and (2) the
date on which the Commitment is terminated or cancelled in full or the
obligation of the Bank to make Advances ceases pursuant to any of the
provisions of this Agreement;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a document
or notice, a person who is authorised under the then current Board
Authority for Financial Transactions or such other mandate as may be
presented in its place to the Bank signed by any two Directors or one
Director and the Secretary of such Borrower, to give, execute or
despatch that document or notice;
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot rate
of exchange for the purchase of the relevant Optional Currency in the
London foreign exchange market with Sterling at or about 11.00 a.m. on
that day;
"BORROWERS" means the Company and any Acceding Borrowers save to the
extent that any of them has ceased to be a Borrower pursuant to Clause
31.4 and "Borrower" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the
Company and any Acceding Borrower to the Bank substantially in the form
set out in Schedule 5;
-1-
<PAGE> 2
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the
Company to the Bank substantially in the form set out in Schedule 6;
"BORROWING COSTS" means, in respect of any Relevant Period, all
interest and all other continuing, regular or periodic costs, charges
and expenses incurred by the Group in effecting, servicing or
maintaining Borrowings during such Relevant Period, less the amount of
interest receivable by any member of the Group during such Relevant
Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items
which would be shown as borrowings in the consolidated balance sheet of
the Group, and those which are guaranteed by members of the Group to
the extent that such borrowings are outstanding but excluding
guarantees, indemnities and similar assurances given by one member of
the Group in respect of the obligations of another member of the Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks and the relevant financial markets are open for business in
London and (in relation to a transaction involving an Optional
Currency) the principal financial centre of the country of that
Optional Currency provided that any reference to "Business Day" which
relates to a payment or rate fixing in euros or other matter relating
to euros means a day on which TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage
of EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have
substantially the same effect and consequences as the third stage of
EMU as contemplated by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 10,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or credited
as paid up on the issued share capital of the Company, plus the
aggregate amounts standing to the credit of the consolidated reserves
of the Group (including any share premium account or capital redemption
reserve fund and adding or deducting any balance standing to the credit
or debit of the consolidated profit and loss account of the Group and
including the consolidated portion of the reserves of associates) plus
any amount appearing in the consolidated balance sheet in respect of
deferred income relating to government grants, deferred taxation and
minority interests and less goodwill and other intangibles, all amounts
being construed in accordance with accounting principles generally
accepted in the United Kingdom and consistently applied;
"DEFAULT" means an Event of Default or an event which, with the giving
of notice, lapse of time, determination of materiality or fulfilment of
any other applicable condition (or any combination of the foregoing) in
each case as specified in Clause 18, would constitute an Event of
Default;
-2-
<PAGE> 3
"DOLLARS" or "US $" means the lawful currency for the time being of the
United States of America;
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union; and
"EMU LEGISLATION" means legislative measures of the European Council
for the introduction of, change over to, or operation of a single or
unified European currency (whether known as the euro or otherwise),
being in part the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1
(Events of Default);
"FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Facility);
"FINAL MATURITY DATE" means 364 days after the Signing Date;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum at
which deposits in the relevant currency of the Advance appears on the
Telerate page 3750 (or such other relevant Telerate page as may be
appropriate to such currency) as of 11.00 a.m. on the applicable Rate
Fixing Date for a period equal to its Term and for delivery on the
first Business Day thereof, save that if such rate does not appear on
the Telerate page 3750 (or such other relevant page) then the rate per
annum at which deposits in the relevant currency and for the amount of
the Advance are offered to the Bank by leading banks in the London
Interbank Market at or about 11.00 a.m. on the applicable Rate Fixing
Date for a period equal to its Term and for delivery on the first
Business Day thereof (provided that where pursuant to Clause 12.2.3 the
interest rate for an Advance is to be fixed after 11.00 a.m., for the
purposes of this definition of "LIBOR", no rate shall be treated as
appearing on Telerate page 3750 (or such other relevant page) and the
time of "1.00 p.m." shall be substituted for the time "11.00 a.m.");
"MANDATORY COST" means the cost imputed to the Bank in respect of each
Advance of compliance with the Mandatory Cost requirements of the Bank
of England and the banking supervision costs of the Financial Services
Authority during the Term of that Advance, expressed as a rate per
annum and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
-3-
<PAGE> 4
(ii) a Subsidiary of the Company (other than a United Kingdom
Subsidiary) which is a holding company of a group of companies
whose consolidated Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible Assets
of the Group as shown by a comparison of the latest audited balance
sheet of the Subsidiary (or, in the case of a Subsidiary within (ii),
its latest audited consolidated balance sheet) with the latest audited
consolidated balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance, the last day of its
Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such
Relevant Period (but before taking into account any exceptional or
extraordinary items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at the
relevant time is freely transferable and convertible into Sterling and
deposits of which are readily available and freely dealt in on the
London Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the
Group as at 31st December 1997;
in the form delivered to the Bank prior to the Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in Sterling,
its principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an
Optional Currency, its principal amount translated in to
Sterling on the basis of the Bank's Spot Rate of Exchange on the
Rate Fixing Day for that Advance;
"PARTICIPATING MEMBER STATE" means a state which adopts the single
currency in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the
Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any undertaking or
assets of a similar nature and of approximately equal or higher
value;
(ii) the sale of assets for cash and the application within a period
of 180 days, of a sum approximately equal to the net proceeds
relating thereto, in the acquisition of assets of a kind
generally used by the Group in its business operations;
(iii) the sale of assets for cash where a sum approximately equal to
the net proceeds relating thereto has been applied in the
acquisition of assets
-4-
<PAGE> 5
(made during the period of 180 days before the relevant sale) of
a kind generally used by the Group in its business operations;
(iv) disposals of obsolete or redundant plant and equipment not
required for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member of
the Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market value on
arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this Agreement
which has been disclosed in writing to the Bank prior to the
date hereof; or
(ii) any Security Interest which is created with the prior consent of
the Bank; or
(iii) any lien arising by operation of law in the ordinary course of
business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in the
ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title or
insurance policies and sale contracts in relation to such goods,
arising in the ordinary course of business in connection with
letters of credit and similar transactions where such Security
Interest secures only so much of the acquisition cost of such
goods which is required to be paid within 180 days after the
date upon which the sale was first incurred; or
(vi) any Security Interest over or affecting any property or asset
acquired by a member of the Group after the date hereof and
subject to which such property or asset is acquired, but only if
(a) such Security Interest was not created in contemplation of
the acquisition of such property or asset by a member of the
Group, (b) the amount thereby secured has not been increased in
contemplation of, or since the date of, the acquisition of such
property or asset by a member of the Group and (c) such Security
Interest is discharged to the satisfaction of the Bank within 12
months of the acquisition of the property or asset in question;
or
(vii) any Security Interest over or affecting any assets of any
company which becomes a member of the Group after the date
hereof, where such Security Interest is created prior to the
date on which such company becomes a member of the Group but
only if (a) such Security Interest was not created in
contemplation of such company
-5-
<PAGE> 6
becoming a member of the Group, (b) the amount thereby secured
(save any overdrawn amount on the current account of any such
company within the terms (in existence on the date when the
company becomes a member of the Group) of an overdraft (or other
equivalent) facility granted to such company prior to its
becoming a member of the Group) has not been increased in
contemplation of, or since the date of, such company becoming a
member of the Group and (c) (save for any Security Interest
created before the date of such company becoming a member of the
Group, over any freehold or leasehold property solely for the
purpose of securing borrowings incurred to acquire such
property) such Security Interest is discharged to the
satisfaction of the Bank within 12 months of such company
becoming a member of the Group; or
(viii) any Security Interest created after the date hereof over any
freehold or leasehold property of a member of the Group solely
for the purpose of securing borrowings incurred to acquire such
property; or
(ix) any Security Interests created or continuing in connection with
an issue of industrial revenue or development bonds or in
connection with some other similar financing to which the Bank
has previously consented; or
(x) any Security Interest created in substitution for any Security
Interest permitted pursuant to this definition provided that the
substituted Security Interest is over the same asset and the
principal amount secured does not exceed the principal amount
secured on such asset prior to the substitution; or
(xi) any Security Interest created by one member of the Group in
favour of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to any
member of the Group in the ordinary course of its business by
virtue of any retention of title provisions contained in the
relevant seller's conditions of sale; or
(xiii) Security Interests (other than those to which one of the
preceding paragraphs of this definition applies) securing, in
aggregate, an amount not exceeding at any time an amount equal
to 10% of the Consolidated Tangible Net Worth at such time or if
greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the Income
and Corporation Taxes Act 1988 (or any statutory re-enactment or
modification thereof) which is within the charge to United Kingdom
corporation tax as regards interest payable or paid to it under this
Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its
Utilisation Date; or
-6-
<PAGE> 7
(ii) in relation to an Advance denominated in an Optional Currency,
the second Business Day before its Utilisation Date;
"RELEVANT PERIOD" means any financial year of the Group, or, as the
case may be, the second half of one financial year of the Group and the
first half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise the Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge,
assignment, hypothecation or security interest or any other agreement
or arrangement having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" or "POUND STERLING" means the lawful currency for the time
being of the UK;
"SUBSIDIARY" means
(i) for the purposes of Clauses 16.8, 17.2, and 17.9 and the
references to "Group" in the definitions of "Borrowing Costs"
and "Operating Profit" means any company whose accounts are
consolidated with the accounts of the Company in accordance with
accounting principles generally accepted under accounting
standards of the UK; and
(ii) for any other purpose has the meaning given to it by Section 736
of the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate amount
of any current and fixed assets of that company as shown in its latest
audited balance sheet or, in the case of a company which is a holding
company of a group of companies, its latest audited consolidated
balance sheet but excluding any amount attributable to goodwill,
intellectual property or other intangible assets of whatever kind;
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which
the relevant Advance is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 1 February 1992 and came into force
on 1 November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland;
-7-
<PAGE> 8
"UTILISATION" means all Advances made or to be made hereunder following
the giving by a Borrower of a Request for these Advances; and
"UTILISATION DATE" means the date for the making of the Advance(s).
1.2 In this Agreement, unless the contrary intention appears, a reference
to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing, registration
and notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having the force of law and if
applicable to the Bank, being of a type with which the Bank is
accustomed to comply) of any governmental body, agency,
department or regulatory or self-regulatory or other
authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day
in the next calendar month except that, if there is no
numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in
that later month;
1.2.4 a "TAX" includes any tax, levy, assessment, impost,
withholding or other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736 of
the Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or
financial institution which becomes a party to this Agreement
under Clause 25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as
amended or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or a
schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless otherwise
stated;
1.2.11 "EURO" means the single currency of Participating Member
States to be introduced on the Commencement Date and "EURO
UNIT" means the currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other
than a euro unit) of a Participating Member State.
-8-
<PAGE> 9
1.3 Unless the contrary intention appears, a term used in any other
document or notice given under, or in connection with, this Agreement
has the same meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 4 containing an indicative timetable is included for ease of
reference and convenience but in the event of any conflict between the
substantive provisions of this Agreement and the contents thereof, the
substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period and
when requested by a Borrower, make to such Borrower Advances upon and
subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.2 The aggregate Original Sterling Amount of all outstanding Advances
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.3 Any number of Requests may be delivered on the same day and/or
specifying the same Utilisation Date, whether or not the currencies and
Terms requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the
general corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way,
the Bank shall not be bound to monitor or verify the application of the
proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the
Company that it has received, not later than 3 Business Days prior to
the first Utilisation Date, all of the documents set out in Part I of
Schedule 1 in form and substance satisfactory to the Bank.
-9-
<PAGE> 10
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date for
that Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on those
dates are correct and will be correct immediately after
the Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
4.2.2 the Utilisation would not cause Clause 2.2 (Overall facility
limit) to be contravened.
5. THE FACILITY
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided
that a notice given by telephone shall be confirmed in writing by the
delivery by the relevant Borrower to the Bank of a duly completed
Request to be actually received by the Bank not later than the close of
business in London on the day on which such telephone notice is, or is
deemed to have been, given.
COMPLETION OF REQUESTS
5.3 When giving a notice of Utilisation by telephone and when completing
the Request, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested Amount
is:
(a) if the currency is Sterling, a minimum of Pound
Sterling 1,000,000 and an integral multiple of Pound
Sterling 100,000; or
(b) if the currency is Dollars, a minimum of US $1,000,000
and an integral multiple of US $100,000; or
-10-
<PAGE> 11
(c) if the currency is an Optional Currency other than
Dollars, a minimum and integral multiple of the amounts
agreed between the relevant Borrower and the Bank before
the telephone notice of Utilisation or delivery of that
Request; or
(d) such other amounts as the Bank and the relevant Borrower
may agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Final Maturity Date; and
(b) is a period of an approved duration or of an optional
duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 6 months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it may
also select at the time of the telephone notice of Utilisation and in
the relevant Request a Term of any approved duration to apply if the
selection of a Term of an optional duration becomes ineffective in
accordance with Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional duration;
and
5.5.2 the Bank notifies such Borrower not later than 11.30 a.m. on
the date of receipt by it of the relevant Request or telephone
notice of Utilisation pursuant to Clause 5.1 or Clause 5.2
respectively that it does not agree to that request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant
Request or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the Advance
available to the relevant Borrower on the relevant Utilisation Date.
-11-
<PAGE> 12
6. CANCELLATION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business on
the Final Maturity Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days'
prior notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective; and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised
portion of the Commitment as at the date the notice is to be effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may
subsequently be reinstated.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on
each Advance is payable on its Maturity Date and also, in the case of
an Advance with a term longer than six months, on the date falling six
months after its Utilisation Date.
-12-
<PAGE> 13
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this
Agreement, it shall, on demand by the Bank from time to time, pay
interest on the overdue amount from the due date up to the date of
actual payment, after as well as before judgment, at a rate (the
"DEFAULT RATE") determined by the Bank to be one (1) per cent. per
annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest
rate) immediately before the due date (but only if the overdue
amount is an Advance (or part thereof) and only for the period
up to and including the Maturity Date of that Advance); and
7.3.2 the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted an Advance
in the currency of the overdue amount for such successive
Terms of such duration (not exceeding three months) as the
Bank may reasonably determine (each a "DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two
Business Days before the first day of, the relevant Designated Term, as
appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue
amount are not at the relevant time being made available by leading
banks in the London Interbank Market, the default rate will be
determined by reference to the cost of funds to the Bank from whatever
sources it may reasonably select.
7.6 Default interest shall be compounded at the end of each Designated Term
until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the
determination of any applicable rate of interest under this Agreement.
8. REPAYMENT AND PREPAYMENT
REPAYMENT OF ADVANCES
8.1 Each Borrower shall repay each Advance made to it in full on its
Maturity Date to the Bank. If an Advance (the "NEW ADVANCE") is to be
made to a Borrower on the day on which another Advance (the "MATURING
ADVANCE") in the same currency is due to be repaid by such Borrower
then, subject to the terms of this Agreement and so long as the
conditions referred to in Clause 4.2 shall have been satisfied in
relation to the New Advance:
8.1.1 the Maturing Advance shall be deemed to have been repaid on
its Maturity Date either in whole (if the New Advance is equal
to or greater than the Maturing Advance) or in part (if the
New Advance is less than the Maturing Advance); and
-13-
<PAGE> 14
8.1.2 to the extent that a Maturing Advance is so deemed to have
been repaid, the principal amount of the New Advance to be
made on such a date shall be deemed to have been credited to
the account of such Borrower by the Bank in accordance with
the terms of this Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to such
Borrower pursuant to Clause 5.6 a principal amount equal
to the amount (if any) by which the New Advance exceeds
the Maturing Advance; or
(b) such Borrower shall only be obliged to pay to the Bank
pursuant to this Clause 8.1 a principal amount equal to
the amount by which the Maturing Advance exceeds the New
Advance.
8.2 On the Final Maturity Date, all outstanding Advances and other sums (if
any) then owing under this Agreement shall in any event be repaid or
paid in full.
PREPAYMENT OF ADVANCES
8.3 Any Borrower may, without penalty and on giving not less than 15 days'
prior notice to the Bank, prepay all or any part of an Advance, but if
in part, in a minimum amount of Pound Sterling 1,000,000 and an
integral multiple of Pound Sterling 100,000 (or the comparable amount
in any Optional Currency).
8.4 Any notice by a Borrower of prepayment under this Agreement is
irrevocable.
8.5 Should any person or group of persons, acting either individually or in
concert (as defined in the City Code on Take Overs and Mergers
effective as at the date of this Agreement) otherwise than with the
consent of the Bank acquire control of the Company (and for the purpose
of this Clause a single person or group of persons shall have acquired
control if it or they own or hold more than 50% (fifty per cent.) of
the issued share capital of the Company having the right to attend and
vote at general meetings of the Company or more than 50% (fifty per
cent.) of such rights), then:
8.5.1 the Company shall immediately upon becoming aware thereof
notify the Bank specifying the date of such acquisition and
the name of such person or persons acquiring control; and
8.5.2 thereafter no Borrower shall be permitted to request an
Advance unless the terms of the acquisition of control of the
Company were approved by the Board of Directors of the Company
and the Maturity Date for any Advance requested falls on a
date not more than three months after the expiration of the 30
day period referred to in Clause 8.6.
8.6 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company, the Bank shall consult with
the Company during the period of 30 days after receipt of the
notification from the Company referred to in sub-Clause 8.5.1 and shall
be entitled to give notice of
-14-
<PAGE> 15
continuance of the Facility provided hereunder to the Company. Upon
receipt of such notice of continuance, the right of the Borrowers to
request an Advance without the limitation referred to in sub-Clause
8.5.2 shall be reinstated.
8.7 If the terms of the acquisition of control of the Company were approved
by the Board of Directors of the Company but, at the end of the period
of 30 days referred to in Clause 8.6 above, the Company has not
received a notice of continuance then:
8.7.1 the Facility shall be cancelled;
8.7.2 any outstanding Advances with Maturity Dates falling later
than three months after the end of such period shall be
prepaid on the date falling three months after the end of such
period, together with accrued interest thereon up to the date
of payment and all other amounts payable to the Bank
hereunder; and
8.7.3 any outstanding Advances with Maturity Dates falling not later
than three months after the end of such period shall be repaid
on their respective Maturity Dates.
8.8 If the terms of the acquisition of control of the Company were not
approved by the Board of Directors of the Company, then unless the Bank
shall have confirmed within 2 days of receipt of the notice referred to
in sub-Clause 8.5.1 that the Facility shall be continued, the Facility
shall be cancelled and any outstanding Advances shall be repayable on
demand by the Bank together with accrued interest thereon up to the
date of payment and all other amounts payable to the Bank hereunder.
8.9 Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid together with any amount payable to the
Bank pursuant to Clause 22.3.
8.10 No Advance may be prepaid otherwise than in accordance with the express
terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this Agreement
shall be made to such account at such office or bank in the principal
financial centre of the relevant currency as it may notify the other or
to such other place as may be agreed between the parties for this
purpose.
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's
payment or by CHAPS;
-15-
<PAGE> 16
9.2.2 if in Dollars on the due date in Dollars and in same day
funds;
9.2.3 if in an Optional Currency (other than Dollars) in the place
for payment on the due date in lawful money of the country of
that Optional Currency, in immediately available funds, or at
such times or in such funds as the Bank may specify to the
relevant Borrower as being customary at the time for the
settlement of transactions in the relevant currency in the
place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in
which the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any Advance
requested to be denominated in the currency of a Participating Member
State shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit of
a given Participating Member State and payable within that
Participating Member State by crediting an account of the creditor, can
be paid by the debtor either in the euro unit or in that national
currency unit, a Party shall be entitled to pay that amount either in
the euro unit or in the relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall
be made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a
Business Day, then the due date for the payment shall instead be the
next Business Day.
9.10 During any extension of the due date for payment of any principal under
this Agreement pursuant to Clause 9.9 above interest is payable on the
principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the
amounts then due and payable by any Borrower under this Agreement, the
Bank shall apply that payment towards the obligations of such Borrower
under this Agreement in the following order:
-16-
<PAGE> 17
9.11.1 firstly, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but
unpaid under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due but
unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but
unpaid under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but unpaid
under this Agreement.
9.12 The Bank may vary the order set out in Clauses 9.11.1 to 9.11.5 above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by
any Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional Currency
unless the Bank has confirmed to such Borrower that the Optional
Currency is readily available and freely transferable in the London
foreign exchange market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an
Optional Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the
Bank to fund the Advance for its Term in that Optional
Currency in the ordinary course of business in the London
Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene any
law or regulation,
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m. on
that Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by
11.30 a.m. on that Rate Fixing Day to that effect, the Advance
will not be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause
10.2.4 above, the Advance will be denominated instead in
Sterling in an amount equal to its Original Sterling Amount.
-17-
<PAGE> 18
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of
any applicable Bank's Spot Rate of Exchange or Original Sterling Amount
promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is
reborrowed in the same Optional Currency immediately following its
repayment, then the Original Sterling Amount of such new Advance
denominated in such Optional Currency shall be recalculated for the new
Term in accordance with the terms and conditions of this Agreement and
if on the relevant Utilisation Date the aggregate Original Sterling
Amount of all Advances outstanding on such date exceeds the Commitment,
then any excess shall be repaid to the Bank by the relevant Borrower
upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be
made without any deductions and free and clear of and without deduction
for or on account of any Relevant Taxes except to the extent that any
Borrower is required by law to make payment subject to any such taxes.
If any Relevant Tax or amounts in respect of any Relevant Tax must be
deducted from any amounts payable or paid by any Borrower hereunder,
such Borrower shall pay such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount
which it would have received had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made
hereunder means any present or future taxes of any nature now or
hereafter imposed by the laws of (i) the United Kingdom, (ii) any other
jurisdiction from which, or through which, such payment is made or to
the taxation laws of which the relevant Borrower is at the time of such
payment subject, (iii) any political sub-division of the United Kingdom
or any such other jurisdiction or (iv) any federation or association of
states of which the United Kingdom or any such other jurisdiction is,
at the time of such payment, a member.
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall be
paid by such Borrower when due (unless the obligation to pay is being
disputed in good faith) and such Borrower shall, within 30 days of the
payment being made, deliver to the Bank evidence satisfactory to the
Bank (including all relevant tax receipts) that the payment has been
duly remitted to the appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under
Clause 11.1 and the Bank effectively obtains a refund of tax, or a
relief or credit against
-18-
<PAGE> 19
tax by reason of that Tax Payment (a "TAX CREDIT"), and the Bank is
able to identify the Tax Credit as being attributable to the Tax
Payment, then the Bank shall reimburse to the relevant Borrower such
amount as the Bank reasonably determines to be the proportion of the
Tax Credit as will leave the Bank (after that reimbursement) in no
better or worse position that it would have been if the Tax Payment had
not been required. Nothing in this Clause interferes with the right of
the Bank to arrange its tax affairs in whatever manner it thinks fit
and, without prejudice to the foregoing, the Bank is under no
obligation to claim a Tax Credit, or to claim a Tax Credit in priority
to any other claim, relief, credit or deduction available to it. The
Bank is not obliged to disclose any information regarding its tax
affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or
change in the interpretation, administration or application of, any law
or regulation or any practice or concession of the Inland Revenue after
the Signing Date, the Bank ceases to be a Qualifying Bank no Borrower
shall be liable to pay to the Bank under Clause 11.1 (Gross-up) any
amount in respect of taxes levied or imposed by the UK or any taxing
authority thereof or therein in excess of the amount it would have been
obliged to pay if the Bank had been or had not ceased to be a
Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION
12.1 If, in relation to any proposed Utilisation:
12.1.1 the Bank is unable to obtain from leading banks a rate for the
purposes of determining the applicable LIBOR or the Bank
otherwise determines that adequate and fair means do not exist
for ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
(a) matching deposits may not be available to it in the
London Interbank Market in the ordinary course of
business to fund an Advance; or
(b) the cost to it of matching deposits in the London
Interbank Market would be in excess of the relevant
LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon as
is practicable thereafter on the Rate Fixing Day of the fact
and that this Clause is in operation.
12.2 After any notification under Clause 12.1 above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance shall
be made in Sterling in an amount equal to its Original
Sterling Amount (unless Sterling was the original currency of
the relevant Advance);
-19-
<PAGE> 20
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected Advance
may be delivered until the Bank notifies the Company that the
event specified in the notification no longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00 a.m.
(or, if later, within 30 minutes of receipt by the Company of
a notification under sub-Clause 12.1.2) on the Rate Fixing
Day: (i) elect for the notice of Utilisation by telephone or
the Request to be cancelled without penalty; (ii) if the
Advance was to be made in an Optional Currency, elect for the
Advance to be made in an Optional Currency other than a
currency affected by the event specified in the notification
or (iii) elect for the Advance to be made in accordance with
the Request notwithstanding the event specified in the
notification. If any Borrower requires an affected Advance to
be made in the original currency selected for such Advance
notwithstanding the event specified in the notification then
within five Business Days of receipt of the notification, the
Company and the Bank shall enter into negotiations for a
period of not more than 25 days with a view to agreeing a
substitute basis for determining the rate of interest and/or
funding applicable to the affected Advance and any future
Advances in the currency of the affected Advance provided that
if no substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such certificate
to be conclusive) the alternative interest rate
calculated in accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the
then current Term; and
(c) the certificate shall be binding on each relevant
Borrower unless the Company gives notice to the Bank
within five Business Days of the receipt of the
certificate that the certificate is not acceptable and
that each relevant Borrower shall prepay in full the
relevant Advances on a Business Day specified in the
notice, which shall be not less than five nor more than
thirty days after the date of the Bank's certificate to
the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the
Bank as the rate per annum determined by the Bank to be the
aggregate of:
(a) the Margin;
(b) the rate notified by the Bank, on or before the last day
of its Term, as being the cost to the Bank of funding the
Advance from such other sources as it may reasonably
select; and
-20-
<PAGE> 21
(c) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation to
a particular currency, the Bank shall periodically determine whether
the circumstances referred to in Clause 12.1 above still apply and, if
they do not, shall forthwith give notice in writing to the Company of
the date on which the substitute basis will cease to apply.
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or regulation
after the Signing Date, or of any change in the application or
interpretation of any such changed law or regulation or compliance by
the Bank with any such changed law or regulation after the Signing Date
(including, without limitation, any law or regulation relating to
taxation, any reserve, special deposit, cash ratio, liquidity or
capital adequacy requirement or any form of banking or monetary control
but excluding (i) changes arising from the implementation by any
authority having jurisdiction over the Bank or its holding company of
the matters set out in the statement prepared by the Basle Committee on
Banking Regulations and Supervisory Practices dated July 1988 and
entitled "International Convergence of Capital Measurement and Capital
Standards" (as amended in November 1991) and (ii) changes arising from
the implementation in whole or in part by any authority having
jurisdiction over the Bank or its holding company of the proposals
contained in the matters set out in the EC Directive 93/6/EEC of 15
March 1993 on the capital adequacy of investment firms and credit
institutions) is that the Bank incurs an increased cost, then the Bank
will promptly notify the Company of the relevant event and the Company
shall on demand pay to the Bank such amount as the Bank certifies in
the demand will compensate it for the applicable increased cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it
having entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in
making, funding or maintaining all or any advances comprised
in a class of advances formed by or including the Advances
made or to be made by it under this Agreement as is
attributable to it making, funding, or maintaining such
advances; or
13.2.3 a reduction in any amount payable to the Bank or the effective
return to the Bank under this Agreement or on its capital; or
13.2.4 any payment made or interest or other return on or calculated
by reference to any amount received or receivable by the Bank
under this Agreement which is forgone.
-21-
<PAGE> 22
13.3 When calculating an increased cost, the Bank may allocate or spread
costs, liabilities and losses to or across its liabilities or assets,
or any class of liabilities or assets, and on such basis, as it
reasonably considers appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall
net income of the Bank (or the overall net income of a
division or branch of the Bank) imposed in the jurisdiction in
which its principal office or the relevant lending office for
the time being is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time
of an assignment, transfer or novation under Clause 25
(Changes to the Parties), but only to the extent that the
increased cost would not have been payable to the assigning,
transferring or novating Bank; or
13.4.5 which is attributable to the introduction of the euro other
than an increased cost which is being incurred generally by
banks transacting euro business in the London interbank
market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain
any Advance, then the Bank shall notify the Company accordingly and on
the Maturity Date of each relevant Advance (or such earlier date as the
relevant law or directive may require) the relevant Borrower shall
repay or prepay, as the case may be, any Advances made to it by the
Bank together with all other amounts payable by it to the Bank under
this Agreement.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank
under Clause 11 (Taxes) or compensation under Clause 13 (Increased
Costs), the Company may, whilst the circumstances giving rise to the
requirement continue, serve a notice of prepayment and cancellation in
relation to all or all affected Advances on the Bank.
15.2 On the tenth Business Day after the date of service of the notice the
relevant Borrower shall prepay the relevant Advance or Advances made to
it by the
-22-
<PAGE> 23
Bank together with all other amounts in relation to such Advance(s)
payable by it to the Bank under this Agreement.
15.3 To the extent of the Advances referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment
shall be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would,
with the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11
(Taxes); or
15.4.2 any increased cost becoming payable under Clause 13 (Increased
Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality),
then the Bank shall endeavour to take such steps as are reasonably open
to it to mitigate or remove those circumstances (including seeking
recovery for the account of the relevant Borrower where reasonably
practicable and/or transferring its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this Agreement
(including, without limitation, under the Clauses referred to
in Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion,
might be in any way prejudicial to it or conflict with its
banking policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
-23-
<PAGE> 24
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions
contemplated by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any judicial
order; or
16.5.2 conflict with its Memorandum and Articles of Association or
other constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of
its assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any
Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into,
performance and validity of, and the transactions contemplated by, this
Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated
financial position of the Group at the date to which they were
drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to
the Bank:
(a) have been prepared in accordance with accounting
principles and practices generally accepted in the UK
consistently applied or if not consistently applied
together with details of the changes in such application;
and
(b) fairly represent, when read in conjunction with the
relevant notes and auditors' report, the consolidated
financial condition of the companies comprising the Group
as at the date to which they were drawn up, and the
results of its consolidated operations for the year ended
on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts
were drawn up which would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement.
-24-
<PAGE> 25
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened against any member of the
Group, which would have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive
the execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by
the Company on the Signing Date and the representations and warranties
set out in Clauses 16.2 to 16.10 shall be deemed to be repeated by the
Company and the relevant Borrower on the date of each Request made by
such Borrower and the date of each Utilisation made to such Borrower
with reference to the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date
for so long as any amount is or may be outstanding under this Agreement
or the Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within 180
days of the end of each of its financial years) the audited
consolidated accounts of the Group for that financial year;
17.2.2 as soon as the same are available (and in any event within 150
days of the end of the first half-year of each of its
financial years) the interim statement of the Company for that
half-year; and
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
17.3 The Company shall supply to the Bank, promptly at the request of the
Bank:
17.3.1 a certificate signed by two of its senior officers on its
behalf setting out a list of the then current Material
Subsidiaries, together with computations in reasonable detail
showing the bases for the list; and
-25-
<PAGE> 26
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement
do and will rank at least pari passu with all its other present and
future unsecured obligations, except for claims in respect of
obligations which are mandatorily preferred by law applying to
companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted
Security Interests.
DISPOSALS
17.8 Except for Permitted Disposals the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction
have a net book value exceeding 10 per cent. of Consolidated
Tangible Net Worth (as shown in the latest audited accounts of
the Group); or
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per
cent. of Consolidated Tangible Net Worth (as shown in the
latest audited accounts of the Group),
-26-
<PAGE> 27
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value
of that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to
Borrowing Costs is not, at the end of each Relevant Period, less than 3
to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever
outside the control of the relevant Borrower or any other person),
except that if any of the events specified in Clauses 18.6 to 18.13
(inclusive) occurs in relation to a Material Subsidiary which is not a
Borrower it will only be an Event of Default if the event is, in the
reasonable opinion of the Bank, reasonably likely to affect materially
and adversely the Company's ability to perform its obligations under
this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable
by it under this Agreement at the place at and in the currency in which
it is expressed to be payable and the default is not remedied within
seven Business Days after the Bank gives notice to the Company and the
relevant Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its
part contained in this Agreement (other than those which, in the
reasonable opinion of the Bank, are not material), and (in the case of
a breach capable of being remedied) fails to remedy the breach within
fourteen Business Days after the date on which the Company and the
relevant Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary
-27-
<PAGE> 28
18.5.1 are not paid when due (after the expiry of any applicable
grace period); or
18.5.2 become prematurely due and payable or are placed on demand as
a result of an event of default (howsoever described) under
the document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes
of any law to be, unable to pay its debts generally as they fall due or
to be insolvent, or admits inability to pay its debts generally as they
fall due; or
18.7 Any Borrower or Material Subsidiary suspends making payments on all or
any class of its debts or announces an intention to do so, or a
moratorium is declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened
to consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a meeting)
is taken with a view to a composition, assignment or
arrangement with any creditors of, or the rehabilitation,
administration, custodianship, liquidation, or dissolution of,
any Borrower or Material Subsidiary or any other insolvency
proceedings involving any Borrower or Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such
composition, assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution or
insolvency proceedings, or any Borrower or Material Subsidiary
becomes subject to or enters into any of the foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary or
any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent not to
be unreasonably withheld).
-28-
<PAGE> 29
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect
of any Borrower or Material Subsidiary or any substantial part of its
assets; or
18.10 Any Borrower or Material Subsidiary requests any person to appoint such
a receiver or manager.
CREDITORS' process
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary
(and the aggregate total amount of all claims exceeds Pound
Sterling 1,000,000) and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of those mentioned in Clauses 18.6 to 18.11 (inclusive) in
particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or
any other applicable United States federal or state
bankruptcy, insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower
or Material Subsidiary in an involuntary case under the United
States federal bankruptcy laws, as now or hereafter
constituted, or any other applicable United States federal or
state bankruptcy, insolvency or other similar law and such
decree or order shall continue unstayed and in effect for a
period of 60 consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a
voluntary liquidation, amalgamation or reconstruction consented to by
the Bank under Clause 18.8) ceases, or threatens to cease, to carry on
all, or substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
18.14.1 cancel the Commitment; and/or
18.14.2 demand that all the Advances, together with accrued interest,
and all other amounts accrued under this Agreement, be
immediately due and payable, whereupon they shall become
immediately due and payable; and/or
-29-
<PAGE> 30
18.14.3 demand that all the Advances be payable on demand, whereupon
they shall immediately become payable on demand together with
all other amounts accrued under this Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound Sterling
*. The arrangement fee is payable within 30 days of the Signing
Date or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% per annum
on the average daily amount of the unutilised Commitment during each
period in respect of which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each
three month period with the first such period commencing on the Signing
Date and the last such period (adjusted as appropriate) ending on the
Final Maturity Date and shall be paid in arrear on the last day of each
such period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax
or any other tax which might be chargeable in connection with that fee.
If any value added tax or other tax is so chargeable, it shall be paid
by the Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by the Company
and relating to this Agreement or a document referred to
herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
-30-
<PAGE> 31
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of
all reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or
event which it is reasonable to consider may become an Event
of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
21.1 The Company shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of, any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an
independent obligation against any loss arising out of or as a
result of such conversion;
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
less than the amount owed in the contractual currency, the
relevant Borrower shall, forthwith on demand, pay to the Bank
an amount in the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any
exchange costs and taxes payable in connection with any such
conversion; and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is
more
-31-
<PAGE> 32
than the amount owed in the contractual currency the Bank
shall promptly account to the relevant Borrower an amount in
the contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that in which
it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received
from any source otherwise than on its Maturity Date and, for
the purposes of this sub-Clause 22.3.3, the Maturity Date of
an overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower has
delivered a notice of Utilisation by telephone or a Request
(save where such notice or Request is expressly permitted to
be cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees
to pay to the Bank from time to time on demand any and every
sum or sums of money which each Borrower shall at any time be
liable to pay to the Bank under or pursuant to this Agreement
and which shall not have been paid at the time such demand is
made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from time
to time on demand by the Bank from and against any loss
incurred by the Bank as a result of any of the obligations of
each Borrower under or pursuant to this Agreement becoming
void, voidable, unenforceable or ineffective as against each
such Borrower for any reason whatsoever, whether or not known
to the Bank, the amount of
-32-
<PAGE> 33
such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover
from any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the
obligations of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all
or any of the obligations of the Borrowers under this Agreement and
shall continue in full force and effect until final payment in full of
all amounts owing by the Borrowers thereunder and total satisfaction of
all actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred
in respect of the Company in relation thereto upon the Bank by this
Agreement or by law shall be discharged, impaired or otherwise affected
by:
22.7.1 the winding-up, dissolution, administration or re-organisation
of any Borrower or any other person or any change in its
status, function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any
of its obligations hereunder being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be granted
to any Borrower in respect of its obligations hereunder or
under any other security;
22.7.4 any amendment, supplement or modification to, or any waiver of
or release of any obligation of any Borrower hereunder or
under any such other security;
22.7.5 any failure to take, or fully to take, any security
contemplated hereby or otherwise agreed to be taken in respect
of any Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or
any release, discharge, exchange or substitution of, any
security taken in respect of any Borrower's obligations
hereunder; or
22.7.7 any other act, event or omission including, (without
limitation, any amendment to this Agreement) which, but for
this Clause 22.7 might operate to discharge, impair or
otherwise affect any of the obligations of the Borrowers or
the Company herein contained or any of the
-33-
<PAGE> 34
rights, powers or remedies conferred upon the Bank by this
Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or
any other person being avoided or reduced by virtue of any provisions
or enactments relating to bankruptcy, insolvency, liquidation or
similar laws of general application for the time being in force and, if
any such security or payment is so avoided or reduced, the Bank shall
be entitled to recover the value or amount of such security or payment
from the Company subsequently as if such settlement or discharge had
not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights,
powers or remedies conferred upon them in respect of the Borrowers or
the Company by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against any
other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or
dissolution of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in
respect of any of the obligations of any other Borrower
hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by
any Borrower hereunder or any Borrower is under any actual or
contingent obligations hereunder, it shall not exercise any rights
which it may at any time have by reason of performance by it of its
obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank hereunder
or of any other security taken pursuant to, or in connection
with, this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or
dissolution of any other Borrower in connection with any
rights arising by reason of or in connection with the
performance by it of its obligations hereunder.
-34-
<PAGE> 35
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
23.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount
under this Agreement is prima facie evidence of the matters to which it
relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee payable
pursuant to Clause 19.2 (Commitment Fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year
of 365 days, or, in the case of interest payable on an amount
denominated in an Optional Currency, 360 days.
24. AMENDMENTS
24.1 No amendment to this Agreement or any provision hereof shall be
effective unless made in writing and executed by the Company on behalf
of itself and each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations
under this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement without
the prior written consent of the Company (such consent not to be
unreasonably withheld) provided that such consent shall not be required
where the assignee or transferee is an Affiliate of the Bank which is a
Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer, participation,
sub-participation or other agreement in relation to this Agreement it
shall notify the Company in advance of its intention and of the
identity of the proposed transferee, participant, sub-participant or
other party to such agreement and the amount of the proposed transfer,
participation, sub participation, or other arrangement.
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's
prior written consent (such consent not to be unreasonably withheld)
any person with whom it is proposing to enter, or has entered into, any
kind of transfer,
-35-
<PAGE> 36
participation, sub-participation or other agreement in relation to this
Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly
acquired under or in connection with this Agreement but only
if that person undertakes to keep that information
confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the
general law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of
that right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the
Bank's Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other
jurisdictions of that or any other provision of this
Agreement.
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein all notices under, or in connection
with, this Agreement shall be given in writing or by telex or
facsimile. Any such notice is deemed to be given as follows:
-36-
<PAGE> 37
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request
which shall only be effective when actually received by the
Bank and where a Request is by facsimile the Bank will give
telephone confirmation of such receipt as specified in the
Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that
place.
30.2 ADDRESSES FOR NOTICES
30.2.1 The address, telex and facsimile number of each Party for all
notices under, or in connection with, this Agreement, is:
(a) that notified by that Party for this purpose to the other
Party; or
(b) any other notified by that Party for this purpose to the
other by not less than five Business Days' notice.
30.2.2 The address, telex and facsimile number:
(a) of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
(b) of the Bank is:
Administrative Matters
51 Moorgate
London EC2R 6AE
Attention: Paul Lowder
Telex: 887964/5
Facsimile No: (0171) 374 8546
-37-
<PAGE> 38
Credit Matters
51 Moorgate
London EC2R 6AE
Attention: Neil Harris
Facsimile No: (0171) 457 2108
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other
Subsidiary of the Company becomes an Acceding Borrower by delivering or
procuring the delivery to the Bank a Borrower's Accession Notice duly
executed by the Company and the relevant Subsidiary provided that if
such Subsidiary is not resident in the United Kingdom for tax purposes
the Company and the Bank agree to make such amendments to this
Agreement as may be reasonably required at the time in order to allow
such Subsidiary to pay interest to the Bank without deduction or
withholding of any Relevant Tax and to provide such Subsidiary with
equivalent rights, mutatis mutandis, to those contained in Clause 11.4
(Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has
confirmed to the Company that it has received, in form and substance
satisfactory to it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding
Borrower shall provide the Bank with each of the documents listed in
Part II of Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligation under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower
shall forthwith cease to be a Borrower upon receipt by the Bank of such
notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
32.1.1 any reference in this Agreement to, and any obligations
arising under this Agreement in, the currency of that country
shall be translated into, or paid in, the currency unit of
that country designated by the Bank acting reasonably and in
consultation with the Company; and
32.1.2 any translation from one currency unit to another shall be at
the official rate of exchange recognised by the relevant
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Bank acting
reasonably.
-38-
<PAGE> 39
32.2 If a change in any currency of a country occurs, the Bank and the
Company will negotiate in good faith in order to agree any amendments
to this Agreement to reflect market practice at that time with regard
to the occurrence of EMU within the European Union or any part(s) of it
and the new currency and to put the Bank and the Borrowers in the same
position, so far as is possible, that they would have been in if no
change in currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or
events associated with EMU and/or the introduction of any new currency
in all or any part of the European Union will not result in the
discharge cancellation, rescission or termination in whole or in pat of
this Agreement or give any party hereto the right to cancel, rescind,
terminate or vary (other than as aforesaid) this Agreement in whole or
in part or give rise to an Event of Default.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be an original and all of such counterparts taken together
shall be delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is
begun in England and Wales may be served on it by being delivered to
the Company at its registered office for the time being and hereby
appoints the Company (and the Company accepts such appointment) for
such purposes. If the appointment of the person mentioned in this
Clause 34.3 ceases to be effective in respect of any or all of the
Borrowers such Borrower or Borrowers shall immediately appoint a
further person in England and Wales to accept service of process on its
behalf in England and Wales and, failing such appointment within
fifteen days, the Bank acting reasonably shall be entitled to appoint
such a person by notice to such Borrower or Borrowers. Nothing
contained herein shall affect the right to serve process in any other
manner permitted by law.
34.4 Each of the Borrowers irrevocably waives any objection which it might
now or hereafter have to the courts referred to in Clause 34.2 being
nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and agrees not to claim that any such
court is not a convenient or appropriate forum.
-39-
<PAGE> 40
34.5 The submission to the jurisdiction of the courts referred to in Clause
34.2 shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
-40-
<PAGE> 41
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
WESTDEUTSCHE LANDESBANK GIROZENTRALE
By: /s/Michaela Zinser
Michaela Zinser
Senior Analyst
-41-
<PAGE> 1
EXHIBIT (b)(14)
THIS AGREEMENT is dated 22nd December, 1998
BETWEEN:
(1) CARADON PLC of Caradon House, 24 Queens Road, Weybridge, Surrey KT13 9UX,
(Registered no 2262172) (the "THE COMPANY"); and
(2) DEN DANSKE BANK LONDON BRANCH of 75 King William Street, London EC4N 7DT
(the "BANK")
IT IS AGREED as follows:
1. INTERPRETATION
DEFINITIONS
1.1 In this Agreement:
"ACCEDING BORROWER" means (subject as provided in Clause 31) any Subsidiary
of the Company which has executed and delivered a Borrower's Accession
Notice;
"ACCEPTANCE CREDIT FACILITY" means the uncommitted acceptance credit
facility referred to in Clause 2.2 (Acceptance Credit Facility);
"ACCEPTANCE COMMISSION RATE" means *% per annum;
"ADVANCE" means an advance made by the Bank under the Loan Facility or the
principal amount outstanding of that advance;
"AFFILIATE" means, in relation to a person, a Subsidiary or Holding Company
of that person and any other Subsidiary of that Holding Company;
"AVAILABILITY PERIOD" means the period from the Signing Date until
whichever is the earlier of (1) the Availability Period End Date and (2)
the date on which the Commitment is terminated or cancelled in full or the
obligation of the Bank to make Advances or to accept Bills ceases pursuant
to any of the provisions of this Agreement;
"AVAILABILITY PERIOD END DATE" means 364 days after the Signing Date as
extended by clause 6.6;
"AUTHORISED SIGNATORY" means, in relation to a Borrower and a document or
notice, a person who is authorised under the then current Board Authority
for Financial Transactions or such other mandate as may be presented in its
place to the Bank signed by any two Directors or one Director and the
Secretary of such Borrower, to give, execute or despatch that document or
notice;
-1-
<PAGE> 2
"BANK'S SPOT RATE OF EXCHANGE" means, on any day, the Bank's spot rate of
exchange for the purchase of the relevant Optional Currency in the London
foreign exchange market with Sterling at or about 11.00 a.m. on that day;
"BILL" means a Sterling bill of exchange substantially in the form of
Schedule 4;
"BORROWERS" means the Company and any Acceding Borrowers save to the extent
that any of them has ceased to be a Borrower pursuant to Clause 31.4 and
"BORROWER" means any one of them;
"BORROWER'S ACCESSION NOTICE" means a notice to be delivered by the Company
and any Acceding Borrower to the Bank substantially in the form set out in
Schedule 6;
"BORROWER'S CESSATION NOTICE" means a notice to be delivered by the Company
to the Bank substantially in the form set out in Schedule 7;
"BORROWING COSTS" means, in respect of any Relevant Period, all interest
and all other continuing, regular or periodic costs, charges and expenses
incurred by the Group in effecting, servicing or maintaining Borrowings
during such Relevant Period, less the amount of interest receivable by any
member of the Group during such Relevant Period;
"BORROWINGS" means all liabilities in respect of moneys borrowed,
acceptance credits, debentures and loan stocks and all other items which
would be shown as borrowings in the consolidated balance sheet of the
Group, and those which are guaranteed by members of the Group to the extent
that such borrowings are outstanding but excluding guarantees, indemnities
and similar assurances given by one member of the Group in respect of the
obligations of another member of the Group;
"BUSINESS DAY" means a day (other than a Saturday or a Sunday) on which
banks and the relevant financial markets are open for business in London
and (in relation to a transaction involving an Optional Currency) the
principal financial centre of the country of that Optional Currency
provided that any reference to "Business Day" which relates to a payment or
rate fixing in euros or other matter relating to euros means a day on which
TARGET is operating;
"COMMENCEMENT DATE" means the date of commencement of the third stage of
EMU as contemplated by the Treaty on European Union or on which
circumstances arise which the Bank and the Company agree have substantially
the same effect and consequences as the third stage of EMU as contemplated
by the Treaty on European Union;
"COMMITMENT" means, the sum of Pound Sterling 25,000,000 as reduced in
accordance with the provisions of this Agreement;
"CONSOLIDATED TANGIBLE NET WORTH" means the amount paid up or credited as
paid up on the issued share capital of the Company, plus the aggregate
amounts standing to the credit of the consolidated reserves of the Group
(including any share premium account or capital redemption reserve fund and
adding or deducting any balance standing to the credit or debit of the
consolidated profit and loss account of the Group and including the
-2-
<PAGE> 3
consolidated portion of the reserves of associates) plus any amount
appearing in the consolidated balance sheet in respect of deferred income
relating to government grants, deferred taxation and minority interests and
less goodwill and other intangibles, all amounts being construed in
accordance with accounting principles generally accepted in the United
Kingdom and consistently applied;
"DEFAULT" means an Event of Default or an event which, with the giving of
notice, lapse of time, determination of materiality or fulfilment of any
other applicable condition (or any combination of the foregoing) in each
case as specified in Clause 18, would constitute an Event of Default;
"DOLLARS" or "US $" means the lawful currency for the time being of the
United States of America;
"EBDR" means, in relation to a Bill, the rate (as determined by the Bank at
or about 10.30 a.m. on its Utilisation Date) at which Eligible Bills of an
equivalent tenor can be discounted in the London discount market at or
about that time;
"ELIGIBLE BILL" means a Sterling bill of exchange eligible for
re-discounting at the Bank of England;
"EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Union; and
"EMU LEGISLATION" means legislative measures of the European Council for
the introduction of, change over to, or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part
the implementation of the third stage of EMU;
"EVENT OF DEFAULT" means an event specified as such in Clause 18.1 (Events
of Default);
"FACILITY" means the Acceptance Credit Facility or the Loan Facility;
"GROUP" means the Company and its Subsidiaries for the time being;
"HOLDING COMPANY" has the meaning given to it in Section 736 of the
Companies Act 1985;
"LIBOR" means in respect of a particular period, the rate per annum at
which deposits in the relevant currency of the Advance appears on the
Telerate page 3750 (or such other relevant Telerate page as may be
appropriate to such currency) as of 11.00 a.m. on the applicable Rate
Fixing Date for a period equal to its Term and for delivery on the first
Business Day thereof (save that if such rate does not appear on the
Telerate page 3750 (or such other relevant page) then the rate per annum at
which deposits in the relevant currency and for the amount of the Advance
are offered to the Bank by leading banks in the London Interbank Market at
or about 11.00 a.m. on the applicable Rate Fixing Date for a period equal
to its Term and for delivery on the first Business Day thereof (provided
that where pursuant to Clause 12.2.3 the interest rate for an Advance is to
be fixed after
-3-
<PAGE> 4
11.00 a.m., for the purposes of this definition of "LIBOR", no rate shall
be treated as appearing on Telerate page 3750 (or such other relevant page)
and the time of "1.00 p.m." shall be substituted for the time "11.00
a.m.");
"LOAN FACILITY" means the revolving multi-currency advances facility
referred to in Clause 2.1 (Loan Facility);
"MANDATORY COST" means the cost imputed to the Bank in respect of each
Advance of compliance with the Mandatory Cost requirements of the Bank of
England and the banking supervision costs of the Financial Services
Authority during the Term of that Advance, expressed as a rate per annum
and determined in accordance with Schedule 2;
"MARGIN" means *% per annum;
"MATERIAL SUBSIDIARY" means:
(i) a Subsidiary of the Company whose Tangible Assets; or
(ii) a Subsidiary of the Company (other than a United Kingdom Subsidiary)
which is a holding company of a group of companies whose consolidated
Tangible Assets
exceeds in value ten (10) per cent. of the consolidated Tangible Assets of
the Group as shown by a comparison of the latest audited balance sheet of
the Subsidiary (or, in the case of a Subsidiary within (ii), its latest
audited consolidated balance sheet) with the latest audited consolidated
balance sheet of the Group;
"MATURITY DATE" means, in relation to an Advance or a Bill, the last day of
its Term;
"OPERATING PROFIT" means, in respect of any Relevant Period, the
consolidated pre-taxation profits (after adding back amortisation of
goodwill and Borrowing Costs during such Relevant Period) for such Relevant
Period (but before taking into account any exceptional or extraordinary
items);
"OPTIONAL CURRENCY" means a currency (other than Sterling) which at the
relevant time is freely transferable and convertible into Sterling and
deposits of which are readily available and freely dealt in on the London
Interbank Market;
"ORIGINAL ACCOUNTS" means the audited consolidated accounts of the Group as
at 31st December 1997, in the form delivered to the Bank prior to the
Signing Date;
"ORIGINAL STERLING AMOUNT" means:
(i) in relation to a Utilisation or Advance denominated in Sterling, its
principal amount; or
(ii) in relation to a Utilisation or Advance denominated in an Optional
Currency, its principal amount translated in to Sterling on the basis
of the Bank's Spot Rate of Exchange on the Rate Fixing Day for that
Advance;
-4-
<PAGE> 5
"PARTICIPATING MEMBER STATE" means a state which adopts the single currency
in accordance with the Treaty on European Union;
"PARTY" means the Bank or, as the context requires, each of the Borrowers;
"PERMITTED DISPOSALS" means
(i) the exchange of any undertaking or assets for any undertaking or
assets of a similar nature and of approximately equal or higher
value;
(ii) the sale of assets for cash and the application within a period of
180 days, of a sum approximately equal to the net proceeds relating
thereto, in the acquisition of assets of a kind generally used by
the Group in its business operations;
(iii) the sale of assets for cash where a sum approximately equal to the
net proceeds relating thereto has been applied in the acquisition of
assets (made during the period of 180 days before the relevant sale)
of a kind generally used by the Group in its business operations;
(iv) disposals of obsolete or redundant plant and equipment not required
for the efficient operation of its business;
(v) disposals of any undertaking or assets to any other member of the
Group;
(vi) disposals in the ordinary course of business; and
(vii) disposals of any undertaking or assets for fair market value on
arm's length terms;
"PERMITTED SECURITY INTEREST" means any of the following:
(i) any Security Interest existing at the date of this Agreement which
has been disclosed in writing to the Bank prior to the date hereof;
or
(ii) any Security Interest which is created with the prior consent of the
Bank; or
(iii) any lien arising by operation of law in the ordinary course of
business; or
(iv) any banker's lien, right of set-off or contractual netting
arrangement and whether arising by operation of law or in the
ordinary course of commercial banking transactions; or
(v) any Security Interest over goods and/or documents of title or
insurance policies and sale contracts in relation to such goods,
arising in the ordinary course of business in connection with
letters of credit and similar transactions where such Security
Interest secures only so much of the acquisition cost of such goods
which is required to be paid within 180 days after the date upon
which the sale was first incurred; or
-5-
<PAGE> 6
(vi) any Security Interest over or affecting any property or asset
acquired by a member of the Group after the date hereof and subject
to which such property or asset is acquired, but only if (a) such
Security Interest was not created in contemplation of the
acquisition of such property or asset by a member of the Group, (b)
the amount thereby secured has not been increased in contemplation
of, or since the date of, the acquisition of such property or asset
by a member of the Group and (c) such Security Interest is
discharged to the satisfaction of the Bank within 12 months of the
acquisition of the property or asset in question; or
(vii) any Security Interest over or affecting any assets of any company
which becomes a member of the Group after the date hereof, where
such Security Interest is created prior to the date on which such
company becomes a member of the Group but only if (a) such Security
Interest was not created in contemplation of such company becoming a
member of the Group, (b) the amount thereby secured (save any
overdrawn amount on the current account of any such company within
the terms (in existence on the date when the company becomes a
member of the Group) of an overdraft (or other equivalent) facility
granted to such company prior to its becoming a member of the Group)
has not been increased in contemplation of, or since the date of,
such company becoming a member of the Group and (c) (save for any
Security Interest created before the date of such company becoming a
member of the Group, over any freehold or leasehold property solely
for the purpose of securing borrowings incurred to acquire such
property) such Security Interest is discharged to the satisfaction
of the Bank within 12 months of such company becoming a member of
the Group; or
(viii) any Security Interest created after the date hereof over any
freehold or leasehold property of a member of the Group solely for
the purpose of securing borrowings incurred to acquire such
property; or
(ix) any Security Interests created or continuing in connection with an
issue of industrial revenue or development bonds or in connection
with some other similar financing to which the Bank has previously
consented; or
(x) any Security Interest created in substitution for any Security
Interest permitted pursuant to this definition provided that the
substituted Security Interest is over the same asset and the
principal amount secured does not exceed principal amount secured on
such asset prior to the substitution; or
(xi) any Security Interest created by one member of the Group in favour
of another member of the Group; or
(xii) any Security Interest arising in respect of goods sold to any member
of the Group in the ordinary course of its business by virtue of any
retention of title provisions contained in the relevant seller's
conditions of sale; or
(xiii) Security Interests (other than those to which one of the preceding
paragraphs of this definition applies) securing, in aggregate, an
amount not exceeding at any time an
-6-
<PAGE> 7
amount equal to 10% of the Consolidated Tangible Net Worth at such
time or if greater Pound Sterling 25,000,000;
"QUALIFYING BANK" means a bank as defined in Section 840A of the Income and
Corporation Taxes Act 1988 (or any statutory re-enactment or modification
thereof) which is within the charge to United Kingdom corporation tax as
regards interest payable or paid to it under this Agreement;
"RATE FIXING DAY" means:
(i) in relation to an Advance denominated in Sterling, its Utilisation
Date; or
(ii) in relation to an Advance denominated in an Optional Currency, the
second Business Day before its Utilisation Date;
"RELEVANT PERIOD" means any financial year of the Group, or, as the case
may be, the second half of one financial year of the Group and the first
half of the subsequent financial year of the Group;
"REQUEST" means a request made by a Borrower to utilise a Facility,
substantially in the form of Schedule 3;
"REQUESTED AMOUNT" means the amount of the Utilisation requested by a
telephone notice of Utilisation or in a Request;
"SECURITY INTEREST" means any mortgage, pledge, lien, charge, assignment,
hypothecation or security interest or any other agreement or arrangement
having the effect of conferring security;
"SIGNING DATE" means the date of this Agreement;
"STERLING" or "Pound Sterling" means the lawful currency for the time being
of the UK;
"SUBSIDIARY" means:
(i) for the purposes of Clauses 16.8, 17.2 and 17.9 and the references
to "Group" in the definitions of "Borrowing Costs" and "Operating
Profit" means any company whose accounts are consolidated with the
accounts of the Company in accordance with accounting principles
generally accepted under accounting standards of the UK; and
(ii) for any other purpose has the meaning given to it by Section 736 of
the Companies Act 1985;
"TANGIBLE ASSETS" means, in relation to a company, the aggregate amount of
any current and fixed assets of that company as shown in its latest audited
balance sheet or, in the case of a company which is a holding company of a
group of companies, its latest audited
-7-
<PAGE> 8
consolidated balance sheet but excluding any amount attributable to
goodwill, intellectual property or other intangible assets of whatever
kind;
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System;
"TERM" means the period selected by a Borrower in a Request for which the
relevant Advance or Bill is to be outstanding;
"TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (which
was signed at Maastricht on 1 February 1992 and came into force on 1
November 1993).
"UK" means the United Kingdom of Great Britain and Northern Ireland; and
"UTILISATION" means:
(i) in the case of a Utilisation comprising any Advances, all the
Advances made or to be made; and
(ii) in the case of a Utilisation comprising Bills, all the Bills
accepted or to be accepted,
following the giving by a Borrower of a Request for those Advances or
Bills; and
"UTILISATION DATE" means:
(i) in relation to an Advance or Utilisation comprising Advances, the
date for the making of the Advance(s); and
(ii) in relation to a Bill or Utilisation comprising Bills, the date for
acceptance of the Bill(s).
1.2 In this Agreement, unless the contrary intention appears, a reference to:
1.2.1 an "AUTHORISATION" includes an authorisation, consent, approval,
resolution, licence, exemption, filing, registration and
notarisation;
1.2.2 a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but,
if not having the force of law and if applicable to the Bank,
being of a type with which the Bank is accustomed to comply) of
any governmental body, agency, department or regulatory or
self-regulatory or other authority;
1.2.3 a "MONTH" is a reference to a period starting on one day in a
calendar month and ending on the numerically corresponding day in
the next calendar month except that, 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;
-8-
<PAGE> 9
1.2.4 a "TAX" includes any tax, levy, assessment, impost, withholding or
other deduction;
1.2.5 "WHOLLY-OWNED" has the meaning given to it in Section 736 of the
Companies Act 1985;
1.2.6 "BANK" includes its successors or assigns or any bank or financial
institution which becomes a party to this Agreement under Clause
25 (Changes to the Parties);
1.2.7 a provision of a law is a reference to that provision as amended
or re-enacted;
1.2.8 a "CLAUSE" or a "SCHEDULE" is a reference to a clause of or a
schedule to this Agreement;
1.2.9 "THIS AGREEMENT" or another document is a reference to this
Agreement or that other document as amended, novated or
supplemented;
1.2.10 a time of day is a reference to London time unless otherwise
stated;
1.2.11 "EURO" means the single currency of Participating Member States to
be introduced on the Commencement Date and "EURO UNIT" means the
currency unit of the euro; and
1.2.12 "NATIONAL CURRENCY UNIT" means the unit of currency (other than a
euro unit) of a Participating Member State.
1.3 Unless the contrary intention appears, a term used in any other document or
notice given under, or in connection with, this Agreement has the same
meaning in that document or notice as in this Agreement.
1.4 The headings in this Agreement are to be ignored in construing this
Agreement.
1.5 Schedule 5 containing indicative timetables is included for ease of
reference and convenience but in the event of any conflict between the
substantive provisions of this Agreement and the contents thereof, the
substantive provisions of this Agreement shall prevail.
2. NATURE OF THE FACILITY
LOAN FACILITY
2.1 The Bank grants to the Borrowers a revolving multi-currency advances
facility under which the Bank shall, during the Availability Period and
when requested by a Borrower, make to such Borrower Advances upon and
subject to the terms of this Agreement.
-9-
<PAGE> 10
ACCEPTANCE CREDIT FACILITY
2.2 The Bank may, at the Bank's sole option, make available to the Borrowers an
acceptance credit facility under which the Bank shall, during the
Availability Period and when requested by a Borrower, accept Bills drawn by
such Borrower upon and subject to the terms of this Agreement.
OVERALL FACILITY LIMIT
2.3 The aggregate Original Sterling Amount of all outstanding Utilisations
shall not at any time exceed the Commitment at that time.
NUMBER OF REQUESTS AND UTILISATIONS
2.4 Any number of Requests may be delivered on the same day and/or specifying
the same Utilisation Date, whether or not the currencies and Terms
requested are similar.
3. PURPOSE
3.1 Each Borrower shall apply each Utilisation made to it towards the general
corporate purposes of the Group.
3.2 Without affecting the obligations of any of the Borrowers in any way, the
Bank shall not be bound to monitor or verify the application of the
proceeds of any Utilisation.
4. CONDITIONS PRECEDENT
DOCUMENTARY CONDITIONS PRECEDENT
4.1 The obligations of the Bank to the Borrowers under this Agreement are
subject to the condition precedent that the Bank has notified the Company
that it has received, not later than 3 Business Days prior to the first
Utilisation Date, all of the documents set out in Part I of Schedule 1 in
form and substance satisfactory to the Bank.
FURTHER CONDITIONS PRECEDENT
4.2 The obligation of the Bank to make each Utilisation is subject to the
further conditions precedent that:
4.2.1 on both the date of the Request and the Utilisation Date for that
Utilisation:
(a) the representations and warranties in Clause 16
(Representations and Warranties) to be repeated on those
dates are correct and will be correct immediately after the
Utilisation; and
(b) no Default is outstanding or might result from the
Utilisation; and
-10-
<PAGE> 11
4.2.2 the Utilisation would not cause Clause 2.3 (Overall facility
limit) to be contravened.
4.2.3 in the case of the first Utilisation either:
(a) the total aggregate amounts outstanding under the Revolving
Multi-Currency Credit Facility and Acceptance Credit Facility
Agreement dated 14 May 1993 (as amended) made between the
Company and Den Danske Bank Aktieselskab the "Existing
Outstandings", shall have been repaid or prepaid in full and
the aggregate commitments under such facility agreement
cancelled on the day of such repayment or prepayment; or
(b) the amount of the first Utilisation together with other sums
available to the Borrower shall be used to repay or prepay
the Existing Outstandings and the aggregate commitments under
such facility agreement cancelled on the day of such
repayment or prepayment.
5. THE FACILITIES
THE LOAN FACILITY
RECEIPT OF REQUESTS FOR ADVANCES
5.1 Any Borrower may utilise the Loan Facility if the Bank receives, not later
than 10.00 a.m. on the Rate Fixing Day a duly completed Request,
substantially in the form of Schedule 3 and signed by an Authorised
Signatory of the relevant Borrower.
5.2 Any Borrower may utilise the Loan Facility by notifying the Bank by
telephone not later than 10.00 a.m. on the Rate Fixing Day provided that a
notice given by telephone shall be confirmed in writing by the delivery by
the relevant Borrower to the Bank of a duly completed Request to be
actually received by the Bank not later than the close of business in
London on the day on which such telephone notice is, or is deemed to have
been, given.
COMPLETION OF REQUESTS FOR ADVANCES
5.3 When giving a notice of Utilisation by telephone and when completing the
Request for Advances, the relevant Borrower must ensure that:
5.3.1 the Utilisation Date is a Business Day;
5.3.2 only one currency is specified and that the Requested Amount is:
(a) if the currency is Sterling, a minimum of Pound Sterling
1,000,000 and an integral multiple of Pound Sterling 100,000;
or
-11-
<PAGE> 12
(b) if the currency is Dollars, a minimum of US $1,000,000 and an
integral multiple of US $100,000; or
(c) if the currency is an Optional Currency other than Dollars, a
minimum and integral multiple of the amounts agreed between
the relevant Borrower and the Bank before the telephone
notice of Utilisation or delivery of that Request; or
(d) such other amounts as the Bank and the relevant Borrower may
agree;
5.3.3 only one Term is specified which:
(a) does not overrun the Availability Period End Date; and
(b) is a period of an approved duration or of an optional
duration; and
5.3.4 the payment instructions comply with Clause 9 (Payments).
In this Clause:
"APPROVED DURATION" means a period of 1, 2, 3 or 6 months; and
"OPTIONAL DURATION" means any other period not exceeding 12
months.
SELECTION OF TERM OF OPTIONAL DURATION
5.4 If the relevant Borrower selects a Term of an optional duration, it may
also select at the time of the telephone notice of Utilisation and in the
relevant Request a Term of any approved duration to apply if the selection
of a Term of an optional duration becomes ineffective in accordance with
sub-Clause 5.5.2.
5.5 If:
5.5.1 the relevant Borrower requests a Term of an optional duration; and
5.5.2 the Bank notifies such Borrower not later than 10.30 a.m. on the
date of receipt by it of the relevant Request or telephone notice
of Utilisation pursuant to Clause 5.1 or Clause 5.2 respectively
that it does not agree to that request,
the Term for the proposed Utilisation shall be the alternative period
specified in the telephone notice of Utilisation or the relevant Request
or, in the absence of any alternative selection, 3 months.
PAYMENT OF PROCEEDS
5.6 Subject to the terms of this Agreement, the Bank shall make the Advance
available to the relevant Borrower on the relevant Utilisation Date.
-12-
<PAGE> 13
THE ACCEPTANCE CREDIT FACILITY
RECEIPT OF REQUESTS
5.7 Subject to Clauses 5.9 and 5.10:
5.7.1 any Borrower may utilise the Acceptance Credit Facility if the
Bank receives, not later than 10.00 a.m. on the proposed
Utilisation Date a duly completed Request, substantially in the
form of Schedule 3 and signed by an Authorised Signatory of such
Borrower; and
5.7.2 any Borrower may utilise the Acceptance Credit Facility by
notifying the Bank by telephone not later than 10.00 a.m. on the
proposed Utilisation Date provided that a notice given by
telephone shall be confirmed in writing by the delivery by such
Borrower to the Bank of a duly completed Request to be actually
received by the Bank not later than the close of business in
London on the day on which such telephone notice is, or is deemed
to have been, given.
COMPLETION OF REQUESTS
5.8 When giving a notice of Utilisation by telephone and when completing the
Request, the relevant Borrower must ensure that:
5.8.1 the Utilisation Date is a Business Day;
5.8.2 the Requested Amount is a minimum of Pound Sterling 1,000,000 and
an integral multiple of Pound Sterling 100,000 or such other
amounts as the Bank and such Borrower may agree;
5.8.3 only one Term is specified which:
(a) does not overrun the Availability Period End Date; and
(b) is a period of 7 to 183 days; and
5.8.4 the payment instructions comply with Clause 9 (Payments).
ACCEPTANCE OF BILLS
5.9 Unless the Bank notifies the relevant Borrower by 11.00 a.m. on the
proposed Utilisation Date that the Bills referred to in the relevant
telephone notice of Utilisation or Request will not be accepted by the
Bank, the Bank shall accept such Bills on the relevant Utilisation Date
provided they are completed in accordance with Clauses 5.11 and 5.12
(Holding and Completion of Bills).
5.10 The Bank shall, as soon as is practicable but not later than 12.30 p.m. on
the Utilisation Date notify the relevant Borrower of the applicable EBDR in
relation to the Bills accepted or to be accepted in accordance with Clause
5.9.
-13-
<PAGE> 14
HOLDING AND COMPLETION OF BILLS
5.11 The relevant Borrower shall ensure that the Bank has a sufficient stock of
Bills, before giving a telephone notice of Utilisation or delivering any
Request for a Utilisation comprising Bills.
5.12 Each Bill shall:
5.12.1 be drawn by the relevant Borrower in its own favour and endorsed
by it in blank;
5.12.2 be undated;
5.12.3 have the Maturity Date and the face amount left blank; and
5.12.4 be claused in a manner which complies with the Bank of England's
requirements for Eligible Bills at that time.
DISCOUNTING OF BILLS
5.13 The Bank may arrange for a Bill accepted by it to be discounted on its
behalf in the London discount market or elsewhere or discount the Bill
itself.
INFORMATION RELATING TO BILLS
5.14 The relevant Borrower shall, promptly on request, supply to the Bank any
information relating to any Bill (including the underlying trade
transaction for that Bill) as the Bank may reasonably require or which may
be required by the Bank of England or any other fiscal or monetary
authority in the UK.
ELIGIBLE BILLS
5.15 The relevant Borrower shall ensure that each Bill drawn by it and accepted
by the Bank is, assuming that the Bank is a bank whose acceptances are then
being treated as eligible acceptances by the Bank of England, eligible for
re-discounting at the Bank of England.
PAYMENT OF PROCEEDS
5.16 Subject to the terms of this Agreement, the Bank shall pay to the relevant
Borrower on the relevant Utilisation Date an amount equal to:
5.16.1 the amount which the Bank receives or would receive as the
proceeds of discounting if it had discounted the Bills accepted by
it hereunder at the applicable EBDR; less
5.16.2 acceptance commission calculated at the applicable Acceptance
Commission Rate on the aggregate principal amount of those Bills.
-14-
<PAGE> 15
NON-ACCEPTANCE OF BILLS
5.17 If the Bank gives the relevant Borrower notice under Clause 5.9 that the
Bills referred to in the relevant telephone notice of Utilisation or
Request will not be accepted by the Bank then, unless such Borrower, by
notice to the Bank by 12.00 p.m. on the relevant Utilisation Date elects
for the telephone notice of Utilisation or Request to be cancelled, without
penalty, the said notice or Request shall be deemed to have been a request
for an Advance of an amount equal to the Requested Amount and for a Term
equal to the Term specified in the telephone notice or Request (or if the
Bank does not agree to that Term then for a Term of 3 months) to be made
available to such Borrower on such Utilisation Date.
STANDARD OF CARE
5.18 In holding and dealing with Bills delivered to it under this Clause, the
Bank shall use the same standard of care as it uses in holding and dealing
with its own notes, bills or certificates of deposit and shall indemnify
the relevant Borrower for any failure so to do. If the Commitment has been
reduced to zero the Bank shall forthwith destroy all uncompleted Bills held
by it and shall provide to the Company a certificate of destruction in
respect thereof.
6. CANCELLATION AND EXTENSION
AUTOMATIC CANCELLATION OF THE COMMITMENT
6.1 The Commitment shall be automatically cancelled at close of business on the
Availability Period End Date.
VOLUNTARY CANCELLATION
6.2 The Company may, without penalty and by giving not less than 15 days' prior
notice to the Bank, cancel the Commitment in whole or in part.
6.3 A notice of cancellation will be irrevocable and shall specify:
6.3.1 the date on which the cancellation is to become effective; and
6.3.2 the amount of the Commitment to be cancelled.
6.4 Any cancellation may only take effect in respect of the unutilised portion
of the Commitment as at the date the notice is to be effective.
NO REINSTATEMENT
6.5 No amount of the Commitment cancelled under this Agreement may subsequently
be reinstated.
-15-
<PAGE> 16
EXTENSION
6.6 Not more 30 days but not less than 5 days prior to the Availability Period
End Date the Company may request that the Bank extend the Acceptance Credit
Facility and/or the Loan Facility for a further period of 364 days. Any
such request shall be irrevocable and in writing. The Bank shall have
absolute discretion as to whether to agree to such an extension, and the
Bank shall advise the Company in writing of its decision as soon as
reasonably practicable, and in any event, not less than 3 days prior to the
Availability Period End Date. If the Bank agrees to such extension the
Acceptance Credit Facility and/or the Loan Facility shall be extended so
that the Availability Period End Date becomes the day 364 days after the
Availability Period End Date prior to such extension.
7. INTEREST
INTEREST RATE
7.1 The rate of interest on each Advance for its Term is the rate per annum
determined by the Bank to be the aggregate of the applicable:
7.1.1 Margin,
7.1.2 LIBOR; and
7.1.3 Mandatory Costs.
DUE DATES
7.2 Except as otherwise provided in this Agreement, accrued interest on each
Advance is payable on its Maturity Date and also, in the case of an Advance
with a term longer than six months, on the date falling six months after
its Utilisation Date.
DEFAULT INTEREST
7.3 If any Borrower fails to pay any amount payable by it under this Agreement,
it shall, on demand by the Bank from time to time, pay interest on the
overdue amount from the due date up to the date of actual payment, after as
well as before judgment, at a rate (the "DEFAULT RATE") determined by the
Bank to be one (1) per cent. per annum above the higher of:
7.3.1 the rate on the overdue amount under Clause 7.1 (Interest rate)
immediately before the due date (but only if the overdue amount is
an Advance (or part thereof) and only for the period up to and
including the Maturity Date of that Advance); and
7.3.2 the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted an Advance in the
currency of the overdue
-16-
<PAGE> 17
amount for such successive Terms of such duration (not exceeding
three months) as the Bank may reasonably determine (each a
"DESIGNATED TERM").
7.4 The default rate will be determined on the first day of, or two Business
Days before the first day of, the relevant Designated Term, as appropriate.
7.5 If the Bank determines that deposits in the currency of the overdue amount
are not at the relevant time being made available by leading banks in the
London Interbank Market, the default rate will be determined by reference
to the cost of funds to the Bank from whatever sources it may reasonably
select.
7.6 Default interest shall be compounded at the end of each Designated Term
until it is paid.
NOTIFICATION OF RATES OF INTEREST
7.7 The Bank shall promptly notify the relevant Borrower of the determination
of any applicable rate of interest under this Agreement.
8. REPAYMENT AND PREPAYMENT
PAYMENT OF BILLS
8.1 Each Borrower shall pay to the Bank an amount equal to the principal amount
of each of its Bills accepted by the Bank on the Maturity Date for each
such Bill.
REPAYMENT OF ADVANCES
8.2 Each Borrower shall repay each Advance made to it in full on its Maturity
Date to the Bank. If an Advance (the "NEW ADVANCE") is to be made to a
Borrower on the day on which another Advance (the "MATURING ADVANCE") in
the same currency is due to be repaid by such Borrower then, subject to the
terms of this Agreement and so long as the conditions referred to in Clause
4.2 shall have been satisfied in relation to the New Advance:
8.2.1 the Maturing Advance shall be deemed to have been repaid on its
Maturity Date either in whole (if the New Advance is equal to or
greater than the Maturing Advance) or in part (if the New Advance
is less than the Maturing Advance); and
8.2.2 to the extent that a Maturing Advance is so deemed to have been
repaid, the principal amount of the New Advance to be made on such
a date shall be deemed to have been credited to the account of
such Borrower by the Bank in accordance with the terms of this
Agreement and, as the case may be:
(a) the Bank shall only be obliged to make available to such
Borrower pursuant to Clause 5.6 a principal amount equal to
the amount (if any) by which the New Advance exceeds the
Maturing Advance; or
-17-
<PAGE> 18
(b) such Borrower shall only be obliged to pay to the Bank
pursuant to this Clause 8.2 a principal amount equal to the
amount by which the Maturing Advance exceeds the New Advance.
8.3 On the Availability Period End Date, all outstanding Utilisations and other
sums (if any) then owing under this Agreement shall in any event be repaid
or paid in full.
PREPAYMENT OF BILLS
8.4 Any Borrower may, by giving not less than 15 days' prior notice to the
Bank, prematurely comply with its obligations under Clause 8.1 (Payment of
Bills).
8.5 If, under the terms of this Agreement, including without limitation this
Clause 8 and Clauses 14.1.2 and 15.2.2, a Borrower prematurely complies
with its obligations under Clause 8.1 (Payment of Bills) in respect of any
Bill, then the amount payable by such Borrower shall be the principal
amount equal to the Bill discounted on the basis of such normal commercial
rates prevailing at the time of payment for Sterling deposits of an amount
equal to the amount so paid for the period from the time of payment to the
Maturity Date of the Bill as the Bank may reasonably determine. If and to
the extent that a Borrower pays more than it is obliged to pay under this
Clause then the Bank shall pay to such Borrower an amount equal to such
over-payment by no later than the Maturity Date of the relevant Bill.
PREPAYMENT OF ADVANCES
8.6 Any Borrower may, without penalty and on giving not less than 15 days'
prior notice to the Bank, prepay all or any part of an Advance, but if in
part, in a minimum amount of Pound Sterling 1,000,000 and an integral
multiple of Pound Sterling 100,000 (or the comparable amount in any
Optional Currency).
8.7 Any notice by a Borrower of prepayment under this Agreement is irrevocable.
8.8 Should any person or group of persons, acting either individually or in
concert (as defined in the City Code on Take Overs and Mergers effective as
at the date of this Agreement) otherwise than with the consent of the Bank
acquire control of the Company (and for the purpose of this Clause a single
person or group of persons shall have acquired control if it or they own or
hold more than 50% (fifty per cent.) of the issued share capital of the
Company having the right to attend and vote at general meetings of the
Company or more than 50% (fifty per cent.) of such rights), then:
8.8.1 the Company shall immediately upon becoming aware thereof notify
the Bank specifying the date of such acquisition and the name of
such person or persons acquiring control; and
8.8.2 thereafter no Borrower shall be permitted to request a Utilisation
unless the terms of the acquisition of control of the Company were
approved by the Board of Directors of the Company and the Maturity
Date for any Utilisation requested
-18-
<PAGE> 19
falls on a date not more than three months after the expiration of
the 30 day period referred to in Clause 8.9.
8.9 If the terms of the acquisition of control of the Company were approved by
the Board of Directors of the Company, the Bank shall consult with the
Company during the period of 30 days after receipt of the notification from
the Company referred to in sub-Clause 8.8.1 and shall be entitled to give a
notice of continuance of each Facility to the Company. Upon receipt of such
notice of continuance, the right of the Borrowers to request a Utilisation
without the limitation referred to in sub-Clause 8.8.2 shall be reinstated.
8.10 If the terms of the acquisition of control of the Company were approved by
the Board of Directors of the Company but, at the end of the period of 30
days referred to in Clause 8.9 above, the Company has not received a notice
of continuance then:
8.10.1 the Acceptance Credit Facility and the Loan Facility shall be
cancelled;
8.10.2 any outstanding Utilisations with Maturity Dates falling later
than three months after the end of such period shall be prepaid on
the date falling three months after the end of such period,
together with accrued interest thereon up to the date of payment
and all other amounts payable to the Bank hereunder; and
8.10.3 any outstanding Utilisations with Maturity Dates falling not later
than three months after the end of such period shall be repaid on
their respective Maturity Dates.
8.11 If the terms of the acquisition of control of the Company were not approved
by the Board of Directors of the Company, then unless the Bank shall have
confirmed within 2 days of receipt of the notice referred to in sub-Clause
8.8.1 that each Facility shall be continued, each Facility shall be
cancelled and any outstanding Utilisations shall be repayable on demand by
the Bank together with accrued interest thereon up to the date of payment
and all other amounts payable to the Bank hereunder.
8.12 Any prepayment of an Advance under this Agreement shall be made together
with accrued interest on the amount prepaid together with any amount
payable to the Bank pursuant to Clause 22.3
8.13 No Advance may be prepaid otherwise than in accordance with the express
terms of this Agreement.
9. PAYMENTS
PLACE
9.1 All payments by each of the Borrowers or the Bank under this Agreement
shall be made to such account at such office or bank in the principal
financial centre of the relevant currency as it may notify the other or to
such other place as may be agreed between the parties for this purpose.
-19-
<PAGE> 20
FUNDS
9.2 Payments under this Agreement shall be made:
9.2.1 if in Sterling on the due date in Sterling, by banker's payment or
by CHAPS;
9.2.2 if in Dollars on the due date in Dollars and in same day funds;
9.2.3 if in an Optional Currency (other than Dollars) in the place for
payment on the due date in lawful money of the country of that
Optional Currency, in immediately available funds, or at such
times or in such funds as the Bank may specify to the relevant
Borrower as being customary at the time for the settlement of
transactions in the relevant currency in the place for payment.
CURRENCY
Subject to clauses 9.6 and 9.7:
9.3 A repayment or prepayment of an Advance is payable in the currency in which
the Advance is denominated.
9.4 Interest is payable in the currency in which the relevant amount in respect
of which it is payable is denominated.
9.5 Any other amount payable under this Agreement is, except as otherwise
provided in this Agreement, payable in Sterling.
9.6 Subject to clause 9.7, on and after the Commencement Date, any Advance
requested to be denominated in the currency of a Participating Member State
shall be made in the euro unit.
9.7 If and to the extent that any EMU legislation provides that an amount
denominated either in the euro unit or in the national currency unit of a
given Participating Member State and payable within that Participating
Member State by crediting an account of the creditor, can be paid by the
debtor either in the euro unit or in that national currency unit, a Party
shall be entitled to pay that amount either in the euro unit or in the
relevant national currency unit.
SET-OFF AND COUNTERCLAIM
9.8 All payments made by each of the Borrowers under this Agreement shall be
made without set-off or counterclaim.
NON-BUSINESS DAYS
9.9 If a payment under this Agreement is due on a day which is not a Business
Day, then the due date for the payment shall instead be the next Business
Day.
-20-
<PAGE> 21
9.10 During any extension of the due date for payment of any principal under
this Agreement pursuant to Clause 9.9 above interest is payable on the
principal at the rate payable on the original due date.
PARTIAL PAYMENTS
9.11 If the Bank receives a payment insufficient to discharge all the amounts
then due and payable by any Borrower under this Agreement, the Bank shall
apply that payment towards the obligations of such Borrower under this
Agreement in the following order:
9.11.1 firstly, in or towards payment of any unpaid costs and expenses of
the Bank under this Agreement;
9.11.2 secondly, in or towards payment of any accrued fees due but unpaid
under Clause 19.2 (Commitment Fee);
9.11.3 thirdly, in or towards payment of any accrued interest due but
unpaid under this Agreement;
9.11.4 fourthly, in or towards payment of any principal due but unpaid
under this Agreement, and
9.11.5 fifthly, in or towards payment of any other sum due but unpaid
under this Agreement.
9.12 The Bank may vary the order set out in sub-Clauses 9.11.1 to 9.11.5 above.
9.13 Clauses 9.11 and 9.12 above shall override any appropriation made by any
Borrower.
10. OPTIONAL CURRENCIES
SELECTION
10.1 No Borrower may request an Advance denominated in an Optional Currency
unless the Bank has confirmed to such Borrower that the Optional Currency
is readily available and freely transferable in the London foreign exchange
market.
CHANGE OF CURRENCY
10.2 If, on the Rate Fixing Day of an Advance to be denominated in an Optional
Currency, the Bank determines that:
10.2.1 it is impracticable for reasons beyond its control for the Bank to
fund the Advance for its Term in that Optional Currency in the
ordinary course of business in the London Interbank Market; or
10.2.2 the use of the proposed Optional Currency might contravene any law
or regulation,
-21-
<PAGE> 22
then:
10.2.3 the Bank shall promptly and in any event before 10.30 a.m. on that
Rate Fixing Day notify the relevant Borrower;
10.2.4 if the Bank receives notice from the relevant Borrower by 11.30
a.m. on that Rate Fixing Day to that effect, the Advance will not
be made; and
10.2.5 if the Bank does not receive any notice under sub-Clause 10.2.4
above, the Advance will be denominated instead in Sterling in an
amount equal to its Original Sterling Amount.
NOTIFICATION OF RATES AND AMOUNTS
10.3 The Bank shall, on request, promptly notify the relevant Borrower of any
applicable Bank's Spot Rate of Exchange or Original Sterling Amount
promptly after it has been ascertained.
10.4 If an Advance which has been drawn in an Optional Currency is reborrowed in
the same Optional Currency immediately following its repayment, then the
Original Sterling Amount of such new Advance denominated in such Optional
Currency shall be recalculated for the new Term in accordance with the
terms and conditions of this Agreement and if on the relevant Utilisation
Date the aggregate Original Sterling Amount of all Utilisations outstanding
on such date exceeds the Commitment, then any excess shall be repaid to the
Bank by the relevant Borrower upon the Bank's first written demand.
11. TAXES
GROSS-UP
11.1 All payments by each of the Borrowers under this Agreement shall be made
without any deductions and free and clear of and without deduction for or
on account of any Relevant Taxes except to the extent that any Borrower is
required by law to make payment subject to any such taxes. If any Relevant
Tax or amounts in respect of any Relevant Tax must be deducted from any
amounts payable or paid by any Borrower hereunder, such Borrower shall pay
such additional amounts as may be necessary to ensure that the Bank
receives a net amount equal to the full amount which it would have received
had payment not been made subject to tax.
"RELEVANT TAX" in relation to any payment which falls to be made hereunder
means any present or future taxes of any nature now or hereafter imposed by
the laws of (i) the United Kingdom, (ii) any other jurisdiction from which,
or through which, such payment is made or to the taxation laws of which the
relevant Borrower is at the time of such payment subject, (iii) any
political sub-division of the United Kingdom or any such other jurisdiction
or (iv) any federation or association of states of which the United Kingdom
or any such other jurisdiction is, at the time of such payment, a member.
-22-
<PAGE> 23
TAX RECEIPTS
11.2 All Relevant Taxes required by law to be deducted or withheld by any
Borrower from any amount paid or payable under this Agreement shall be paid
by such Borrower when due (unless the obligation to pay is being disputed
in good faith) and such Borrower shall, within 30 days of the payment being
made, deliver to the Bank evidence satisfactory to the Bank (including all
relevant tax receipts) that the payment has been duly remitted to the
appropriate authority.
TAX CREDITS
11.3 If any Borrower pays any additional amount (a "TAX PAYMENT") under Clause
11.1 and the Bank effectively obtains a refund of tax, or a relief or
credit against tax by reason of that Tax Payment (a "TAX CREDIT"), and the
Bank is able to identify the Tax Credit as being attributable to the Tax
Payment, then the Bank shall reimburse to the relevant Borrower such amount
as the Bank reasonably determines to be the proportion of the Tax Credit as
will leave the Bank (after that reimbursement) in no better or worse
position that it would have been if the Tax Payment had not been required.
Nothing in this Clause interferes with the right of the Bank to arrange its
tax affairs in whatever manner it thinks fit and, without prejudice to the
foregoing, the Bank is under no obligation to claim a Tax Credit, or to
claim a Tax Credit in priority to any other claim, relief, credit or
deduction available to it. The Bank is not obliged to disclose any
information regarding its tax affairs or computations to any Borrower.
QUALIFYING BANK
11.4 If, otherwise than as a result of the introduction of, change in, or change
in the interpretation, administration or application of, any law or
regulation or any practice or concession of the Inland Revenue after the
Signing Date, the Bank ceases to be a Qualifying Bank no Borrower shall be
liable to pay to the Bank under Clause 11.1 (Gross-up) any amount in
respect of taxes levied or imposed by the UK or any taxing authority
thereof or therein in excess of the amount it would have been obliged to
pay if the Bank had been or had not ceased to be a Qualifying Bank.
12. MARKET DISRUPTION
MARKET DISRUPTION - ADVANCES
12.1 If, in relation to any proposed Utilisation comprising Advances:
12.1.1 the Bank is unable to obtain from leading banks a rate for the
purposes of determining the applicable LIBOR or the Bank otherwise
determines that adequate and fair means do not exist for
ascertaining the applicable LIBOR; or
12.1.2 in the opinion of the Bank:
-23-
<PAGE> 24
(a) matching deposits may not be available to it in the London
Interbank Market in the ordinary course of business to fund
an Advance; or
(b) the cost to it of matching deposits in the London Interbank
Market would be in excess of the relevant LIBOR,
the Bank shall notify the Company by 10.30 a.m. or as soon as is
practicable thereafter on the Rate Fixing Day of the fact and that this
Clause is in operation.
12.2 After any notification under Clause 12.1. above:
12.2.1 subject to sub-Clause 12.2.3 below the relevant Advance shall be
made in Sterling in an amount equal to its Original Sterling
Amount (unless Sterling was the original currency of the relevant
Advance);
12.2.2 subject to sub-Clause 12.2.3 below, no further notices of
Utilisation by telephone or Requests for Advances to be
denominated in the original currency of the affected Advance may
be delivered until the Bank notifies the Company that the event
specified in the notification no longer prevails;
12.2.3 the relevant Borrower may, by notice to the Bank by 11.00 a.m.
(or, if later, within 30 minutes of receipt by the Company of a
notification under Clause 12.1) on the Rate Fixing Day: (i) elect
for the notice of Utilisation by telephone or Request to be
cancelled without penalty; (ii) if the Advance was to be made in
an Optional Currency, elect for the Advance to be made in an
Optional Currency other than a currency affected by the event
specified in the notification or (iii) elect for the Advance to be
made in accordance with the Request notwithstanding the event
specified in the notification. If any Borrower requires an
affected Advance to be made in the original currency selected for
such Advance notwithstanding the event specified in the
notification then within five Business Days of receipt of the
notification, the Company and the Bank shall enter into
negotiations for a period of not more than 25 days with a view to
agreeing a substitute basis for determining the rate of interest
and/or funding applicable to the affected Advance and any future
Advances in the currency of the affected Advance provided that if
no substitute basis is agreed within that period:
(a) the Bank shall certify to the Company (such certificate to be
conclusive) the alternative interest rate calculated in
accordance with sub-Clause 12.2.4 below;
(b) the certificate may make provision for different funding
periods and shall be retroactive to the beginning of the then
current Term; and
(c) the certificate shall be binding on each relevant Borrower
unless the Company gives notice to the Bank within five
Business Days of the receipt of the certificate that the
certificate is not acceptable and that each relevant Borrower
shall prepay in full the relevant Advances on a Business Day
specified in the notice, which shall be not less than five
-24-
<PAGE> 25
nor more than thirty days after the date of the Bank's
certificate to the Company; and
12.2.4 for the purposes of sub-Clause 12.2.3(a) above the rate of
interest on each Advance shall be the rate certified by the Bank
as the rate per annum determined by the Bank to be the aggregate
of:
(i) the Margin;
(ii) the rate notified by the Bank, on or before the last
day of its Term, as being the cost to the Bank of
funding the Advance from such other sources as it may
reasonably select; and
(iii) the applicable Mandatory Cost if any.
12.3 During the period when any substitute basis is in force in relation to a
particular currency, the Bank shall periodically determine whether the
circumstances referred to in Clause 12.1 above still apply and, if they do
not, shall forthwith give notice in writing to the Company of the date on
which the substitute basis will cease to apply.
MARKET DISRUPTION - BILLS
12.4 If, in relation to any Bills:
12.4.1 the Bank, acting reasonably, determines that adequate and fair
means do not exist for determining the applicable EBDR; or
12.4.2 the Bank, acting reasonably, determines that the Bills do not
comply with the then current Bank of England regulations for
Sterling bankers' acceptances
the Bank shall notify the Company by 12.00 p.m. on the Utilisation Date of
the fact and that this Clause is in operation.
12.5 After any notification under Clause 12.4 above:
12.5.1 those Bills shall not be accepted;
12.5.2 in the case of Clause 12.4.1, no further Requests for Bills may be
delivered until the Bank notifies the Company that it is once
again able to determine EBDR; and
12.5.3 unless the relevant Borrower, by notice to the Bank by 12.30 p.m.
on the relevant Utilisation Date, elects for the telephone notice
of Utilisation or Request for Bills to be cancelled without
penalty, the said notice or Request shall be deemed to have been a
request for an Advance of an amount equal to the Requested Amount
and for a Term equal to the Term specified in the telephone notice
or Request (or if the Bank does not agree to that Term, then for a
Term of 3 months) to be made available to such Borrower on such
Utilisation Date.
-25-
<PAGE> 26
13. INCREASED COSTS
INCREASED COSTS - SERVICE OF DEMAND
13.1 If the result of any introduction of or change in any law or regulation
after the Signing Date, or of any change in the application or
interpretation of any such changed law or regulation or compliance by the
Bank with any such changed law or regulation after the Signing Date
(including, without limitation, any law or regulation relating to taxation,
any reserve, special deposit, cash ratio, liquidity or capital adequacy
requirement or any form of banking or monetary control but excluding (i)
changes arising from the implementation by any authority having
jurisdiction over the Bank or its holding company of the matters set out in
the statement prepared by the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as amended in
November 1991) and (ii) changes arising from the implementation in whole or
in part by any authority having jurisdiction over the Bank or its holding
company of the proposals contained in the matters set out in the EC
Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment
firms and credit institutions) is that the Bank incurs an increased cost,
then the Bank will promptly notify the Company of the relevant event and
the Company shall on demand pay to the Bank such amount as the Bank
certifies in the demand will compensate it for the applicable increased
cost.
13.2 In this Clause 13 "INCREASED COST" means:
13.2.1 an additional cost incurred by the Bank as a result of it having
entered into, or performing, maintaining or funding its
obligations under, this Agreement; or
13.2.2 that portion of an additional cost incurred by the Bank in making,
funding or maintaining all or any advances comprised in a class of
advances formed by or including the Advances made or to be made by
it under this Agreement as is attributable to it making, funding,
or maintaining such advances; or
13.2.3 a reduction in any amount payable to the Bank or the effective
return to the Bank under this Agreement or on its capital; or
13.2.4 any payment made or interest or other return on or calculated by
reference to any amount received or receivable by the Bank under
this Agreement which is forgone.
13.3 When calculating an increased cost, the Bank may allocate or spread costs,
liabilities and losses to or across its liabilities or assets, or any class
of liabilities or assets, and on such basis, as it reasonably considers
appropriate.
INCREASED COSTS - EXCEPTIONS
13.4 An increased cost does not include any increased cost:
13.4.1 compensated for by the payment of the Mandatory Cost;
-26-
<PAGE> 27
13.4.2 compensated for by the operation of Clause 11 (Taxes);
13.4.3 attributable to any change in the rate of tax on the overall net
income of the Bank (or the overall net income of a division or
branch of the Bank) imposed in the jurisdiction in which its
principal office or the relevant lending office for the time being
is situate;
13.4.4 payable to an assignee or transferee of the Bank at the time of an
assignment, transfer or novation under Clause 25 (Changes to the
Parties), but only to the extent that the increased cost would not
have been payable to the assigning, transferring or novating Bank;
or
13.4.5 which is attributable to the introduction of the euro other than
an increased cost which is being incurred generally by banks
transacting euro business in the London interbank market.
14. ILLEGALITY
14.1 If it is or becomes unlawful for the Bank to give effect to any of its
obligations as contemplated by this Agreement or to fund or maintain any
Utilisation, then the Bank shall notify the Company accordingly and on the
Maturity Date of each relevant Utilisation (or such earlier date as the
relevant law or directive may require):-
14.1.1 the relevant Borrower shall repay or prepay, as the case may be,
any Advances made to it by the Bank together with all other
amounts payable by it to the Bank under this Agreement; and
14.1.2 the Company's obligations under Clause 8.1 (Payment of Bills) in
respect of Bills accepted by the Bank shall immediately become due
for performance and the Company shall immediately perform those
obligations.
14.2 The Bank's Commitment shall be cancelled on the date of a notification
under Clause 14.1 above.
15. TAXES AND INCREASED COSTS - ADDITIONAL RIGHTS
PREPAYMENT AND CANCELLATIONS
15.1 If any Borrower is required to pay any additional amounts to the Bank under
Clause 11 (Taxes) or compensation under Clause 13 (Increased Costs), the
Company may, whilst the circumstances giving rise to the requirement
continue, serve a notice of prepayment and cancellation in relation to all
or all affected Advances and Bills on the Bank.
15.2 On the tenth Business Day after the date of service of the notice:
-27-
<PAGE> 28
15.2.1 each Borrower shall prepay the relevant Advance or Advances made
to it by the Bank together with all other amounts in relation to
such Advance(s) payable by it to the Bank under this Agreement;
and
15.2.2 each Borrower's obligations under Clause 8.1 (Payment of Bills) in
respect of Bills accepted by the Bank shall immediately become due
for performance and the relevant Borrowers shall immediately
perform those obligations.
15.3 To the extent of the Utilisations referred to in the notice of prepayment
and cancellation, but not further or otherwise, the Bank's Commitment shall
be cancelled on the date of service of the notice.
MITIGATION
15.4 If, in respect of the Bank, circumstances arise which would or would, with
the giving of notice, result in:
15.4.1 any additional amounts becoming payable under Clause 11 (Taxes);
or
15.4.2 any increased cost becoming payable under Clause 13 (Increased
Costs); or
15.4.3 any prepayment, payment or cancellation under Clause 14
(Illegality), then the Bank shall endeavour to take such steps as
are reasonably open to it to mitigate or remove those
circumstances (including seeking recovery for the account of the
relevant Borrower where reasonably practicable and/or transferring
its rights and obligations under this Agreement to another bank or
financial institution acceptable to the Company).
15.5 Clause 15.4 above does not:
15.5.1 prejudice the obligations of any Borrower under this Agreement
(including, without limitation, under the Clauses referred to in
Clause 15.4 above); or
15.5.2 require the Bank to take any action which, in its opinion, might
be in any way prejudicial to it or conflict with its banking
policies.
16. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
16.1 Each Borrower makes the representations and warranties set out in this
Clause to the Bank.
STATUS
16.2 It is a limited liability company, duly incorporated and validly existing
under the laws of the jurisdiction of its incorporation.
-28-
<PAGE> 29
POWERS AND AUTHORITY
16.3 It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of this
Agreement and the transactions contemplated by this Agreement.
LEGAL VALIDITY
16.4 This Agreement constitutes its legal, valid and binding obligation.
NON-CONFLICT
16.5 The entry into and performance by it of, and the transactions contemplated
by, this Agreement do not and will not:
16.5.1 conflict with any applicable law or regulation or any judicial
order; or
16.5.2 conflict with its Memorandum and Articles of Association or other
constitutional documentation; or
16.5.3 conflict with any document which is binding on it or any of its
assets.
NO EVENT OF DEFAULT
16.6 No Event of Default is outstanding or might result from any Utilisation.
AUTHORISATIONS
16.7 All authorisations required in connection with the entry into, performance
and validity of, and the transactions contemplated by, this Agreement have
been obtained or effected (as appropriate) and are in full force and
effect.
ACCOUNTS
16.8 In the case of the Company only:
16.8.1 the Original Accounts fairly represent the consolidated financial
position of the Group at the date to which they were drawn up; and
16.8.2 the audited consolidated accounts most recently delivered to the
Bank:
(a) have been prepared in accordance with accounting principles
and practices generally accepted in the UK consistently
applied or if not consistently applied together with details
of the changes in such application; and
(b) fairly represent, when read in conjunction with the relevant
notes and auditors' report, the consolidated financial
condition of the companies
-29-
<PAGE> 30
comprising the Group as at the date to which they were drawn
up, and the results of its consolidated operations for the
year ended on that date.
MATERIAL ADVERSE CHANGE
16.9 There has been no material adverse change in the consolidated financial
condition of the Group since the date to which the Original Accounts were
drawn up which would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement.
LITIGATION
16.10 No litigation, arbitration or administrative proceedings are current or,
to its knowledge, pending or threatened against any member of the Group,
which would have a material adverse effect on the ability of the Company
to perform its obligations under this Agreement.
TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
16.11 The representations and warranties set out in this Clause will survive the
execution of this Agreement and the making of each Utilisation.
16.12 The representations and warranties set out in this Clause are made by the
Company on the Signing Date and the representations and warranties set out
in Clauses 16.2 to 16.10 shall be deemed to be repeated by the Company and
the relevant Borrower on the date of each Request made by such Borrower
and the date of each Utilisation made to such Borrower with reference to
the facts and circumstances then existing.
17. UNDERTAKINGS
DURATION
17.1 The undertakings in this Clause remain in force from the Signing Date for
so long as any amount is or may be outstanding under this Agreement or the
Commitment is in force.
INFORMATION - ACCOUNTS
17.2 The Company shall send to the Bank:
17.2.1 as soon as the same are available (and in any event within 180
days of the end of each of its financial years) the audited
consolidated accounts of the Group for that financial year;
17.2.2 as soon as the same are available (and in any event within 150
days of the end of the first half-year of each of its financial
years) the interim statement of the Company for that half-year;
and
-30-
<PAGE> 31
17.2.3 together with the accounts specified in sub-Clause 17.2.1 a
certificate signed by its auditors setting out in reasonable
detail computations establishing compliance with Clause 17.9
(Interest Cover Ratio).
INFORMATION - MISCELLANEOUS
-31-
<PAGE> 32
17.3 The Company shall supply to the Bank, promptly at the request of the Bank:
17.3.1 a certificate signed by two of its senior officers on its behalf
setting out a list of the then current Material Subsidiaries,
together with computations in reasonable detail showing the bases
for the list; and
17.3.2 Such further information in the possession or control of any
member of the Group regarding its financial condition or
operations as the Bank may reasonably require.
NOTIFICATION OF DEFAULT
17.4 Each Borrower shall notify the Bank of any Event of Default (and the
steps, if any, being taken to remedy it) immediately upon it becoming
aware of the same.
AUTHORISATIONS
17.5 Each Borrower shall promptly:
17.5.1 obtain, maintain and comply with the terms of; and
17.5.2 supply certified copies to the Bank of,
any authorisation required under any law or regulation to enable it to
perform its obligations under, or for the validity of, this Agreement.
PARI PASSU RANKING
17.6 Each Borrower shall procure that its obligations under this Agreement do
and will rank at least pari passu with all its other present and future
unsecured obligations, except for claims in respect of obligations which
are mandatorily preferred by law applying to companies generally.
NEGATIVE PLEDGE
17.7 The Company shall not, and the Company shall procure that none of its
Subsidiaries will, create or permit to subsist any Security Interest in
respect of Borrowings on any of its assets except for Permitted Security
Interests.
DISPOSALS
17.8 Except for Permitted Disposals, the Company shall not, and the Company
shall procure that none of its Subsidiaries will, either in a single
transaction or in a series of transactions, whether related or not and
whether voluntarily or involuntarily, sell, transfer, grant or lease or
otherwise dispose of assets (other than current assets) if either:
17.8.1 the asset(s) so disposed of in any such single transaction have a
net book value exceeding 10 per cent. of Consolidated Tangible Net
Worth (as shown in the latest audited accounts of the Group); or
-32-
<PAGE> 33
17.8.2 the asset(s) so disposed of (when aggregated with all other
disposals within the preceding 30 month period (except for
Permitted Disposals)) have a net book value exceeding 30 per cent.
of Consolidated Tangible Net Worth (as shown in the latest audited
accounts of the Group),
except with the prior consent of the Bank (such consent not to be
unreasonably withheld).
For the purpose of this Clause, "NET BOOK VALUE" means the book value of
that asset net of depreciation and other provisions.
INTEREST COVER RATIO
17.9 The Company shall procure that the ratio of Operating Profit to Borrowing
Costs is not, at the end of each Relevant Period, less than 3 to 1.
18. DEFAULT
EVENTS OF DEFAULT
18.1 Each of the events set out in Clauses 18.2 to 18.13 (inclusive) is an
Event of Default (whether or not caused by any reason whatsoever outside
the control of the relevant Borrower or any other person), except that if
any of the events specified in Clauses 18.6 to 18.13 (inclusive) occurs in
relation to a Material Subsidiary which is not a Borrower it will only be
an Event of Default if the event is, in the reasonable opinion of the
Bank, reasonably likely to affect materially and adversely the Company's
ability to perform its obligations under this Agreement.
NON-PAYMENT
18.2 Any Borrower defaults in payment on the due date of any amount payable by
it under this Agreement at the place at and in the currency in which it is
expressed to be payable and the default is not remedied within seven
Business Days after the Bank gives notice to the Company and the relevant
Borrower of the default.
BREACH OF OTHER OBLIGATIONS
18.3 Any Borrower fails to observe or perform any other obligation on its part
contained in this Agreement (other than those which, in the reasonable
opinion of the Bank, are not material), and (in the case of a breach
capable of being remedied) fails to remedy the breach within fourteen
Business Days after the date on which the Company and the relevant
Borrower receive notice of the breach from the Bank.
MISREPRESENTATION
18.4 A representation, warranty or statement made or repeated in, this
Agreement by any Borrower proves to have been untrue in any material
particular when made or deemed to be repeated.
-33-
<PAGE> 34
CROSS-DEFAULT
18.5 The principal amount of any Borrowings of any Borrower or Material
Subsidiary:
18.5.1 are not paid when due (after the expiry of any applicable grace
period); or
18.5.2 become prematurely due and payable or are placed on demand as a
result of an event of default (howsoever described) under the
document relating to those Borrowings,
in circumstances where the aggregate amount of such Borrowings exceeds
Pound Sterling 10,000,000 (or its equivalent in other currencies).
INSOLVENCY
18.6 Any Borrower or Material Subsidiary is, or is deemed for the purposes of
any law to be, unable to pay its debts generally as they fall due or to be
insolvent, or admits inability to pay its debts generally as they fall
due.
18.7 Any Borrower or Material Subsidiary suspends making payments on all or any
class of its debts or announces an intention to do so, or a moratorium is
declared in respect of any of its indebtedness.
INSOLVENCY PROCEEDINGS
18.8 Any of the following occurs:
18.8.1 a meeting of any Borrower or Material Subsidiary is convened to
consider a resolution to present an application for an
administration order or any such resolution is passed; or
18.8.2 any step (including petition, proposal or convening a meeting) is
taken with a view to a composition, assignment or arrangement
with any creditors of, or the rehabilitation, administration,
custodianship, liquidation, or dissolution of, any Borrower or
Material Subsidiary or any other insolvency proceedings involving
any Borrower or Material Subsidiary; or
18.8.3 any order is made or resolution passed for any such composition,
assignment, arrangement, rehabilitation, administration,
custodianship, liquidation, dissolution or insolvency
proceedings, or any Borrower or Material Subsidiary becomes
subject to or enters into any of the foregoing; or
18.8.4 any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrator or the like is
appointed in respect of any Borrower or Material Subsidiary or
any substantial part of its assets,
otherwise than in connection with a liquidation, amalgamation or
reconstruction:
-34-
<PAGE> 35
(a) of a Material Subsidiary on a solvent basis; or
(b) upon terms consented to by the Bank (such consent not to be
unreasonably withheld).
RECEIVERS
18.9 An administrative or other receiver or manager is appointed in respect of
any Borrower or Material Subsidiary or any substantial part of its assets.
18.10 Any Borrower or Material Subsidiary requests any person to appoint such a
receiver or manager.
CREDITORS' PROCESS
18.11 Any attachment, sequestration, distress or execution affects any
substantial part of any asset of any Borrower or Material Subsidiary (and
the aggregate total amount of all claims exceeds Pound Sterling 1,000,000)
and is not discharged within 30 days.
ANALOGOUS PROCEEDINGS
18.12 There occurs, in relation to any Borrower or Material Subsidiary, any
event anywhere which, in the opinion of the Bank, appears to correspond
with any of those mentioned in Clauses 18.6 to 18.11 (inclusive) in
particular without limitation:
18.12.1 any Borrower or Material Subsidiary, which is a United States
Subsidiary commences a voluntary case under the United States
Federal Bankruptcy Laws, as now or hereafter constituted, or any
other applicable United States federal or state bankruptcy,
insolvency or other similar law; or
18.12.2 a decree or order for relief is entered by a court having
jurisdiction in the premises in respect of any such Borrower or
Material Subsidiary in an involuntary case under the United
States federal bankruptcy laws, as now or hereafter constituted,
or any other applicable United States federal or state
bankruptcy, insolvency or other similar law and such decree or
order shall continue unstayed and in effect for a period of 60
consecutive days.
CESSATION OF BUSINESS
18.13 Any Borrower or Material Subsidiary (other than as a result of a voluntary
liquidation, amalgamation or reconstruction consented to by the Bank under
Clause 18.8) ceases, or threatens to cease, to carry on all, or
substantially all, of its business.
ACCELERATION
18.14 On and at any time after the occurrence of an Event of Default the Bank
may by written notice to the Company:
-35-
<PAGE> 36
18.14.1 cancel the Commitment; and/or
18.14.2 declare that each Borrower's obligations under Clause 8.1 (Payment
of Bills) in respect of all outstanding Bills are immediately due
and payable whereupon they shall become immediately due and
payable; and/or
18.14.3 demand that all the Advances, together with accrued interest, and
all other amounts accrued under this Agreement, be immediately due
and payable, whereupon they shall become immediately due and
payable; and/or
18.14.4 demand that all the Advances be payable on demand, whereupon they
shall immediately become payable on demand together with all other
amounts accrued under this Agreement.
19. FEES
ARRANGEMENT FEE
19.1 The Company shall pay to the Bank an arrangement fee of Pound Sterling
*. The arrangement fee is payable within 30 days of the Signing Date
or (if earlier) the date of the first Utilisation.
COMMITMENT FEE
19.2 The Company shall pay to the Bank a commitment fee of *% on the average
daily amount of the unutilised Commitment during each period in respect of
which such fee is to be determined.
19.3 The commitment fee shall accrue on a daily basis in respect of each six
month period with the first such period commencing on the Signing Date and
the last such period (adjusted as appropriate) ending on the Availability
Period End Date and shall be paid in arrear on the last day of each such
period. Accrued commitment fee is also payable to the Bank on the
cancelled amount of the Commitment at the time the cancellation takes
effect if the Commitment is cancelled in full.
VAT
19.4 Any fee referred to in this Clause is exclusive of any value added tax or
any other tax which might be chargeable in connection with that fee. If
any value added tax or other tax is so chargeable, it shall be paid by the
Company at the same time as it pays the relevant fee.
20. EXPENSES
INITIAL AND SPECIAL COSTS
20.1 The Company shall forthwith on demand pay the Bank the amount of all
reasonable costs and expenses incurred by it in connection with:
-36-
<PAGE> 37
20.1.1 the negotiation and execution of this Agreement and any other
documents referred to in this Agreement;
20.1.2 any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by the Company and
relating to this Agreement or a document referred to herein; and
20.1.3 any other matter, not of an ordinary administrative nature,
arising out of, or in connection with, this Agreement.
ENFORCEMENT COSTS
20.2 The Company shall, forthwith on demand, pay to the Bank the amount of all
reasonable costs and expenses:
20.2.1 incurred by it in connection with the enforcement of, or the
preservation of any rights under, this Agreement; or
20.2.2 arising after or in investigating any Event of Default or event
which it is reasonable to consider may become an Event of Default.
GENERAL
20.3 The costs and expenses referred to in this Clause:
20.3.1 include, without limitation, the fees and expenses of legal
advisers and any value added tax or similar tax; and
20.3.2 are payable in the currency in which they are incurred.
21. STAMP DUTIES
The Company shall pay and, forthwith on demand, indemnify the Bank against
any liability it incurs in respect of, any stamp, registration and similar
tax which is or becomes payable in connection with the entry into,
performance or enforcement of this Agreement.
22. INDEMNITIES AND COMPANY GUARANTEE
CURRENCY INDEMNITY
22.1 If the Bank receives an amount in respect of any Borrower's liability
under this Agreement or if such liability is converted into a claim,
proof, judgement or order in a currency other than the currency (the
"CONTRACTUAL CURRENCY") in which the amount is expressed to be payable
under this Agreement:
22.1.1 the relevant Borrower will indemnify the Bank as an independent
obligation against any loss arising out of or as a result of such
conversion;
-37-
<PAGE> 38
22.1.2 if the amount received by the Bank, when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is less
than the amount owed in the contractual currency, the relevant
Borrower shall, forthwith on demand, pay to the Bank an amount in
the contractual currency equal to the deficit;
22.1.3 the relevant Borrower will pay to the Bank on demand any exchange
costs and taxes payable in connection with any such conversion;
and
22.1.4 if the amount received by the Bank when converted into the
contractual currency, at the Bank's Spot Rate of Exchange is more
than the amount owed in the contractual currency the Bank shall
promptly account to the relevant Borrower an amount in the
contractual currency equal to the excess.
22.2 Each Borrower waives any right it may have in any jurisdiction to
pay any amount under this Agreement in a currency other than that
in which it is expressed to be payable.
OTHER INDEMNITIES
22.3 The Company shall, forthwith on demand, indemnify the Bank against any
liability or loss which the Bank incurs as a consequence of:
22.3.1 the occurrence of any Event of Default;
22.3.2 the operation of Clause 18.14 (Acceleration);
22.3.3 any payment of principal or an overdue amount being received from
any source otherwise than on its Maturity Date and, for the
purposes of this sub-Clause 22.3.3, the Maturity Date of an
overdue amount is the last day of each Designated Term (as
defined in Clause 7.3 (Default interest)); or
22.3.4 (other than by reason of negligence or default by the Bank) a
Utilisation not being effected after the relevant Borrower has
delivered a notice of Utilisation by telephone or a Request (save
where such notice or Request is expressly permitted to be
cancelled hereunder).
The Company's liability in each case includes, without limitation, any
loss of margin or other loss or expense on account of funds borrowed,
contracted for or utilised to fund any amount payable under this
Agreement, any amount repaid or prepaid or any Advance or Bill.
COMPANY GUARANTEE
22.4 The Company irrevocably and unconditionally:-
22.4.1 guarantees to the Bank the due and punctual observance and
performance of all the terms, conditions and covenants on the
part of each Borrower contained in this Agreement and agrees to
pay to the Bank from time to time on demand any and every sum or
sums of money which each Borrower shall at any time be liable
-38-
<PAGE> 39
to pay to the Bank under or pursuant to this Agreement and which
shall not have been paid at the time such demand is made; and
22.4.2 agrees as a primary obligation to indemnity the Bank from time to
time on demand by the Bank from and against any loss incurred by
the Bank as a result of any of the obligations of each Borrower
under or pursuant to this Agreement becoming void, voidable,
unenforceable or ineffective as against each such Borrower for
any reason whatsoever, whether or not known to the Bank, the
amount of such loss being the amount which the person or persons
suffering it would otherwise have been entitled to recover from
any Borrower.
PRESERVATION OF RIGHTS
22.5 The obligations of the Company contained in Clause 22.4 above (the
"Obligations") shall be in addition to and independent of every other
security which the Bank may at any time hold in respect of the obligations
of the Borrowers under this Agreement.
22.6 The Obligations shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular but without limitation, shall not be
considered satisfied by any intermediate payment or satisfaction of all or
any of the obligations of the Borrowers under this Agreement and shall
continue in full force and effect until final payment in full of all
amounts owing by the Borrowers thereunder and total satisfaction of all
actual and contingent obligations thereunder.
22.7 Neither the Obligations nor the rights, powers and remedies conferred in
respect of the Company in relation thereto upon the Bank by this Agreement
or by law shall be discharged, impaired or otherwise affected by:
22.7.1 the winding-up, dissolution, administration or re-organisation of
any Borrower or any other person or any change in its status,
function, control or ownership;
22.7.2 any of the obligations of any Borrower or any other person
hereunder or under any other security taken in respect of any of
its obligations hereunder being or becoming illegal, invalid,
unenforceable or ineffective in any respect;
22.7.3 time or other indulgence being granted or agreed to be granted to
any Borrower in respect of its obligations hereunder or under any
other security;
22.7.4 any amendment, supplement or modification to, or any waiver of or
release of any obligation of any Borrower hereunder or under any
such other security;
22.7.5 any failure to take, or fully to take, any security contemplated
hereby or otherwise agreed to be taken in respect of any
Borrower's obligations hereunder;
22.7.6 any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any security
taken in respect of any Borrower's obligations hereunder; or
-39-
<PAGE> 40
22.7.7 any other act, event or omission including, (without limitation,
any amendment to this Agreement) which, but for this Clause 22.7
might operate to discharge, impair or otherwise affect any of the
obligations of the Borrowers or the Company herein contained or
any of the rights, powers or remedies conferred upon the Bank by
this Agreement or by law.
22.8 Any settlement or discharge between the Company and the Bank shall be
conditional upon no security or payment to the Bank by any Borrower or any
other person being avoided or reduced by virtue of any provisions or
enactments relating to bankruptcy, insolvency, liquidation or similar laws
of general application for the time being in force and, if any such
security or payment is so avoided or reduced, the Bank shall be entitled
to recover the value or amount of such security or payment from the
Company subsequently as if such settlement or discharge had not occurred.
22.9 The Bank shall not be obliged before exercising any of the rights, powers
or remedies conferred upon them in respect of the Borrowers or the Company
by this Agreement or by law:
22.9.1 to make any demand of any other Borrower;
22.9.2 to take any action or obtain judgment in any court against any
other Borrower;
22.9.3 to make or file any claim or proof in a winding-up or dissolution
of any Borrower; or
22.9.4 to enforce or seek to enforce any other security taken in respect
of any of the obligations of any other Borrower hereunder.
22.10 The Company agrees that, so long as any amounts are or may be owed by any
Borrower hereunder or any Borrower is under any actual or contingent
obligations hereunder, it shall not exercise any rights which it may at
any time have by reason of performance by it of its obligations hereunder:
22.10.1 to be indemnified by any other Borrower; and/or
22.10.2 to claim any contribution from any other Borrower; and/or;
22.10.3 to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Bank hereunder or
of any other security taken pursuant to, or in connection with,
this Agreement by the Bank; and/or
22.10.4 to make or file any claim or proof in a winding-up or dissolution
of any other Borrower in connection with any rights arising by
reason of or in connection with the performance by it of its
obligations hereunder.
-40-
<PAGE> 41
23. EVIDENCE AND CALCULATIONS
ACCOUNTS
3.1 Accounts maintained by the Bank in connection with this Agreement are
prima facie evidence of the matters to which they relate.
CERTIFICATES AND DETERMINATIONS
23.2 Any certification or determination by the Bank of a rate or amount under
this Agreement is prima facie evidence of the matters to which it relates.
CALCULATIONS
23.3 Interest (including any applicable Mandatory Cost) and the fee payable
pursuant to Clause 19.2 (Commitment fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year of
365 days, or, in the case of interest payable on an amount denominated in
an Optional Currency, 360 days.
23.4 Acceptance commission and discounting in respect of a Bill is calculated
on the basis of the number of days in the Term of that Bill and a year of
365 days.
24. AMENDMENTS
No amendment to this Agreement or any provision hereof shall be effective
unless made in writing and executed by the Company on behalf of itself and
each of the other Borrowers and the Bank.
25. CHANGES TO THE PARTIES
25.1 Neither the Company nor any Borrower may assign, transfer, novate or
dispose of any of, or any interest in, its rights and/or obligations under
this Agreement without the consent of the Bank.
25.2 The Bank may not assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under this Agreement without
the prior written consent of the Company (such consent not to be
unreasonably withheld) provided that such consent shall not be required
where the assignee or transferee is an Affiliate of the Bank which is a
Qualifying Bank.
25.3 If the Bank proposes to enter into any kind of transfer, participation,
sub-participation or other agreement in relation to this Agreement it
shall notify the Company in advance of its intention and of the identity
of the proposed transferee, participant, sub-participant or other party to
such agreement and the amount of the proposed transfer, participation,
sub-participation, or other arrangement.
-41-
<PAGE> 42
26. DISCLOSURE OF INFORMATION
26.1 The Bank may disclose to any of its Affiliates or with the Company's prior
written consent (such consent not to be unreasonably withheld) any person
with whom it is proposing to enter, or has entered into, any kind of
transfer, participation, sub-participation or other agreement in relation
to this Agreement:
26.1.1 a copy of this Agreement; and
26.1.2 any information which the Bank has lawfully and properly acquired
under or in connection with this Agreement but only if that person
undertakes to keep that information confidential.
27. WAIVERS, REMEDIES CUMULATIVE
27.1 The rights of the Bank under this Agreement:
27.1.1 may be exercised as often as necessary;
27.1.2 are cumulative and not exclusive of its right under the general
law; and
27.1.3 may be waived only in writing and specifically.
27.2 Any delay by the Bank in exercise of any of its rights under this
Agreement or the non-exercise of any such rights is not a waiver of that
right or rights.
28. SET-OFF
28.1 The Bank may set off any matured obligation owed by any Borrower under
this Agreement against any obligations (whether or not matured) owed by
the Bank to such Borrower, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Bank may convert either obligation at the Bank's
Spot Rate of Exchange for the purpose of the set-off.
29. SEVERABILITY
29.1 If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
29.1.1 the legality, validity or enforceability in that jurisdiction of
any other provision of this Agreement; or
29.1.2 the legality, validity or enforceability in other jurisdictions of
that or any other provision of this Agreement.
-42-
<PAGE> 43
30. NOTICES
GIVING OF NOTICES
30.1 Save as otherwise provided herein, all notices under, or in connection
with, this Agreement shall be given in writing or by telex or facsimile.
Any such notice is deemed to be given as follows:
30.1.1 if in writing, when delivered;
30.1.2 if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and at
the end of the sender's copy of the notice; and
30.1.3 if by fax, when received.
However:
30.1.4 the Bank shall not be deemed to have received any Request which
shall only be effective when actually received by the Bank and
where a Request is by facsimile the Bank will give telephone
confirmation of such receipt as specified in the Request; and
30.1.5 a notice given in accordance with the above but received on a
non-working day or after business hours in the place of receipt is
deemed to be given on the next working day in that place.
ADDRESSES FOR NOTICES
30.2 The address, telex and facsimile number of each Party for all notices
under, or in connection with, this Agreement, is:
30.2.1 that notified by that Party for this purpose to the other Party;
or
30.2.2 any other notified by that Party for this purpose to the other by
not less than five Business Days' notice.
30.3 The address, telex and facsimile number:
30.3.1 of each Borrower is:
Caradon House
24 Queens Road,
Weybridge
Surrey, KT13 9UX
Attention: Mr David Marshall
Telex: 849599 MBHO G
Facsimile No: 01932 823328
-43-
<PAGE> 44
30.3.2 of the Bank is:
75 King William Street
London EC4N 7DT
Attention: Debbie Dyson
Facsimile No: 0171 410 8001
31. DESIGNATION OF ACCEDING AND SECEDING BORROWERS
31.1 The Company may request that any of its Subsidiaries incorporated in
England and Wales and, with the prior written consent of the Bank (such
consent not to be unreasonably withheld or delayed) any other Subsidiary
of the Company becomes an Acceding Borrower by delivering or procuring the
delivery to the Bank a Borrower's Accession Notice duly executed by the
Company and the relevant Subsidiary provided that if such Subsidiary is
not resident in the United Kingdom for tax purposes the Company and the
Bank agree to make such amendments to this Agreement as may be reasonably
required at the time in order to allow such Subsidiary to pay interest to
the Bank without deduction or withholding of any Relevant Tax and to
provide such Subsidiary with equivalent rights, mutatis mutandis, to those
contained in Clause 11.4 (Qualifying Bank).
31.2 Upon delivery of a Borrower's Accession Notice, the relevant Subsidiary
shall become an Acceding Borrower and shall, subject to the terms and
conditions of this Agreement acquire all the rights and assume all the
obligations of a Borrower hereunder provided that the Bank has confirmed
to the Company that it has received, in form and substance satisfactory to
it, all the documents set out in Part II of Schedule 1.
31.3 The Company undertakes that it shall procure that each Acceding Borrower
shall provide the Bank with each of the documents listed in Part II of
Schedule 1.
31.4 If at any time any Borrower (other than the Company) has no actual or
contingent obligations under this Agreement, the Company may deliver a
Borrower's Cessation Notice to the Bank in which event such Borrower shall
forthwith cease to be a Borrower upon receipt by the Bank of such notice.
32. CHANGE OF CURRENCY
32.1 If more than one currency or currency unit are at the same time recognised
by the central bank of any country as the lawful currency of that country,
then:
32.1.1 any reference in this Agreement to, and any obligations arising
under this Agreement in, the currency of that country shall be
translated into, or paid in, the currency unit of that country
designated by the Bank acting reasonably and in consultation with
the Company; and
-44-
<PAGE> 45
32.1.2 any translation from one currency unit to another shall be at the
official rate of exchange recognised by the relevant central bank
for the conversion of that currency or currency unit into the
other, rounded up or down by the Bank acting reasonably.
32.2 If a change in any currency of a country occurs, the Bank and the Company
will negotiate in good faith in order to agree any amendments to this
Agreement to reflect market practice at that time with regard to the
occurrence of EMU within the European Union or any part(s) of it and the
new currency and to put the Bank and the Borrowers in the same position,
so far as is possible, that they would have been in if no change in
currency had occurred.
32.3 The Bank and the Company agree that the occurrence or non-occurrence of
EMU within the European Union or part(s) of it and/or any event or events
associated with EMU and/or the introduction of any new currency in all or
any part of the European Union will not result in the discharge
cancellation, rescission or termination in whole or in part of this
Agreement or give any party hereto the right to cancel, rescind, terminate
or vary (other than as aforesaid) this Agreement in whole or in part or
give rise to an Event of Default.
33. COUNTERPARTS
33.1 This Agreement may be executed in any number of counterparts each of which
shall be an original and all of such counterparts taken together shall be
delivered to constitute one and the same instrument.
34. APPLICABLE LAW AND JURISDICTION
34.1 The law of England and Wales is the law applicable to this Agreement.
34.2 Each of the Borrowers 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 and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
34.3 Each of the Borrowers which is not incorporated in England and Wales
agrees that the process by which any suit, action or proceeding is begun
in England and Wales may be served on it by being delivered to the Company
at its registered office for the time being and hereby appoints the
Company (and the Company accepts such appointment) for such purposes. If
the appointment of the person mentioned in this Clause 34.3 ceases to be
effective in respect of any or all of the Borrowers such Borrower or
Borrowers shall immediately appoint a further person in England and Wales
to accept service of process on its behalf in England and Wales and,
failing such appointment within fifteen days, the Bank acting reasonably
shall be entitled to appoint such a person by notice to such Borrower or
Borrowers. Nothing contained herein shall affect the right to serve
process in any other manner permitted by law.
-45-
<PAGE> 46
34.4 Each of the Borrowers irrevocably waives any objection which it might now
or hereafter have to the courts referred to in Clause 34.2 being nominated
as the forum to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient
or appropriate forum.
34.5 The submission to the jurisdiction of the courts referred to in Clause
34.2 shall not (and shall not be construed so as to) limit the right of
the Bank to take proceedings against any of the Borrowers 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.
This Agreement has been entered into on the date stated at the beginning
of this Agreement.
-46-
<PAGE> 47
SIGNATORIES
CARADON plc
By: /s/David Marshall
David Marshall
Group Treasurer
/s/Martin Clark
Martin Clark
Group Finance Director
DEN DANSKE BANK LONDON BRANCH
By: /s/B. P. Newley
B. P. Newley
By: /s/C. R. Powell
C. R. Powell
-47-
<PAGE> 1
EXHIBIT (c)(1)
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
by and among
CARADON INC.,
E ACQCO INC.,
and
EASCO, INC.
dated as of
July 28, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I THE OFFER AND MERGER.......................................... 2
Section 1.1 The Offer..................................................... 2
Section 1.2 Company Actions............................................... 3
Section 1.3 Directors..................................................... 5
Section 1.4 The Merger.................................................... 6
Section 1.5 Effective Time................................................ 6
Section 1.6 Closing....................................................... 6
Section 1.7 Directors and Officers of the Surviving Corporation........... 7
Section 1.8 Effect of the Merger.......................................... 7
Section 1.9 Subsequent Actions............................................ 7
Section 1.10 Certificate of Incorporation; Bylaws.......................... 7
Section 1.11 Stockholders' Meeting......................................... 8
Section 1.12 Merger Without Meeting of Stockholders........................ 8
ARTICLE II CONVERSION OF SECURITIES...................................... 9
Section 2.1 Conversion of Securities...................................... 9
Section 2.2 Dissenting Shares............................................. 9
Section 2.3 Surrender of Shares; Stock Transfer Books.....................10
Section 2.4 Stock Plans...................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................13
Section 3.1 Organization..................................................13
Section 3.2 Capitalization................................................14
Section 3.3 Authorization; Validity of Agreement; Company Action..........15
Section 3.4 Consents and Approvals; No Violations.........................15
Section 3.5 SEC Reports and Financial Statements..........................16
Section 3.6 Absence of Certain Changes....................................17
Section 3.7 No Undisclosed Liabilities....................................17
Section 3.8 Information in Proxy Statement................................17
Section 3.9 Opinion of Financial Advisor..................................17
Section 3.10 Brokers or Finders............................................17
Section 3.11 Litigation....................................................18
Section 3.12 Compliance with Applicable Law................................18
Section 3.13 Taxes.........................................................18
Section 3.14 ERISA.........................................................19
Section 3.15 Environmental Matters.........................................20
Section 3.16 Labor Matters.................................................20
Section 3.17 Intellectual Property.........................................21
Section 3.18 Year 2000 Matters.............................................21
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.19 Customers and Suppliers.......................................22
Section 3.20 Title to and Condition of Assets..............................22
Section 3.21 Material Contracts............................................23
Section 3.22 No Other Representations or Warranties........................24
Section 3.23 Full Disclosure...............................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER.....................................................25
Section 4.1 Organization..................................................25
Section 4.2 Authorization; Validity of Agreement; Necessary Action........25
Section 4.3 Consents and Approvals; No Violations.........................25
Section 4.4 Information in Proxy Statement................................26
Section 4.5 Financing.....................................................26
Section 4.6 Brokers or Finders............................................26
Section 4.7 No Other Representations and Warranties.......................26
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER........................26
Section 5.1 Acquisition Proposals; No Solicitation........................26
Section 5.2 Interim Operations of the Company.............................27
ARTICLE VI ADDITIONAL AGREEMENTS.........................................31
Section 6.1 Proxy Statement...............................................31
Section 6.2 Meeting of Stockholders of the Company........................31
Section 6.3 Additional Agreements.........................................31
Section 6.4 Notification of Certain Matters...............................31
Section 6.5 Access; Confidentiality.......................................32
Section 6.6 Consents and Approvals........................................32
Section 6.7 Publicity.....................................................32
Section 6.8 Directors' and Officers' Insurance and Indemnification........33
Section 6.9 Purchaser Compliance..........................................34
Section 6.10 Reasonable Best Efforts.......................................34
Section 6.11 Employee Matters..............................................35
Section 6.12 Company Financial Statements and SEC Reports..................36
ARTICLE VII CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER........................................................36
Section 7.1 Stockholder Approval..........................................36
Section 7.2 Statutes; Court Orders........................................36
Section 7.3 Purchase of Shares in Offer...................................36
ARTICLE VIII TERMINATION...................................................37
Section 8.1 Termination...................................................37
Section 8.2 Effect of Termination.........................................38
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE IX MISCELLANEOUS.................................................39
Section 9.1 Amendment and Modification; Waiver............................39
Section 9.2 Non-survival of Representations and Warranties................39
Section 9.3 Expenses......................................................39
Section 9.4 Notices.......................................................39
Section 9.5 Interpretation................................................41
Section 9.6 Counterparts..................................................41
Section 9.7 Entire Agreement; No Third Party Beneficiaries................41
Section 9.8 Severability..................................................41
Section 9.9 Governing Law.................................................42
Section 9.10 Assignment....................................................42
Section 9.11 Enforcement of this Agreement.................................42
Annex A Conditions to the Offer
Exhibit A Certificate of Incorporation of Surviving Corporation
Exhibit B-1 Form of Stockholder Agreement (American Industrial Partners)
Exhibit B-2 Form of Stockholder Agreement (directors and officers)
</TABLE>
iii
<PAGE> 5
Index of Defined Terms
<TABLE>
<CAPTION>
Defined Term Page
- ------------- ----
<S> <C>
Agreement................................................................... 1
Appointment Date............................................................ 5
Average Premium.............................................................34
Board of Directors.......................................................... 1
Certificates................................................................10
Closing..................................................................... 6
Closing Date................................................................ 6
Common Stock................................................................ 1
Company..................................................................... 1
Company Agreements..........................................................16
Company Disclosure Schedule.................................................13
Company Intellectual Property...............................................21
Company Material Adverse Effect.............................................13
Company Multiemployer Plan..................................................19
Company Plan................................................................19
Company Real Property.......................................................22
Company SEC Documents.......................................................16
Company Permits.............................................................18
D&O Insurance...............................................................34
Delaware Law................................................................ 1
Dissenting Shares........................................................... 9
ERISA ......................................................................19
Effective Time.............................................................. 6
Environmental Laws..........................................................20
Exchange Act................................................................ 2
Exchange Agent..............................................................10
Financial Statements........................................................16
GAAP .......................................................................16
Governmental Entity.........................................................16
Hazardous Substances........................................................20
HSR Act.....................................................................15
Indebtedness................................................................15
Indemnified Parties.........................................................33
Independent Directors....................................................... 6
Major Customer..............................................................22
Major Supplier..............................................................22
Merger...................................................................... 6
Merger Consideration........................................................ 9
Millennium Compliant........................................................21
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
Minimum Condition........................................................... 2
Offer to Purchase........................................................... 2
Offer Documents............................................................. 3
Offer....................................................................... 1
Offer Price................................................................. 1
Option......................................................................12
Parent...................................................................... 1
Person......................................................................41
Plans.......................................................................29
Preferred Stock.............................................................14
Proxy Statement............................................................. 8
Purchaser................................................................... 1
Recent Balance Sheet........................................................17
Restricted Share............................................................12
Schedule 14D-9.............................................................. 4
Schedule 14D-1.............................................................. 3
SEC......................................................................... 2
Secretary of State.......................................................... 6
Securities Act..............................................................16
Shares...................................................................... 1
Special Meeting............................................................. 8
Stock Plans.................................................................12
Stockholder Agreement....................................................... 1
Subsidiary..................................................................13
Superior Proposal...........................................................38
Surviving Corporation....................................................... 6
Takeover Proposal...........................................................27
Tax.........................................................................18
Termination Fee.............................................................39
Transactions................................................................ 3
Transactions................................................................ 4
</TABLE>
v
<PAGE> 7
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 28,
1999, by and among Caradon Inc., a Delaware corporation ("Parent"), E Acqco
Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent
("Purchaser"), and Easco, Inc., a Delaware corporation (the "Company").
WHEREAS, each of the boards of directors of Parent, Purchaser and the
Company has approved, and deems it advisable and in the best interests of its
respective stockholders to consummate, the acquisition of the Company by Parent
upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser will
make a tender offer (the "Offer") to acquire any and all shares (the "Shares")
of the issued and outstanding common stock, $.01 par value (the "Common Stock"),
of the Company for $15.20 per Share, net to the seller in cash (such amount, or
any higher price per Share as may be paid in the Offer, the "Offer Price");
WHEREAS, in furtherance of such acquisition, the boards of directors of
the Company, Parent and Purchaser each have approved the Merger (as defined
herein) following the Offer in accordance with the General Corporation Law of
the State of Delaware ("Delaware Law") and upon the terms and subject to the
condition set forth herein;
WHEREAS, the board of directors of the Company (the "Board of
Directors") has determined that the consideration to be paid for each Share in
the Offer and the Merger and the transactions contemplated thereby are fair to
the holders of such Shares and has recommended to the Board of Directors that it
approve and adopt this Agreement and the transactions contemplated hereby and
recommend that the holders of such Shares accept the Offer and approve and adopt
this Agreement and each of the transactions contemplated hereby upon the terms
and subject to the conditions set forth herein, and the Board of Directors has
unanimously so resolved to recommend;
WHEREAS, as a condition to Parent's willingness to enter into this
Agreement, Parent and certain stockholders of the Company, which beneficially
own approximately 46% of the outstanding Shares, are simultaneously entering
into stockholder agreements, dated the date hereof, pursuant to which such
stockholders have irrevocably agreed, among other things, to tender all of the
Shares owned by them in the Offer (the "Stockholder Agreement"); and
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and Merger.
<PAGE> 8
NOW, THEREFORE, in consideration of the foregoing and the mutual
representation, warranties, covenants and agreements set forth herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 and none of the events set forth in
Annex A shall have occurred and are existing, as promptly as practicable (but in
no event later than five business days after the public announcement of the
execution of this Agreement), Purchaser shall commence (within the meaning of
Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) the Offer at the Offer Price and, subject to there being validly tendered
and not properly withdrawn prior to the expiration of the Offer that number of
Shares which represents at least a majority of the Shares then outstanding on a
fully diluted basis (the "Minimum Condition") and to the other conditions set
forth in Annex A hereto, shall use all reasonable efforts to consummate the
Offer in accordance with its terms as soon as legally permitted to do so under
applicable law. The obligations of Purchaser to accept for payment and to pay
for any Shares validly tendered and not withdrawn on or prior to the expiration
of the Offer shall be subject only to the Minimum Condition and the other
conditions set forth in Annex A. The Offer shall be made by means of an Offer to
Purchase (the "Offer to Purchase") containing the terms set forth in this
Agreement and shall be subject to the Minimum Condition and the other conditions
set forth in Annex A. Purchaser shall not (i) amend or waive the Minimum
Condition (ii) decrease the Offer Price or change the form of consideration
payable in the Offer (iii) decrease the number of Shares sought or (iv) amend
any other condition of the Offer in any manner adverse to the holders of the
Shares, in each case, without the written consent of the Company; provided, that
if on the initial scheduled expiration date of the Offer, which shall be twenty
(20) business days after the date the Offer is commenced, all conditions to the
Offer shall not have been satisfied or waived, Purchaser may, from time to time,
in its sole discretion, extend the expiration date. Purchaser shall, on the
terms and subject to the prior satisfaction or waiver of the conditions of the
Offer and as promptly as practicable after the expiration of the Offer, accept
for payment and pay for Shares tendered, provided, that if, immediately prior to
the initial expiration date of the Offer (as it may be extended), the number of
the Shares tendered and not withdrawn pursuant to the Offer equals less than 90%
of the outstanding Shares, Purchaser may extend the Offer for a period not to
exceed ten (10) business days, notwithstanding that all conditions to the Offer
are satisfied as of such expiration date of the Offer.
(b) As soon as practicable on the date the Offer is
commenced, Parent and Purchaser shall file with the United States Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer (together with all
2
<PAGE> 9
amendments and supplements thereto and including the exhibits thereto, the
"Schedule 14D-1"). The Schedule 14D-1 will include, as exhibits, the Offer to
Purchase and a form of letter of transmittal and summary advertisement (which
documents, together with any amendments and supplements thereto, and any other
SEC schedule or form which is filed in connection with the Offer and related
transactions, are referred to collectively herein as the "Offer Documents"). The
Offer Documents will comply in all material respects with the provisions of
applicable federal securities laws and Delaware Law and, on the date filed with
the SEC and on the date first published, mailed or given to the Company's
stockholders, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
Purchaser with respect to information furnished by the Company to Parent or
Purchaser, in writing, expressly for inclusion in the Offer Documents. The
information supplied by the Company to Parent or Purchaser, in writing,
expressly for inclusion in the Offer Documents and by Parent or Purchaser to the
Company, in writing, expressly for inclusion in the Schedule 14D-9 will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) Parent and Purchaser will take all steps necessary to
cause the Offer Documents to be filed with the SEC and to be disseminated to
holders of the Shares, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and Purchaser and the Company agrees to
promptly (i) correct any information provided by it for use in the Schedule
14D-1 or the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect and (ii) supplement the
information provided by it specifically for use in the Schedule 14D-1 or the
Offer Documents to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Parent and Purchaser further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given the reasonable opportunity to review the Schedule 14D-1
before it is filed with the SEC. In addition, Parent and Purchaser will provide
the Company and its counsel, in writing, with any comments, whether written or
oral, Parent, Purchaser or their counsel may receive from time to time from the
SEC or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer
and represents and warrants that (x) the Board of Directors, at a meeting duly
called and held on July 27, 1999, at which a majority of the directors was
present: (i) duly approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (collectively, the
"Transactions"); (ii) resolved to recommend that the stockholders of the
3
<PAGE> 10
Company accept the Offer, tender their Shares pursuant to the Offer and approve
and adopt this Agreement and the Transactions; and (iii) determined that this
Agreement and the Transactions are fair to, and in the best interests of, the
stockholders of the Company and (y) Wasserstein Perella & Co., Inc. has rendered
to the Board of Directors its opinion that the consideration to be received by
the Company's stockholders pursuant to the Offer and the Merger is fair to such
holders from a financial point of view.
(b) As soon as practicable on the date the Offer is commenced, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any and all amendments or supplements thereto and
including the exhibits thereto, the "Schedule 14D-9"). The Schedule 14D-9 will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, mailed or given to the Company's stockholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to information
furnished by Parent or Purchaser, in writing, expressly for inclusion in the
Schedule 14D-9. The Company further agrees to take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. The Company shall mail, or cause to be mailed, such Schedule
14D-9 to the stockholders of the Company at the same time the Offer Documents
are first mailed to the stockholders of the Company together with such Offer
Documents. The Schedule 14D-9 and the Offer Documents will contain the
recommendations of the Board of Directors described in Section 1.2(a), subject
to the terms of this Agreement. The Company will promptly correct the Schedule
14D-9 if and to the extent that it shall have become false or misleading in any
material respect (and each of Parent and Purchaser, with respect to written
information supplied by it specifically for use in the Schedule 14D-9, shall
promptly notify the Company of any required corrections of such information and
cooperate with the Company with respect to correcting such information) and to
supplement the information contained in the Schedule 14D-9 to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. Purchaser and its counsel shall be given the opportunity to
review the Schedule 14D-9 before it is filed with the SEC. In addition, the
Company agrees to provide Purchaser and its counsel, in writing, with any
comments, whether written or oral, that the Company or its counsel may receive
from time to time from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments or other communications.
(c) In connection with the Offer, the Company will promptly
furnish or cause to be furnished or transmitted to Purchaser mailing labels and
any available listing or computer file, as Purchaser or its representative
requests, containing the names and addresses of
4
<PAGE> 11
all record holders of Shares and security position listings of Shares held in
stock depositories, each as of a recent date, and shall promptly furnish
Purchaser with such additional information (including updated lists of
stockholders (updated as frequently as possible) and their addresses, mailing
labels and security position listing, each in such electronic format as may be
reasonably requested by Purchaser or its representative) and such other
information and assistance as Purchaser or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of the Shares.
Section 1.3 Directors.
(a) Subject to compliance with applicable law, promptly upon
the purchase of any Shares by Purchaser pursuant to the Offer, and from time to
time thereafter as Shares are acquired by Purchaser, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors as is equal to the product of the total number of directors
on the Board of Directors (giving effect to the directors designated by Parent
pursuant to this sentence) multiplied by the percentage that the number of
Shares beneficially owned by Purchaser or any affiliate of Purchaser bears to
the total number of Shares then outstanding. In furtherance thereof, the Board
of Directors has resolved as part of its approval of this Agreement to promptly
increase the size of the Board of Directors to a number not in excess of ten
upon the request of Parent or secure the resignations of such number of
directors as is necessary to enable Parent's designees to be elected to the
Board of Directors in accordance with the terms of this Section 1.3, and upon
the request of Parent, the Company shall promptly increase the size of the Board
of Directors, or secure the resignations of such number of directors, as is
necessary to enable Parent's designees to be elected to the Board of Directors
in accordance with the terms of this Section 1.3, and shall take all actions
available to the Company to cause Parent's designees to be so elected (the date
Parent's designees are elected to the Board of Directors being referred to as
the "Appointment Date"). At such time, the Company shall, if requested by
Parent, take all actions available to it to cause persons designated by Parent
to constitute at least the same percentage (rounded up to the next whole number)
as is on the Board of Directors of (i) each committee of the Board of Directors,
(ii) each board of directors (or similar body) of each Subsidiary of the Company
and (iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under Section 1.3(a), and shall
include in the Schedule 14D-9 mailed to stockholders with the Offer Documents
promptly after the commencement of the Offer (or an amendment thereof or an
information statement pursuant to Rule 14f-1 if Purchaser has not theretofore
designated directors) such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 in
order to enable Parent's designees to be elected or appointed to the Board of
Directors immediately after the purchase of and payment for any Shares by
Purchaser. Parent or Purchaser shall supply the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and
5
<PAGE> 12
affiliates required by such Section 14(f) and Rule 14f-1. The provisions of this
Section 1.3(b) are in addition to and shall not limit any rights which
Purchaser, Parent or any of their respective affiliates may have as a holder or
beneficial owner of Shares as a matter of law with respect to the election of
directors or otherwise.
(c) If Parent's designees are elected or appointed to the
Board of Directors, subject to the other terms of this Agreement until the
Effective Time, the Board of Directors shall have at least one director who is a
director on the date hereof and who is neither an officer of the Company nor a
designee, stockholder, affiliate or associate (within the meaning of the federal
securities laws) of Parent (one or more of such directors, the "Independent
Directors"), provided that, if no Independent Directors remain, the other
directors shall designate one person to fill one of the vacancies who shall not
be either an officer of the Company or a designee, shareholder, affiliate or
associate of Parent and such person will be deemed to be an Independent Director
for purposes of this Agreement. Notwithstanding anything in this Agreement to
the contrary, if Parent's designees are elected to the Company's Board of
Directors, after the acceptance for payment of Shares pursuant to the Offer and
prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (i) amend or terminate this Agreement
on behalf of the Company, (ii) exercise or waive any of the Company's rights,
benefits or remedies hereunder, if such exercise or waiver materially and
adversely affects holders of Shares other than Parent or Purchaser, (iii) extend
the time for performance of Purchaser's obligations hereunder or (iv) take any
other action by the Company under or in connection with this Agreement required
to be taken by the Board of Directors, if such action materially and adversely
affects holders of Shares other than Parent or Purchaser.
Section 1.4 The Merger. Upon the terms and subject to the conditions
of this Agreement and Delaware Law, at the Effective Time, Purchaser will be
merged with and into the Company (the "Merger"), the separate corporate
existence of Purchaser will cease, and the Company will continue as the
surviving corporation. The Company as the surviving corporation after the Merger
hereinafter sometimes is referred to as the "Surviving Corporation."
Section 1.5 Effective Time. The parties hereto shall cause a
Certificate of Merger to be executed and filed on the Closing Date (or on such
other date as Parent and the Company may agree) with the Secretary of State of
the State of Delaware (the "Secretary of State") in such form as required by,
and executed in accordance with, the relevant provisions of the Delaware Law.
The Merger will become effective on the date on which the Certificate of Merger
is duly filed with the Secretary of State or such time as is agreed upon by the
parties and specified in the Certificate of Merger, and such time is hereinafter
referred to as the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or waiver of all of
the conditions set forth in Article VII hereof (the "Closing Date"), at the
offices of Warner, Norcross & Judd LLP, 900 Old Kent Building, 111
6
<PAGE> 13
Lyon Street, N.W., Grand Rapids, Michigan 49503, unless another date or place is
agreed to in writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors of Purchaser immediately before the Effective Time will be the initial
directors of the Surviving Corporation, and the officers of the Company
immediately before the Effective Time will be the initial officers of the
Surviving Corporation, in each case until their successors are duty elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Certificate of Incorporation and the Bylaws of the Surviving
Corporation. If, at the Effective Time, a vacancy exists on the Board of
Directors or in any office of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by law.
Section 1.8 Effect of the Merger. At the Effective Time, the effect of
the Merger will be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Purchaser will vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Purchaser will become the debts,
liabilities and duties of the Surviving Corporation.
Section 1.9 Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Purchaser acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Purchaser, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.
Section 1.10 Certificate of Incorporation; Bylaws.
(a) At the Effective Time the Certificate of Incorporation of
the Company, as in effect immediately before the Effective Time, will be the
Certificate of Incorporation of the Surviving Corporation and will be amended to
read in its entirety as set forth in Exhibit A hereto until thereafter amended
as provided by law and such Certificate of Incorporation.
(b) At the Effective Time the Bylaws of Purchaser, as in
effect immediately before the Effective Time, will be the Bylaws of the
Surviving Corporation until
7
<PAGE> 14
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-Laws.
Section 1.11 Stockholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as promptly as
practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the approval of the Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
or information statement relating to the Merger and this Agreement and use its
reasonable best efforts, subject to the terms of this Agreement, (x) to obtain
and furnish the information required to be included by the SEC in the Proxy
Statement and, after consultation with Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement, including any
amendment or supplement thereto (the "Proxy Statement") to be mailed to its
stockholders, provided that no amendment or supplement to the Proxy Statement
will be made by the Company without consultation with Parent and its counsel and
(y) to obtain the necessary approvals of the Merger and this Agreement by its
stockholders, and
(iii) subject to the terms of this Agreement, include in
the Proxy Statement the recommendation of the Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger and the
adoption of this Agreement.
(b) Parent shall vote, or cause to be voted, all of the
Shares then owned by it, Purchaser or any of its other Subsidiaries and
affiliates in favor of the approval of the Merger and the approval and adoption
of this Agreement.
Section 1.12 Merger Without Meeting of Stockholders. Notwithstanding
Section 1.11 hereof, if Parent, Purchaser and any other Subsidiaries of Parent
shall acquire in the aggregate at least 90% of the outstanding Shares, pursuant
to the Offer or otherwise, the parties hereto shall, at the request of Parent
and subject to Article VII, take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with Section 253
of Delaware Law.
8
<PAGE> 15
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Purchaser, the
Company or the holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the
Effective Time (other than any Shares to be cancelled pursuant to Section 2.1(b)
and any Dissenting Shares) will be cancelled and extinguished and be converted
into the right to receive the Offer Price payable to the holder thereof, without
interest (the "Merger Consideration"), upon surrender of the certificate
formerly representing such Share in the manner provided in Section 2.3. All such
Shares, when so converted, will no longer be outstanding and will be canceled
automatically, retired and cease to exist. Each holder of a certificate
representing any such Shares will cease to have any rights with respect thereto,
except the right to receive the Merger Consideration therefor upon the surrender
of such certificate in accordance with Section 2.3, without interest.
(b) Each Share held in the treasury of the Company and each
Share owned by Parent or any direct or indirect wholly owned subsidiary of
Parent immediately before the Effective Time will be cancelled and extinguished,
and no payment or other consideration will be made with respect thereto.
(c) Each share of common stock, no par value, of Purchaser
issued and outstanding immediately before the Effective Time will thereafter
represent one validly issued, fully paid and nonassessable share of common
stock, no par value, of the Surviving Corporation.
Section 2.2 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any Shares held by a holder who has demanded and perfected his demand
for appraisal of his Shares in accordance with Delaware Law (including but not
limited to Section 262 thereof) and as of the Effective Time has neither
effectively withdrawn nor lost his right to such appraisal ("Dissenting
Shares"), will not be converted into or represent a right to receive cash
pursuant to Section 2.1, but the holder thereof will be entitled to only such
rights as are granted by Delaware Law.
(b) Notwithstanding the provisions of Section 2.2(a), if any
holder of Shares who demands appraisal of his Shares under Delaware Law
effectively withdraws or loses (through failure to perfect or otherwise) his
right to appraisal, then as of the Effective Time or the occurrence of such
event, whichever later occurs, such holder's Shares will automatically be
converted into and represent only the right to receive the Merger Consideration
as provided in
9
<PAGE> 16
Section 2.1(a), without interest thereon, upon surrender of the certificate or
certificates representing such Shares pursuant to Section 2.3.
(c) The Company shall give Purchaser prompt notice of any
written demands for appraisal or payment of the fair value of any Shares,
withdrawals of such demands, and any other instruments served pursuant to
Delaware Law received by the Company. The Company shall not voluntarily make any
payment with respect to any demands for appraisal and shall not, except with the
prior written consent of Purchaser, settle or offer to settle any such demands.
Section 2.3 Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, Purchaser shall designate the
Company's transfer agent or another bank or trust company reasonably acceptable
to the Company to act as agent for the holders of Shares in connection with the
Merger (the "Exchange Agent") to receive the funds necessary to make the
payments contemplated by Section 2.1(a). At the Effective Time, Purchaser shall
deposit, or cause to be deposited, in trust with the Exchange Agent for the
benefit of holders of Shares the aggregate consideration to which such holders
shall be entitled at the Effective Time pursuant to Section 2.1(a).
(b) Each holder of a certificate or certificates representing
any Shares cancelled upon the Merger, which immediately prior to the Effective
Time represented outstanding Shares (the "Certificates"), and whose Shares were
converted pursuant to Section 2.1(a), may thereafter surrender such Certificate
or Certificates to the Exchange Agent, as agent for such holder, to effect the
surrender of such Certificate at Certificates on such holder's behalf for a
period ending 180 days after the Effective Time. Purchaser agrees that promptly
after the Effective Time it will cause the distribution to holders of record of
Shares as of the Effective Time of appropriate materials to facilitate such
surrender, including (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent and shall be
in a form and have such other provisions as Parent may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. Upon the surrender of Certificates,
together with a letter of transmittal duly executed and such other documents as
may be reasonably required by the Exchange Agent, Purchaser shall cause the
Exchange Agent to pay the holder of such certificates in exchange therefor cash
in an amount equal to the Merger Consideration multiplied by the number of
Shares represented by such Certificate. Until so surrendered, each Certificate
(other than Certificates representing Dissenting Shares and Certificates
representing Shares held by Purchaser or in the treasury of the Company) will
represent solely the right to receive the aggregate Merger Consideration
relating thereto.
(c) If payment of the Merger Consideration in respect of
cancelled Shares is to be made to a Person other than the Person in whose name a
surrendered Certificate or instrument is registered, it will be a condition to
such payment that the Certificate or instrument
10
<PAGE> 17
so surrendered will be properly endorsed with signatures guaranteed and
otherwise be in proper form for transfer and that the Person requesting such
payment shall have paid any transfer and other taxes required by reason of such
payment in a name other than that of the registered holder of the Certificate or
instrument surrendered or shall have established to the satisfaction of
Purchaser or the Exchange Agent that such tax either has been paid or is not
applicable.
(d) At the Effective Time, the stock transfer books of the Company
will be closed and there will not be any further registration of transfers of
shares of any shares of capital stock thereafter on the records of the Company.
From and after the Effective Time, the holders of certificates evidencing
ownership of the Shares outstanding immediately prior to the Effective Time will
cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they will be cancelled
and exchanged for cash as provided in this Article II. No interest will accrue
or be paid on any cash payable upon the surrender of a Certificate or
Certificates which immediately before the Effective Time represented outstanding
Shares.
(e) Promptly following the date which is 180 days after the
Effective Time, the Surviving Corporation will be entitled to require the
Exchange Agent to deliver to it any cash (including any interest received with
respect thereto), Certificates and other documents in its possession relating to
the Transactions, which had been made available to the Exchange Agent and which
have not been disbursed to holders of Certificates, and thereafter such holders
will be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or similar laws) only as general creditors thereof with
respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing
neither the Surviving Corporation nor the Exchange Agent will be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) The Merger Consideration paid in the Merger will be net to the
holder of Shares in cash, subject to reduction only for any applicable federal,
state, local or foreign tax withholding or, as set forth in Section 2.3(c),
stock transfer taxes payable by such holder. To the extent that amounts are so
deducted and withheld by Parent or the Exchange Agent, (i) such amounts shall be
paid over to the applicable tax authority in a commercially reasonable manner
and time and (ii) such amounts shall be treated for purposes of this Agreement
as having been paid to the holder of the Shares in respect of which such
deduction and withholding was made.
(g) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit, reasonably satisfactory in form and
content to Parent, of that fact by the person claiming such Certificate to be
lost, stolen or destroyed and, if required by Parent, the posting by such person
of a bond in such reasonable amount as Parent may direct as indemnity against
any claim that may be made with respect to such Certificate, the Exchange
11
<PAGE> 18
Agent or the Surviving Corporation shall issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration to which such person is
entitled under this Article II.
Section 2.4 Stock Plans.
(a) As soon as practicable following the date of this
Agreement, the Board of Directors (or, if appropriate, any committee
administering the Easco, Inc. Stock Option Plan dated December 17, 1993, as
amended effective November 24, 1996, and any other stock-based incentive plan or
arrangement of the Company (collectively, the "Stock Plans")) shall adopt such
resolutions or take such other actions as are required to provide for the
cancellation of all outstanding options to purchase Shares issued under the
Stock Plans (the "Options") upon the Effective Time (including but not limited
to the approval of such cancellation in accordance with the terms and conditions
set forth in that certain No-Action Letter, dated January 12, 1999, issued by
the SEC to Skadden, Arps, Slate, Meagher & Flom LLP for the purpose of ensuring
that such cancellation shall be exempt under Rule 16b-3 promulgated under the
Exchange Act), in exchange for a cash payment of an amount equal the product of
(x) the excess, if any, of the Offer Price over the per share exercise price
thereof and (y) the number of Shares subject to such Options for which such
Option shall not theretofore have been exercised, whether or not then vested and
exercisable.
(b) Each outstanding unvested restricted Share issued pursuant
to a Stock Plan (each, a "Restricted Share") shall, immediately prior to the
Effective Time, be canceled and be converted into, and become the right to
receive, the Offer Price which shall be payable in accordance with Section 2.1.
(c) All amounts payable pursuant to this Section 2.4 shall be
subject to any required withholding of taxes and shall be paid without interest.
(d) The Board of Directors (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such actions
as are required to terminate the Stock Plans as of the Effective Time, to delete
as of the Effective Time the provision in any other benefit plan of the Company
providing for the issuance, transfer or grant of capital stock of the Company or
any interest in respect of capital stock of the Company and to ensure that
following the Effective Time, no holder of Options or any participant in any
Stock Plan or other Company benefit plan shall have any right thereunder to
acquire capital stock of the Company or the Surviving Corporation.
12
<PAGE> 19
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed on the Company Disclosure Schedule (which shall
include a specific reference to the Section of this Agreement to which such
disclosure relates, with no disclosure to be deemed to apply to any other
Section of this Agreement to which it would not be readily apparent to a
reasonable person that such disclosure applies), the Company represents and
warrants to Parent and Purchaser as follows:
Section 3.1 Organization. (a) Each of the Company and its Subsidiaries
is a corporation, partnership or other entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as now being conducted, except where the failure to
be so organized, existing and in good standing or to have such power, authority,
and governmental approvals would not, individually or in the aggregate, have a
Company Material Adverse Effect. As used in this Agreement, "Subsidiary" means,
with respect to any party, any foreign or domestic corporation or other
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding such
partnerships where such party or any Subsidiary of such party do not have a
majority of the voting interest in such partnership) or (ii) at least a majority
of the securities or other interests having by their terms ordinary voting power
to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries. As used in
this Agreement, "Company Material Adverse Effect" means any change in or effect
on the business of the Company or its Subsidiaries, taken as a whole, that could
reasonably be expected to be, individually or in the aggregate with any other
change or effect, materially adverse to (i) the business, operations, properties
(including intangible properties), condition (financial or otherwise), results
of operations, assets or liabilities of the Company or its subsidiaries, taken
as a whole, (other than any change or effect generally applicable to the
industry in which the Company and its Subsidiaries operate or changes in general
economic conditions) or (ii) the ability of the Company to consummate any of the
Transactions or to perform its obligations under this Agreement. The Disclosure
Schedule delivered to Parent prior to the execution of this Agreement (the
"Company Disclosure Schedule"), sets forth a complete list of the Company's
Subsidiaries.
(b) The Company and each of its Subsidiaries is duly qualified
or licensed to do business and in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
individually or in the aggregate have a Company Material Adverse Effect. The
Company does not own any equity interest in any corporation or other entity.
13
<PAGE> 20
(c) The Company has delivered to Parent complete and correct
copies of its Certificate of Incorporation and Bylaws and the Certificate of
Incorporation and Bylaws (or similar organizational documents) of each of its
Subsidiaries, in each case as amended to the date of this Agreement.
Section 3.2 Capitalization. (a) The authorized capital stock of the
Company consists of 40,000,000 shares of Common Stock and 1,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock" ). As of the
close of business on July 27, 1999, (i) 9,673,224 Shares are issued and
outstanding, (ii) no shares of Preferred Stock are issued and outstanding, (iii)
1,027,798 Shares are issued and held in the treasury of the Company, and (iv) a
total of 836,475 Shares are issuable pursuant to outstanding Options. Section
3.2(a) of the Company Disclosure Schedule discloses (i) the number of shares
subject to each outstanding Option and the exercise price thereof and (ii) the
number of non-vested Restricted Shares. All the outstanding shares of the
Company's capital stock are, and all Shares which may be issued pursuant to the
exercise of outstanding Options will be, when issued in accordance with the
terms thereof, duly authorized, validly issued, fully paid and non-assessable
and free of preemptive rights with respect thereto. Except as set forth above,
there are no (i) shares of capital stock of the Company authorized, issued or
outstanding, (ii) existing options, warrants, calls, preemptive rights,
subscription or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company or
any of its Subsidiaries, obligating the Company or any of its Subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or other equity interest in the Company or any of its Subsidiaries
or securities convertible into or exchangeable for such share or equity
interests, or obligating the Company or any of its Subsidiaries to grant extend
or enter into any such option, warrant, call, subscription or other right,
agreement, arrangement or commitment and (iii) outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire or dispose of any Shares, or the capital stock of the Company
or of any Subsidiary or affiliate of the Company or to provide funds to make any
investment (in the form of a loan, capital contribution or otherwise) in any
Subsidiary or any other entity.
(b) All of the outstanding shares of capital stock of each of
the Subsidiaries are beneficially owned by the Company, directly or indirectly,
and all such shares have been validly issued and are fully paid and
nonassessable and are owned by either the Company or one of its Subsidiaries
free and clear of all liens, charges, security interests, options, claims,
mortgages, pledges, or other encumbrances and restrictions of any nature
whatsoever.
(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of the
Subsidiaries.
(d) There is no outstanding Indebtedness of the Company or any
of its Subsidiaries. No Indebtedness of the Company or its Subsidiaries contains
any restriction upon (i) the prepayment of such Indebtedness, (ii) the
incurrence of Indebtedness by the Company or its
14
<PAGE> 21
Subsidiaries, respectively, or (iii) the ability of the Company or its
Subsidiaries to grant any liens on its properties or assets. Section 3.2 of the
Company Disclosure Schedule sets forth the amount of principal and unpaid
interest outstanding as of June 30, 1999 under each instrument evidencing
indebtedness of the Company and its Subsidiaries which will accelerate or become
due or result in a right of redemption or repurchase on the part of the holder
of such indebtedness (with or without due notice or lapse of time) as a result
of this Agreement, the Merger or the other Transactions. For purposes of this
Agreement "Indebtedness" shall include (i) all indebtedness for borrowed money
or for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (ii) any other indebtedness which is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations under financing leases, (iv) all obligations in respect of
acceptances issued or created, (v) all liabilities secured by any lien on any
property, and (vi) all guarantee obligations.
Section 3.3 Authorization; Validity of Agreement; Company Action. (a)
The Company has full corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution, delivery and
performance by the Company of this Agreement, and the consummation by it of the
Transactions, have been duly and validly authorized by the Board of Directors by
unanimous vote, and no other corporate action on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the Transactions, except that
consummation of the Merger may require approval of the Company's stockholders as
contemplated by Section 1.11. This Agreement has been duly executed and
delivered by the Company and, assuming due and valid authorization, execution
and delivery hereof by Parent and Purchaser, is a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) Neither the provisions of Section 203 of Delaware Law nor,
to the knowledge of the Company, any other takeover laws of any state or
jurisdiction are applicable to this Agreement or the other Transactions,
including the Merger and the purchase of Shares in the Offer. The affirmative
vote of the holders of a majority of the outstanding shares of Common Stock is
the only vote of the holders of any class or series of the Company's capital
stock which may be necessary to approve this Agreement and the other
Transactions, including the Merger.
Section 3.4 Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the filing
of the Certificate of Merger pursuant to Delaware Law, none of the execution,
delivery or performance of this Agreement by the Company, the consummation by
the Company of the Transactions or compliance by the Company with any of
15
<PAGE> 22
the provisions hereof will (i) conflict with or result in any breach of any
provision of the Certificate of Incorporation, the Bylaws or similar
organizational documents of the Company or any of its Subsidiaries, (ii) require
any filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency (a "Governmental Entity"), (iii) result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their properties or assets may be
bound (the "Company Agreements") or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets, except in the case of clauses
(ii), (iii) or (iv) where failure to obtain such permits, authorizations,
consents or approvals or to make such filings, or where such violations,
breaches or defaults would not, individually or in the aggregate, have a Company
Material Adverse Effect.
Section 3.5 SEC Reports and Financial Statements. The Company has
timely filed with the SEC, and has heretofore made available to Parent, and with
respect to filings not yet due, will timely file and promptly make available to
Parent, true and complete copies of all forms, reports, schedules, statements
and other documents required to be filed by it since January 1, 1996, under the
Exchange Act or the Securities Act of 1933, as amended (the "Securities Act")
(as such documents have been amended since the time of their filing,
collectively, the "Company SEC Documents"). As of their respective dates, or if
amended, as of the date of the last such amendment, the Company SEC Documents,
including any financial statements or schedules included therein (a) did not, or
will not, with respect to filings not yet due, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading and (b) complied, or will comply,
with respect to filings not yet due, in all material respects with the
applicable requirements of the Exchange Act or the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. None of
the Company's Subsidiaries is required to file any forms, reports or other
documents with the SEC. Each of the consolidated financial statements included
in the Company SEC Documents (the "Financial Statements") (i) has been prepared,
or will be prepared, with respect to filings not yet due, from, and is in
accordance with, the books and records of the Company and its consolidated
Subsidiaries, (ii) complies, or will comply, with respect to filings not yet
due, in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, (iii) has
been prepared, or will be prepared, with respect to filings not yet due, in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto and subject, in the case of unaudited
statements, to normal year-end audit adjustments) and (iv) fairly presents, or
will fairly present, with respect to filings not yet due, the consolidated
financial position and the consolidated results of operations and cash flows
(and
16
<PAGE> 23
changes in financial position, if any) of the Company and its consolidated
Subsidiaries as of the times and for the periods referred to therein.
Section 3.6 Absence of Certain Changes. From January 1, 1999 through
the date of this Agreement, (i) the Company and its Subsidiaries have conducted
their respective businesses only in the ordinary and usual course, (ii) there
has not occurred any event, change or effect (including the incurrence of any
liabilities of any nature, whether or not accrued, contingent or otherwise)
having, individually or in the aggregate, a Company Material Adverse Effect, and
(iii) neither the Company nor any of its Subsidiaries has taken any of the
actions that if taken after the date of this Agreement would be prohibited by
Section 5.2 hereof.
Section 3.7 No Undisclosed Liabilities. Except (a) as disclosed in the
balance sheet contained in the most recent Financial Statements included in the
Company SEC Documents filed prior to the date of this Agreement (the "Recent
Balance Sheet") and (b) for liabilities and obligations (i) incurred in the
ordinary course of business and consistent with past practice since the date of
the Recent Balance Sheet, (ii) pursuant to the terms of this Agreement, or (iii)
as disclosed in Section 3.7 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would,
individually or in the aggregate have a Company Material Adverse Effect or would
be required to be reflected or reserved against on a consolidated balance sheet
of the Company and its Subsidiaries (including the notes thereto) prepared in
accordance with GAAP as applied in preparing the Recent Balance Sheet.
Section 3.8 Information in Proxy Statement. The Proxy Statement, if any
(or any amendment thereof or supplement thereto), will, at the date it or any
amendment or supplement is filed with the SEC, mailed to Company stockholders
and at the time of the meeting of Company stockholders to be held in connection
with the Merger, not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the Company with
respect to statements made therein based on information supplied in writing by
Parent or Purchaser for inclusion in the Proxy Statement. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.
Section 3.9 Opinion of Financial Advisor. The Board of Directors has
received the opinion of Wasserstein Perella & Co., Inc., dated July 27, 1999 to
the effect that, as of such date, the consideration to be received in the Offer
and the Merger by the Company's stockholders is fair from a financial point of
view, a copy of which opinion has been delivered to Parent and Purchaser.
Section 3.10 Brokers or Finders. The Company represents, as to itself
and its Subsidiaries and affiliates, that, except for Wasserstein Perella & Co.,
Inc., no agent, broker, investment banker, financial advisor or other firm or
person is or will be entitled to any brokers'
17
<PAGE> 24
or finder's fee or any other commission or similar fee from the Company or any
of its Subsidiaries in connection with any of the transactions contemplated by
this Agreement.
Section 3.11 Litigation. As of the date hereof, there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries or any of
their respective properties or assets before any Governmental Entity which,
individually or in the aggregate, would have a Company Material Adverse Effect,
nor, to the knowledge of the Company, are there any facts, circumstances or
developments that are reasonably likely to give rise to any such suit, claim,
action, proceeding or investigation. Neither the Company nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which, individually or in the aggregate, has had, or in the future would
reasonably be expected to have, a Company Material Adverse Effect.
Section 3.12 Compliance with Applicable Law. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses, except such permits, licenses, variances, exceptions,
orders or approvals the failure of which to hold, individually or in the
aggregate, has not had, or would reasonably be expected not to have, a Company
Material Adverse Effect (the "Company Permits"). The Company and its
Subsidiaries are in compliance in all material respects with the terms of the
Company Permits. The businesses of the Company and its Subsidiaries have not
been and are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity except for violations or possible
violations which have not had, or would reasonably be expected not to have, a
Company Material Adverse Effect. As of the date hereof, no investigation or
review by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the knowledge of the Company, threatened nor, to
the knowledge of the Company, has any Governmental Entity indicated an intention
to conduct the same.
Section 3.13 Taxes. Each of the Company and its Subsidiaries has filed,
or caused to be filed, all material federal, state, local and foreign income and
other tax returns required to be filed by it, has paid or withheld, or caused to
be paid or withheld, all taxes of any nature whatsoever, with any related
penalties, interest and liabilities (any of the foregoing being referred to
herein as a "Tax"), that are shown on such tax returns as due and payable, or
otherwise required to be paid, other than such Taxes as are being contested in
good faith and for which adequate reserves have been established or such Taxes,
the failure of which to be paid or withheld would not have a Company Material
Adverse Effect. There are no claims or assessments pending against the Company
or its Subsidiaries for any alleged deficiency in any Tax, and the Company does
not know of any threatened Tax claims or assessments against the Company or any
of its Subsidiaries which if upheld could, individually or on the aggregate,
have a Company Material Adverse Effect. There is no material deferred
intercompany gain within the meaning of the Treasury regulations promulgated
under section 1502 of the Internal Revenue Code of 1986, as amended. There are
no waivers or extensions of any applicable statue of limitations to assess any
Taxes. All returns filed with respect to Taxes are true and correct in all
18
<PAGE> 25
material respects, except for such returns, the failure of which to be so true
and correct would not have a Company Material Adverse Effect. There are no
outstanding requests for any extension of time within which to file any return
or within which to pay any Taxes shown to be due on any return.
Section 3.14 ERISA. The Company has delivered to Parent a correct and
complete list and copy of each Company Plan and each Company Multiemployer Plan.
Each Company Plan complies in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code and all other applicable statutes and governmental rules and
regulations, and (i) no "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any Company Plan, (ii) neither the
Company nor any of its ERISA Affiliates has withdrawn, completely or partially,
from any Company Multiemployer Plan or instituted, or is currently considering
taking, any action to do so, and (iii) no action has been taken, or is currently
being considered to terminate any Company Plan subject to Title IV of ERISA.
Except as provided in the Recent Balance Sheet, no Company Plan, or any trust
created thereunder, has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, which would,
individually or in the aggregate, have a Company Material Adverse Effect. There
are no actions, suits or claims pending or, to the knowledge of the company,
threatened (other than routine claims for benefits) with respect to any Company
Plan which would have a Company Material Adverse Effect. Neither the Company nor
any of its ERISA Affiliates has incurred or reasonably expects to incur any
liability under or pursuant to Title IV or ERISA which would, individually or in
the aggregate, have a Company Material Adverse Effect. No prohibited
transactions described in Section 406 of ERISA or Section 4975 of the Code have
occurred. All Company Plans that are intended to be qualified under Section
401(a) of the Code have been determined by the Internal Revenue Service to be so
qualified, and the Company is not aware of any reason why any such Company Plan
is not so qualified in operation. Neither the Company nor any of its ERISA
Affiliates has been notified by any Company Multiemployer Plan that such Company
Multiemployer Plan is currently in reorganization or insolvency under and within
the meaning of Section 4241 or 4245 of ERISA or that such Company Multiemployer
Plan intends to terminate or has been terminated under Section 4041A of ERISA.
As used herein, (i) "Company Plan" means a "pension plan" (as defined in Section
3(2) of ERISA (other than a Company Multiemployer Plan)) or a "welfare plan" (as
defined in Section 3(1) of ERISA) established or maintained by the Company or
any of its ERISA Affiliates or as to which the Company or any of its ERISA
Affiliates has contributed or otherwise may have any liability; (ii) "Company
Multiemployer Plan" means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which the Company or any of its ERISA Affiliates is or
has been obligated to contribute or otherwise may have any liability; and (iii)
"ERISA Affiliate" means (A) any corporation which at any time on or before the
Effective Time is or was a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as the Company, (B) any
partnership, trade or business (whether or not incorporated) which at any time
on or before the Effective Time is or was under common control (within meaning
of Section 414(c) of the Code) with the Company and (C) any entity which at any
time on or before the Effective Time is or was
19
<PAGE> 26
a member of the same affiliated service group (within the meaning of Section
414(m) of the Code) as either the Company, any corporation described in clause
(A) of this clause (iii) or any partnership, trade or business described in
clause (B) of this clause (iii). No Company Plan (i) provides health, life
insurance or other welfare benefits to former employees (or their dependents or
beneficiaries) after retirement or termination of employment except as required
by Section 601 et seq. of ERISA or any applicable state law, death benefits or
retirement benefits under any "pension plan" (as defined in section 3(2) of
ERISA), deferred compensation benefits accrued as liabilities on the books of
the Company, any of its Subsidiaries or any ERISA Affiliates or benefits, the
full direct cost of which is borne by the current or former employee (or
beneficiary thereof) and (ii) no Company Plan provides additional benefits or
contains other provisions that would become effective upon or as a result of the
consummation of any of the transactions contemplated herein.
Section 3.15 Environmental Matters. Except as would not reasonably be
expected to have a Company Material Adverse Effect:
(a) the Company and each of its Subsidiaries has obtained and is
in compliance with the terms and conditions of all permits, licenses and other
authorizations required under applicable federal, state and local laws and
regulations as currently in effect relating to pollution or the protection or
clean-up of the environment ("Environmental Laws");
(b) no asbestos requiring abatement, equipment containing
polychlorinated biphenyls above regulated levels or leaking underground or
aboveground storage tanks is contained in or located at, and no release of a
Hazardous Substance (as hereinafter defined) has occurred and remains
outstanding at, any facility that is or has been owned, leased or controlled by
the Company or any of its Subsidiaries;
(c) the Company and each of its Subsidiaries is in compliance with
all applicable Environmental laws; and
(d) neither the Company nor any of its Subsidiaries has received
written notice of any event, condition, circumstance, activity, practice,
incident, action or plan that has resulted in or reasonably threatens to result
in any legal liability to the Company or any of its Subsidiaries under, or
otherwise reasonably forms the basis of any claim, action, suit, proceeding,
hearing or investigation under, any applicable Environmental Laws in any such
case that remains outstanding.
For purposes of this Section 3.15, "Hazardous Substances" means any toxic or
other substance regulated under Environmental Laws, including (i) any "hazardous
substance" as defined in 42 U.S.C. ss. 9601, and (ii) petroleum products,
derivatives, byproducts and other hydrocarbons.
Section 3.16 Labor Matters. (i) Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or
20
<PAGE> 27
understanding with a labor union or labor organization; (ii) neither the Company
nor any of its Subsidiaries is the subject of any proceeding asserting that it
has committed an unfair labor practice or seeking to compel it to bargain with
any labor union or organization as to wages or conditions of employment; (iii)
there is no strike, work stoppage or other labor dispute involving it or any of
its Subsidiaries pending or, to the Company's knowledge, threatened, except, in
the case of clauses (ii) and (iii), for matters that would not, individually or
in the aggregate, have a Company Material Adverse Effect.
Section 3.17 Intellectual Property. Except as would not reasonably be
expected to have a Company Material Adverse Effect, all patents, patent
applications, registered and unregistered copyrights, trade names, registered
and unregistered trademarks and trademark applications, trade secrets and other
proprietary information of the Company or any of its Subsidiaries (collectively,
"Company Intellectual Property") are owned by or licensed to the Company or any
of its Subsidiaries, free and clear of all liens, charges, security interests,
options, claims, mortgages, pledges or other encumbrances and restrictions of
any nature whatsoever. All Company Intellectual Property consisting of patents,
patent applications, trademarks and trademark applications are identified on
Schedule 3.17 of the Company Disclosure Schedule and, except as set forth
therein, have been duly registered and filed in and issued by the United States
Patent and Trademark Office or the corresponding offices of other countries, and
have been properly maintained and renewed in accordance with all applicable laws
and regulations in the United States and each such country. Use of Company
Intellectual Property by the Company and its Subsidiaries does not, and use by
Parent or its Subsidiaries at and following the Effective Time (subject to the
filing of renewal notices in the ordinary course following the Effective Time)
will not, require the consent of any other Person and the same are freely
transferable (except as otherwise provided by law). Except as would not
reasonably be expected to have a Company Material Adverse Effect and except as
set forth in Schedule 3.17 of the Company Disclosure Schedule, (i) no other
Person has an interest in or right or license to use, or the right to license
any other Person to use, any Company Intellectual Property, (ii) there are no
claims or demands of any other Person pertaining thereto and no proceeding has
been instituted, is pending or, to the knowledge of the company, threatened
which challenges the Company's or its Subsidiaries' rights in respect thereof
which, if resolved adversely to the Company, would materially impair the use or
value of such Company Intellectual Property before or after the Effective Time
or would, individually or in the aggregate, have a Company Material Adverse
Effect and (iii) to the Company's knowledge, no Company Intellectual Property is
being infringed by another Person or is subject to any outstanding order,
decree, ruling, charge, injunction, judgment or stipulation.
Section 3.18 Year 2000 Matters. All information systems, computer
systems and electronic systems of the Company and each of its Subsidiaries are
Millennium Compliant, except for failures to be Millennium Compliant as
individually or in the aggregate would not have a Company Material Adverse
Effect. "Millennium Compliant" means the quality of a system to provide all of
the following functions: (i) handle date information before, during and after
January 1, 2000, including accepting date input, providing date output, and
performing calculations on dates or portions of dates; (ii) function accurately
and without interruption before, during and
21
<PAGE> 28
after January 1, 2000, without any change in operations associated with the
advent of the new century; (iii) respond to two-digit year-date input in a way
that resolves the ambiguity as to century in a disclosed, defined, and
predetermined manner; and (iv) store and provide output of date information in
ways that are unambiguous as to century.
Section 3.19 Customers and Suppliers. During the 18 months prior to the
date hereof, there has not been any material adverse change in the business
relationship (including notices of reductions in purchases from or sales to, the
Company), and there has been no material dispute or complaint, between the
Company or any Subsidiary (on the one part) and any Major Customer or Major
Supplier (on the other part), other than routine disputes or complaints handled
in the ordinary course of business. A "Major Customer" means one of the 20
largest customers of the Company and its Subsidiaries in terms of revenue earned
during each of the two most recently completed fiscal years and the portion of
the current fiscal year prior to the date of this Agreement and a "Major
Supplier" means one of the 20 largest suppliers of Company and its Subsidiaries
in terms of purchases during each of the two most recently completed fiscal
years and the portion of the current fiscal year prior to the date of this
Agreement.
Section 3.20 Title to and Condition of Assets. The Company and each of
its Subsidiaries have good, sufficient, and marketable title to all of their
properties and assets, whether real, personal, or a combination thereof, free
and clear of all liens, charges, security interests, options, claims, mortgages,
pledges or other encumbrances and restrictions of any nature whatsoever, except
for such imperfections of title, easements, restrictions, and encumbrances, if
any, as are not material in character, amount, or extent, and do not materially
detract from the value, or materially interfere with the present use, of the
properties subject thereto or affected thereby, except liens for real estate
taxes not yet due and payable. All of the personal property owned or used by the
Company is in good condition and repair (normal wear and tear excepted). With
respect to each parcel of real property owned, legally and beneficially, by the
Company or the Company's Subsidiaries ("Company Real Property"):
(a) No Encroachments. Except for those encroachments that have
been insured over by a policy of title insurance, no building or improvement to
the Company Real Property encroaches on any easement or property owned by
another Person. No building or property owned by another Person encroaches on
the Company Real Property or on any easement benefitting the Company Real
Property. No claim of encroachment has been asserted by any Person with respect
to any parcel of the Company Real Property.
(b) Zoning. Neither the Company, any of the Company's
subsidiaries, nor the Company Real Property is in material violation of any
zoning regulation, building restriction, restrictive covenant, ordinance, or
other law, order, regulation, or requirement relating to the Company Real
Property.
(c) Buildings. All buildings and improvements to the Company
Real Property are in good condition (normal wear and tear excepted), are
structurally sound and are not in need
22
<PAGE> 29
of material repairs, are fit for their intended purposes, and are adequately
serviced by all utilities necessary for the effective operation of business as
presently conducted at that location.
(d) No Condemnation. None of the Company Real Property is the
subject of any condemnation action. There is no proposal under active
consideration by any public or governmental authority or entity to acquire the
Company Real Property for any governmental purpose.
Section 3.21 Material Contracts. Schedule 3.21 of the Company
Disclosure Schedule sets forth all Company Agreements of the following types:
(a) any collective bargaining agreement;
(b) any Company Agreement with any employee, officer, or
director of the Company or any Subsidiary, or any of the respective affiliates
of such individuals not terminable by the Company or a Subsidiary without
liability on 90 or fewer days' notice;
(c) any Company Agreement with a sales representative,
manufacturer's representative, distributor, dealer, broker, sales agency,
advertising agency, or other Person engaged in sales, distributing or
promotional activities, or any Company Agreement to act as one of the foregoing
on behalf of any Person not terminable by the Company or a Subsidiary without
liability on 90 or fewer days' notice;
(d) any Company Agreement that either: (i) requires a payment of
cash or other property by any party in excess of, or a series of payments that
in the aggregate exceed, $250,000, or provides for the delivery of goods or
performance of services, or any combination thereof, having a value in excess of
$250,000; or (ii) has a term, or requires the performance of any obligations
over a period, in excess of one (1) year;
(e) any Company Agreement pursuant to which the Company or any
Subsidiary grants or is granted any license, rights of joint use, or other
rights to use any of the Company's or any Subsidiary's material assets;
(f) any Company Agreement pursuant to which the Company or any
Subsidiary has made or shall make loans or advances, or has or shall have
incurred debts or become a guarantor or surety, or has or shall have pledged its
credit on, or otherwise become responsible with respect to, any undertaking of
any third party (except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of business and loans or
advances to employees in the ordinary course of business);
(g) any indenture, credit agreement, loan agreement, note,
mortgage, security agreement, lease of real property or personal property, loan
commitment, or other Company Agreement relating to the borrowing of funds,
extension of credit, or financing;
23
<PAGE> 30
(h) any Company Agreement, irrespective of whether fully
performed, relating to any acquisition or disposition of the Company, any
Subsidiary, or any predecessor in interest thereof, or any acquisition or
disposition of any division, line of business, or real property (whether by
stock or asset purchase, merger, consolidation, or otherwise) entered into since
July 1, 1994;
(i) any Company Agreement involving a partnership, joint
venture or other similar undertaking;
(j) any Company Agreement involving any restrictions with
respect to the geographical area of operations or scope or type of business of
the Company or any Subsidiary;
(k) any power of attorney or agency agreement or arrangement
with any Person pursuant to which such Person is granted the authority to act
for, or on behalf of, the Company or any Subsidiary, or the Company or any
Subsidiary is granted the authority to act for, or on behalf of, any Person; and
(l) any Company Agreement not made in the ordinary course of
business and consistent with past practice, or any Company Agreement not
specified above that is material to the Company or any Subsidiary.
The Company has delivered or made available to Parent a copy
of each written Company Agreement and a written description of each oral Company
Agreement specified above. Neither the Company nor any Subsidiary is in default
in any respect under any Company Agreement, and there has not occurred any event
which, with the lapse of time or the giving of notice or both, would constitute
such a default, except, in both cases, for such defaults as individually or in
the aggregate would not have a Company Material Adverse Effect.
Section 3.22 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article III, the
Stockholders Agreements or the letter agreement dated of even date herewith
provided by Caradon plc to the Company, neither the Company nor any other Person
makes any other express or implied representation or warranty on behalf of the
Company or any of its affiliates, and for the avoidance of doubt, neither the
Company nor any of its affiliates makes any express or implied representation or
warranty with respect to information contained in the confidential memorandum
prepared by the Company in conjunction with Wasserstein Perella & Co. and
delivered to Parent or its representatives in May 1999, including any
projections set forth therein, or any projections otherwise provided to Parent
or the Purchaser.
Section 3.23 Full Disclosure. No representation or warranty of
the Company set forth in this Agreement and no statement contained in any
certificate or writing (including the Company Disclosure Schedule) delivered to
Parent or Purchaser as contemplated by this Agreement or in connection with the
Transactions, contains or will contain any untrue statement
24
<PAGE> 31
of material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of the circumstances
in which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and
warrant to the Company as follows:
Section 4.1 Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and Purchaser has full corporate power and authority to
execute and deliver this Agreement and to consummate the Merger and the other
Transactions. The execution, delivery and performance by Parent and Purchaser of
this Agreement and the consummation by them of the Transactions have been duly
and validly authorized by the respective boards of directors of Parent and
Purchaser and by Parent as the sole stockholder of Purchaser, and no other
corporate action on the part of Parent or Purchaser is necessary to authorize
the execution and delivery by Parent and Purchaser of this Agreement and the
consummation by them of the Transactions. This Agreement has been duly executed
and delivered by Parent and Purchaser and, assuming due and valid authorization,
execution and delivery hereof by the Company, is a valid and binding obligation
of each of Parent and Purchaser enforceable against each of them in accordance
with its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the HSR Act, and
the filing of the Certificate of Merger pursuant to Delaware Law, none of the
execution, delivery or performance of this Agreement by Parent or Purchaser, the
consummation by Parent or Purchaser of the Transactions or compliance by Parent
or Purchaser with any of the provisions hereof will (i) conflict with or result
in any breach of any provision of the respective Certificates of Incorporation
or Bylaws of Parent or Purchaser, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (iii) result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or
25
<PAGE> 32
any of its Subsidiaries or Purchaser is a party or by which any of them or any
of their respective properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Parent, any of their Subsidiaries or any of their properties or assets, except
in the case of clause (ii), (iii) or (iv) where failure to obtain such permits,
authorizations, consents or approvals or to make such filings, or where such
violations, breaches or defaults would not, individually or in the aggregate,
have a material adverse effect on the ability of Parent and Purchaser to
consummate the Transactions.
Section 4.4 Information in Proxy Statement. None of the
information supplied by Parent or Purchaser in writing specifically for
inclusion or incorporation by reference in the Proxy Statement (or any amendment
thereof or supplement thereto) will, at the date mailed to stockholders and at
the time of the meeting of stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
Section 4.5 Financing. Parent and Purchaser have, and at the
Closing will have, sufficient funds available to finance and consummate the
Transactions.
Section 4.6 Brokers or Finders. Each of Purchaser and Parent
represents, as to itself and its affiliates, that, except for KPMG Corporate
Finance, no agent, broker, investment banker, financial advisor or other firm or
person is or will be entitled to any brokers' or finder's fee or any other
commission or similar fee from either Purchaser or Parent in connection with any
of the transactions contemplated by this Agreement.
Section 4.7 No Other Representations and Warranties. Except
for the representations and warranties contained in this Article IV and the
letter agreement dated of even date herewith provided by Caradon plc to the
Company, neither Parent, Purchaser nor any other Person makes any other express
or implied representation or warranty on behalf of the Parent, Purchaser or any
of their affiliates.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Acquisition Proposals; No Solicitation.
(a) The Company agrees that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations, if
any, with any parties conducted heretofore with respect to any Takeover Proposal
(as defined below). In addition, the Company will not, will cause its officers
and directors not to, and will use its reasonable best efforts to ensure that
its employees (other than its officers or directors), investment bankers,
attorneys, accountants and other agents and representatives do not, directly or
indirectly: (i) initiate, solicit
26
<PAGE> 33
or encourage, or take any action to facilitate the making of, any offer or
proposal which constitutes or is reasonably likely to lead to any Takeover
Proposal, (ii) enter into any agreement with respect to any Takeover Proposal,
or (iii) engage in any negotiations or discussions with, or provide any
information or data to, any Person (other than Parent or any of its affiliates
or representatives) relating to any Takeover Proposal; provided that nothing
contained in this Section 5.1 or any other provision hereof shall prohibit the
Company or the Board of Directors from (1) taking and disclosing to the
Company's stockholders a position with respect to a tender or exchange offer by
a third party pursuant to Rules l4d-9 and 14e-2 promulgated under the Exchange
Act or (2) making such other disclosure to the Company's stockholders as the
Board of Directors determines in good faith after consulting with its counsel
and determining that the failure to make such disclosure would constitute a
breach of the Board of Directors' fiduciary duties under applicable law.
(b) Notwithstanding the foregoing, prior to the acceptance of
Shares pursuant to the Offer, the Company may, in response to an unsolicited
written proposal with respect to a Takeover Proposal from a financially capable
third party that contains no financing condition, furnish information to, and
negotiate, explore or otherwise engage in substantive discussions with, such
third party, in each case only if (i) the Board determines in good faith by a
majority vote, after consultation with its financial advisors and after receipt
of advice of the outside legal counsel of the Company, that failing to take such
action would constitute a breach of the fiduciary duties of the Board, and (ii)
the Company obtains a confidentiality and standstill agreement no less favorable
to the Company than the Confidentiality Agreement entered into with Parent. The
Company shall promptly advise Parent in writing of the receipt of any inquiries
or proposals relating to a Takeover Proposal, indicating the name of the Person
making such inquiry or proposal, the terms and conditions thereof and any
actions taken pursuant to this Section 5.1(b). A copy of any written inquiry or
proposal relating to a Takeover Proposal shall be promptly furnished to Parent.
(c) As used in this Agreement, "Takeover Proposal" shall mean
any tender or exchange offer involving the Company, any proposal for a merger,
consolidation or other business combination involving the Company, any proposal
or offer to acquire in any manner greater than a 20% equity interest in, or
greater than a 20% portion of the business or assets of, the Company, any
proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company, other
than pursuant to the Transactions.
Section 5.2 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as expressly contemplated by this
Agreement, in compliance with applicable laws, and (ii) as set forth in Section
5.2 of the Company Disclosure Schedule or (iii) as agreed in writing by Parent
after the date hereof, and prior to the Appointment Date:
(a) the business of the Company and its Subsidiaries
shall be conducted only in the ordinary and usual course consistent with past
practice and in compliance with
27
<PAGE> 34
applicable laws, and each of the Company and its Subsidiaries shall use its
reasonable best efforts to preserve and protect its business organization,
properties and assets intact and maintain its existing relations with customers,
suppliers, employees, creditors and business partners to the end that its
goodwill and business shall be unimpaired in any material respect as of the
Effective Time;
(b) the Company will not, directly or indirectly,
(i) except upon exercise of Options or other rights to purchase shares of Common
Stock pursuant to the Stock Plans outstanding on the date hereof, issue, sell,
transfer or pledge or agree to issue, sell, transfer or pledge any capital stock
of the Company or any capital stock of any of its Subsidiaries beneficially
owned by it, (ii) amend its Certificate of Incorporation or Bylaws or similar
organizational documents or the organizational document of any Subsidiary; or
(iii) split, combine, reclassify or otherwise amend or modify the terms or
rights of the outstanding Shares or any outstanding capital stock of any of the
Subsidiaries of the Company;
(c) neither the Company nor any of its
Subsidiaries shall: (i) declare, set aside, pay or make provision for any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock, except for a cash dividend of $.01 per share payable on
September 30, 1999 to recordholders of Shares as of September 15, 1999; (ii)
issue, sell, pledge, dispose of or encumber any additional shares of, or
securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire (or stock appreciation rights with
respect to), any shares of capital stock of any class of the Company or its
Subsidiaries, other than Shares reserved for issuance on the date hereof
pursuant to the exercise of Options outstanding on the date hereof, (iii) enter
into any agreement or understanding with respect to the voting of any of its
capital stock or the capital stock of any Subsidiary; (iv) acquire, transfer,
lease, license, sell, mortgage, pledge, dispose of, or encumber any assets,
other than the sale of inventory in the ordinary and usual course of business
and consistent with past practice, or incur or modify any indebtedness except
for additional borrowings under existing lines of credit in the ordinary course
of business and consistent with past practice and in an amount not to exceed
$100,000 or other liability, other than in the ordinary and usual course of
business and consistent with past practice; (v) redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock; or (vi) make or
authorize any capital expenditure in excess of $100,000 individually or $400,000
in the aggregate;
(d) neither the Company nor any of its
Subsidiaries shall (i) make any change in the compensation payable or to become
payable to any of its officers, directors, employees, agents or consultants
(other than general increases in wages to employees who are not officers or
directors or affiliates in the ordinary course consistent with past practice),
or to Persons providing management, consulting or similar services, (ii) enter
into or amend any employment, severance, consulting, termination or other
agreement or employee benefit Plan or other Plan or make any loans to any of its
officers, directors, employees, affiliates, agents or consultants or make any
change in its existing borrowing or lending arrangements for or on behalf of any
of such Persons pursuant to an employee benefit plan or otherwise;
28
<PAGE> 35
(e) neither the Company nor any of its
Subsidiaries shall (i) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any existing
plan, agreement or arrangement to any officer, director, employee or affiliate
or pay or agree to pay or make any accrual or arrangement for payment to any
officers, directors, employees or affiliate of the Company of any amount
relating to unused vacation or sick days, except payments and accruals made in
the ordinary course consistent with past practice or as required under the terms
of any employment, bonus, deferred compensation, incentive compensation, stock
purchase, stock option, stock appreciation right or other stock-based incentive,
severance, change-in-control, termination or similar pay, hospitalization or
other medical, disability, life or other insurance, supplemental unemployment
benefits, profitsharing, pension, or retirement plan, program, agreement or
arrangement, and each other employee benefit plan, program, agreement or
arrangement, sponsored, maintained or contributed to or required to be
contributed to by the Company or any of its Subsidiaries for the benefit of any
current or former employee or director of the Company or any of its Subsidiaries
(the "Plans"); (ii) adopt or pay, grant, issue, accelerate or accrue salary or
other payments or benefits pursuant to any pension, profit-sharing, bonus, extra
compensation, incentive, deferred compensation, stock purchase, stock option,
stock appreciation right or other stock-based incentive, group insurance,
severance pay, retirement or other employee benefit plan, agreement or
arrangement, or any employment or consulting agreement with or for the benefit
of any director, officer, employee, agent or consultant whether past or present
except for payments and accruals made in the ordinary course of business and
consistent with past practice or as required under the terms of the Plans; or
(iii) amend in any material respect any such existing Plan, agreement or
arrangement in a manner inconsistent with the foregoing;
(f) neither the Company nor any Subsidiary shall
modify, amend or terminate any of the Company Agreements, enter into any Company
Agreement other than in the ordinary course of business and consistent with past
practice, extend the term or renew any Company Agreements, or waive, release or
assign any rights or claims, except for the waiver, release or assignment of
immaterial rights or claims in the ordinary course of business and consistent
with past practice, or waive or release any rights under any standstill,
confidentiality or similar agreements;
(g) neither the Company nor any of its
Subsidiaries will permit any insurance policy naming it as a beneficiary or a
loss payable payee to be cancelled or terminated or the coverages thereunder to
be reduced or deductibles increased;
(h) neither the Company nor any of its
Subsidiaries will (i) incur or assume any long-term debt, or except as provided
under subparagraph (c) above incur or assume any short-term indebtedness or
increase or modify the terms of any Indebtedness; (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person; (iii) make
any loans, advances or capital contributions to, or investments in, any other
Person, except the extension of customary trade credit in the ordinary course of
business and consistent with past practice; (iv) enter into any
29
<PAGE> 36
material commitment or transaction (including, but not limited to, any
borrowing, capital expenditure or purchase, sale or lease of assets or real
estate) or (v) mortgage or pledge any of its assets of record or suffer to exist
any lien or encumbrance thereon;
(i) neither the Company nor any of its
Subsidiaries shall (i) change any of the accounting methods used by it unless
required by GAAP and after consultation with Parent; (ii) make any tax election
or change any tax election already made, adopt any tax accounting method, change
any tax accounting method unless required by applicable law, enter into any
closing agreement, settle any tax claim or assessment or consent to any tax
claim or assessment or any waiver of the statute of limitations for any such
claim or assessment or (iii) revalue any of its assets; and
(j) neither the Company nor any of its
Subsidiaries will (i) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations, in the ordinary course of business and
consistent with past practice, or claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the Recent Balance Sheet (or the
notes thereto) or (ii) settle or compromise any suit, action or claim relating
to the Transactions;
(k) neither the Company nor any of its
Subsidiaries will (i) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than the Merger)
or (ii) acquire (by merger or acquisition of stock or assets) any corporation,
partnership or other entity, or division thereof, or equity interest therein;
(l) neither the Company nor any of its
Subsidiaries will take, or agree to commit to take, any action that would or is
reasonably likely to result in any of the conditions to the Merger set forth in
Article VII or any of the conditions to the Offer set forth in Annex A not being
satisfied, or would make many representation or warranty of the Company
contained herein inaccurate in any respect at, or as of any time prior to, the
Effective Time, or that would materially impair the ability of the Company to
consummate the Merger in accordance with the terms hereof or materially delay
such consummation; and
(m) the Company will not enter into an
agreement, contract, commitment or arrangement to do any of the foregoing, or
authorize, recommend, propose or announce an intention to do any of the
foregoing.
30
<PAGE> 37
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement. As promptly as practicable after
the consummation of the Offer and if required by the Exchange Act, the Company
shall prepare and file with the SEC, and shall use all reasonable efforts to
have cleared by the SEC, and promptly thereafter shall mail to Company's
stockholders, the Proxy Statement. Subject to this Agreement, the Proxy
Statement shall contain the recommendation of the Board of Directors to the
Stockholders to vote to approve the Merger and approve and adopt this Agreement.
Section 6.2 Meeting of Stockholders of the Company. At the
Special Meeting, if any, the Company will use its reasonable best efforts to
solicit from stockholders of the Company proxies in favor of the Merger and
subject to fiduciary requirements of applicable law, will take any other action
necessary or, in the reasonable opinion of Purchaser, advisable to secure any
vote or comment of stockholders required by Delaware Law to effect the Merger.
Purchaser agrees that it shall vote, or cause to be voted, in favor of the
Merger all Shares directly or indirectly beneficially owned by it.
Section 6.3 Additional Agreements. Subject to the terms and
conditions as herein provided, the Company, Parent and Purchaser will each
comply in all material respects with all applicable laws and with all applicable
rules and regulations of any governmental authority to achieve the satisfaction
of the Minimum Condition and all conditions set forth in Annex A, and to
consummate and make effective the Merger and the other transactions contemplated
hereby. Each of the parties hereto agrees to use all reasonable efforts to
obtain in a timely manner all necessary waivers, consents and approvals and to
effect all necessary registrations and filings, and to use all reasonable
efforts to take, or cause to be taken, all other actions and to do, or cause to
be done, all other things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of the Company, Parent and Purchaser shall use all
reasonable efforts to take, or cause to be taken, all such necessary actions.
Section 6.4 Notification of Certain Matters. The Company shall
give prompt notice to Purchaser and Purchaser shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence of any event whose occurrence,
or non-occurrence would be likely to cause either (A) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (B) any
condition set forth in Annex A to be unsatisfied in any material respect at any
time from the date hereof to the date Purchaser purchases Shares pursuant to the
Offer and (ii) any material failure of the Company, Purchaser or Parent, as the
case may be, or any officer, director, employee or agent or representative
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided that the delivery of any
notice pursuant to this
31
<PAGE> 38
Section 6.4 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 6.5 Access; Confidentiality. From the date hereof to
the Effective Time upon reasonable notice, the Company shall (and shall cause
each of its Subsidiaries to) afford to the officers, accountants, counsel,
financing sources and other representatives of Parent, access, during normal
business hours, to all its properties, books, contracts, commitments and records
and, during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to Parent (i) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws and (ii) all
other information concerning its business, properties and personnel as Parent
may reasonably request for the purpose of reviewing the Company's
representations and warranties set forth in Article III. Unless otherwise
required by law and until the Effective Time, Parent and Purchaser will hold any
such information which is non-public in confidence pursuant to the
Confidentiality Agreement, dated June 10, 1999 between the Company and Parent.
No investigation pursuant to this Section 6.5 shall affect any representation or
warranty made by the Company hereunder.
Section 6.6 Consents and Approvals.
(a) Each of the Company, Parent and Purchaser
will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to this Agreement and the
Transactions (which actions shall include furnishing all information required
under the HSR Act and in connection with approvals of or filings with any other
Governmental Entity in accordance with applicable law) and will promptly
cooperate with and furnish information to each other in connection with any such
requirements imposed upon any of them or any of their Subsidiaries in connection
with this Agreement and the Transactions. Each of the Company, Parent and
Purchaser will, and will cause its Subsidiaries to, take all reasonable actions
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Purchaser, the Company or any of their Subsidiaries
in connection with the Transactions or the taking of any action contemplated
thereby or by this Agreement.
(b) The Company and Parent shall take all
reasonable actions necessary to file as soon as practicable notifications under
the HSR Act and to respond as promptly as practicable to any inquiries received
from the Federal Trade Commission and the Antitrust Division of the Department
of Justice additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any state Attorney
General or other Governmental Entity in connection with antitrust matters.
Section 6.7 Publicity. The initial press release with
respect to the execution of this Agreement shall be a joint press release
acceptable to Parent and the Company. Thereafter,
32
<PAGE> 39
so long as this Agreement is in effect, neither the Company, Parent nor any of
their respective affiliates shall issue or cause the publication of any press
release or other announcement with respect to the Merger, this Agreement or the
other Transactions without the prior consultation of the other party, except as
such party believes, after receiving the advice of outside counsel and after
informing all other parties thereto, may be required by law or by any listing
agreement with a national securities exchange or trading market. Without
limiting the generality of the foregoing, the Company shall consult with Parent
concerning the timing and content of communications to the Company's or its
Subsidiaries' customers, suppliers, employees and other third parties having
material business dealings with the Company or its Subsidiaries.
Section 6.8 Directors' and Officers' Insurance and Indemnification.
(a) In the event of any threatened or actual claim, action, suit
proceeding or investigation, whether civil, criminal or administrative,
including any such claim, action, suit, proceeding or investigation by or in the
right of the Company or any of its Subsidiaries, in which any of the present
orformer officers or directors (the "Indemnified Parties") of the Company is, or
is threatened to be, made a party by reason of the fact that he or she is or
was, prior to the Effective Time, a director, officer, employee or agent of the
Company or any of its Subsidiaries or is or was, prior to the Effective Time,
serving as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise at the request of the
Company or any of its Subsidiaries, whether such claim arises before or after
the Effective Time, the Company shall indemnify and hold harmless, and after the
Effective Time the Surviving Corporation, jointly and severally, shall indemnify
and hold harmless, as and to the same extent and on the same terms and
conditions provided for in the Company's Certificate of Incorporation, Bylaws
and the agreements set forth in items 4 and 5 of Section 3.21(b) of the Company
Disclosure Schedule in effect on the date hereof (to the extent consistent with
applicable laws), each such Indemnified Party against any losses, claims,
damages, liabilities, costs, expenses (including reasonable attorneys' fees and
expenses), judgments, fines and amounts paid in settlement in connection with
any such claim, action, suit proceeding or investigation. In the event of any
such claim, action, suit proceeding or investigation (whether arising before or
after the Effective Time) with respect to which the Company or the Surviving
Corporation is required to provide indemnification hereunder, (i) the Company or
the Surviving Corporation may, at its election, assume the defense of such
matter; provided, that in the event that the Company or the Surviving
Corporation fails to assume such defense or, under applicable standards of
professional conduct, a conflict of interest on any significant issue exists
between the Company and the Surviving Corporation, on the one hand, and the
Indemnified Parties on the other hand, the Indemnified Parties may retain
counsel satisfactory to them (which counsel shall be reasonably satisfactory to
the Company or the Surviving Corporation), and the Company, or the Surviving
Corporation after the Effective Time, shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received and (ii) the Company or the Surviving Corporation, as the case may be,
will use its reasonable efforts to assist in the vigorous defense of any such
matter; provided, that neither the Company nor the Surviving Corporation, as the
case may be, shall be liable for any settlement effected without its prior
33
<PAGE> 40
written consent (which consent shall not be unreasonably withheld); and provided
further that neither the Company nor the Surviving Corporation, as the case may
be, shall have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and non-appealable, that indemnification
of such Indemnified Party in the manner contemplated hereby is prohibited by
applicable law. The Indemnified Parties as a group may retain only one law firm
to represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict of interest on any
significant issue between the positions of any two or more Indemnified Parties,
or any similar impediment to the joint representation of multiple Indemnified
Parties by a single law firm. After the Effective Time, Parent shall guarantee
the performance by the Surviving Corporation of its obligations under this
Section 6.8(a).
(b) Until the Effective Time, the Company shall
keep in effect Article VII of its Certificate of Incorporation, and thereafter
for a period of six years the Surviving Corporation shall keep in effect in its
Certificate of Incorporation or Bylaws a provision which provides for
indemnification of the Indemnified Parties to the extent required under Section
6.8(a).
(c) Parent or the Surviving Corporation shall
maintain the Company's existing officers' and directors' liability insurance
("D&O Insurance") for a period of not less than six years after the Effective
Time; provided that Parent may substitute therefor policies of substantially
equivalent coverage and amounts containing terms no less favorable to such
former directors or officers; provided, further if the existing D&O Insurance
expires, is terminated or cancelled during such period, Parent or the Surviving
Corporation will use all reasonable efforts to obtain substantially similar D&O
Insurance; provided, further, that in no event shall Parent be required to pay
aggregate premiums for insurance under this Section 6.8(c) in excess of 200% of
the average of the aggregate premiums paid by the Company in 1997, 1998 and 1999
(through the date hereof) on an annualized basis for such purpose (the "Average
Premium"), which true and correct amounts are set forth in Section 6.8(c) of the
Company Disclosure Schedule; and provided, further that if Parent or the
Surviving Corporation is unable to obtain the amount of insurance required by
this Section 6.8(c) for such aggregate premium, Parent or the Surviving
Corporation shall obtain as much insurance as can be obtained for an annual
premium not in excess of 200% of the Average Premium.
Section 6.9 Purchaser Compliance. Parent shall cause
Purchaser to comply with all of its obligations under or related to this
Agreement.
Section 6.10 Reasonable Best Efforts.
(a) Prior to the Closing, upon the terms and
subject to the conditions of this Agreement, Purchaser and the Company agree to
use their respective reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable under any applicable laws to consummate and make effective the
34
<PAGE> 41
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to (i) the preparation and filing of all forms,
registrations and notices required to be filed to consummate the transactions
contemplated by this Agreement and the taking of such actions as are necessary
to obtain any requisite approvals, consents, orders, exemptions or waivers by
any third party or Governmental Entity and (ii) the satisfaction of the other
parties' conditions to Closing. In addition, no party hereto shall take any
action after the date hereof that would reasonably be expected to materially
delay the obtaining of, or result in not obtaining, any permission, approval or
consent from any Governmental Entity necessary to be obtained prior to Closing.
Notwithstanding anything in this Agreement to the contrary, the Company shall
not, without Parent's prior written consent, commit to any divestiture
transaction and neither Parent nor any of its Subsidiaries (including Purchaser)
shall be required to divest or hold separate or otherwise commit to take any
action that limits its freedom of action with respect to, or its ability to
retain, the Company or any of its Subsidiaries, or any of the businesses,
product lines or assets of Parent or any of its Subsidiaries or that could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect on the Company or Parent. Nothing contained in this Agreement
shall require any party to cure any breach of this Agreement by any other party
or waive any condition to its Transactions.
(b) Prior to the Closing, each party shall promptly consult
with the other parties hereto with respect to, provide any necessary information
with respect to and provide the other (or its counsel) copies of, all filings
made by such party with any Governmental Entity or any other information
supplied by such party to a Governmental Entity in connection with this
Agreement and the transactions contemplated by this Agreement. Each party hereto
shall promptly inform the other of any communication from any Governmental
Entity regarding any of the transactions contemplated by this Agreement. If any
party hereto or affiliate thereof receives a request for additional information
or documentary material from any such Government Entity with respect to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response in compliance
with such request. To the extent that transfers of any permits issued by any
Governmental Entity are required as a result of execution of this Agreement or
consummation of the transactions contemplated hereby, the Company shall use its
reasonable best efforts to effect such transfers.
Section 6.11 Employee Matters. (a) Parent and the Purchaser
hereby agree to honor, and agree to cause the Surviving Corporation to honor,
and to make required payments when due under all contracts and agreements of the
Company and its Subsidiaries in effect as of the date hereof with any employee,
officer, director or executive or former employee, officer, or executive of the
Company or any Subsidiary thereof, including any such compensation, employment
and employee or director agreements in existence as of the date hereof (or as
modified to the extent permitted by Section 5.2 or by agreement of the parties
thereto).
(b) In addition to the foregoing, except as otherwise provided
in this Agreement, Parent hereby agrees that for a period of one year
immediately following the Effective
35
<PAGE> 42
Time, it shall, or shall cause the Surviving Corporation to, maintain plans for
the benefit of the employees of the Company and its Subsidiaries which in the
aggregate provide benefits that are substantially comparable to those provided
to them under such Plans on the date hereof.
Section 6.12 Company Financial Statements and SEC Reports. As
soon as practicable, but in any event within 20 days after the end of each
fiscal month commencing with the execution of this Agreement, and continuing
through the Effective Time or termination of this Agreement, the Company shall
deliver to Parent unaudited balance sheets of the Company and its Subsidiaries
as at the end of such fiscal month and as at the end of the comparative fiscal
month of the preceding year, together with unaudited statements of income and
cash flows of the Company and its Subsidiaries for such fiscal month and for the
period from the beginning of the fiscal year to the end of such fiscal month and
the comparative fiscal month and period of the preceding year. Such balance
sheets and statements of income and cash flows shall be presented in
consolidated and consolidating form as of the end of each month which is also
the end of a fiscal quarter and shall be prepared in accordance with past
practice. The Company shall also promptly deliver to Parent a copy of each
Company SEC Document filed by the Company after the date of this Agreement
promptly following the filing of such SEC Document, provided, that the Company
shall not be required to deliver a copy of any Company SEC Document filed
through the SEC's EDGAR system if the Company provides Parent with prompt notice
of such filing.
ARTICLE VII
CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER
The respective obligation of each party to effect the Merger
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions, any and all of which may be waived in whole or in part
by the Company, Parent or Purchaser, as the case may be, to the extent permitted
by applicable law:
Section 7.1 Stockholder Approval. The Merger and this
Agreement shall have been approved and adopted by the requisite vote of the
holders of the Shares, if required by Delaware Law;
Section 7.2 Statutes; Court Orders. No statute, rule or
regulation shall have been enacted or promulgated, no final, nonappealable
judgment, writ, decree, order or injunction shall have been entered or enforced,
and no other legally binding, final and nonappealable action shall have been
taken by any domestic or foreign government, governmental, administrative or
regulatory authority or agency or by any court or tribunal of competent
jurisdiction, domestic or foreign, that in any of the foregoing cases has the
effect of making illegal, restraining, restricting or precluding consummation of
the Merger; and
Section 7.3 Purchase of Shares in Offer. Purchaser
shall have made, or caused to be made, the Offer and shall have purchased, or
caused to be purchased, the Shares pursuant to
36
<PAGE> 43
the Offer, provided that this condition shall be deemed to have been satisfied
with respect to the obligation of Parent and Purchaser to effect the Merger if
Purchaser fails to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement (other than this
Article VIII and Article IX) may be terminated and the transactions contemplated
herein may be abandoned at any time before the Effective Time, whether before or
after stockholder approval:
(a) By mutual written consent of Parent and the
Board of Directors; or
(b) By Parent if the Offer shall have expired or
been terminated without any Shares being purchased thereunder by Purchaser as a
result of the failure to meet the conditions set forth in Annex A; or
(c) By either Parent or the Company if any
Governmental Entity shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use their
reasonable best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement; or
(d) By Parent if, without any material breach by
Parent or Purchaser of its obligations under this Agreement, the purchase of
Shares pursuant to the Offer shall not have occurred on or before October 31,
1999; or
(e) By the Company if, without any material breach
by the Company of its obligations under this Agreement, the purchase of Shares
pursuant to the Offer shall not have occurred on or before October 31, 1999; or
(f) By the Company (i) if, prior to the purchase
of Shares pursuant to the Offer, there shall be a material breach of any of
Parent or Purchaser's representations, warranties or covenants hereunder, which
breach cannot be or has not been cured within ten days of the receipt of written
notice thereof or (ii) to allow the Company to enter into a definitive agreement
to consummate a Superior Proposal (as defined below); provided, that it has
complied with all provisions thereof; and provided further, that it furnishes a
copy of the Superior Proposal, containing all of the terms and conditions
thereof, to Parent at least two calendar days prior to terminating this
Agreement pursuant to this Section 8.1(f); or
(g) By Parent if, prior to the purchase of Shares
pursuant to the Offer, the Company shall have breached in any material respect
(without reference to any materiality qualification contained therein) any
representation, warranty or covenant or other agreement
37
<PAGE> 44
contained in this Agreement, which breach (i) would give rise to the failure of
a condition set forth in paragraph (f) or (g) of Annex A and (ii) cannot be or
has not been cured within ten days of the receipt of written notice thereof; or
(h) By Parent if, (i) the Board of Directors shall
withdraw, modify, or change its recommendation or approval in respect of this
Agreement or the Offer in a manner adverse to Purchaser or (ii) the Board of
Directors shall have recommended any proposal other than by Parent or Purchaser
in respect of a Takeover Proposal; or
(i) By Parent if (A) the Company has exercised a
right regarding a Takeover Proposal pursuant to Section 5.1(b) and, directly or
indirectly (including through its representatives), shall continue discussions
or negotiations with a third party for more than 20 business days after the date
of receipt of such Takeover Proposal or (B) a Takeover Proposal shall have been
publicly disclosed, commenced, proposed or communicated to the Company other
than by Parent or Purchaser, and the Board of Directors shall have not
affirmatively rejected such Takeover Proposal within 20 business days after the
earlier of receipt or the public disclosure of such Takeover Proposal.
A "Superior Proposal" is a bona fide written Takeover Proposal submitted by any
Person other than Parent or Purchaser on an unsolicited basis that the Board of
Directors determines in good faith, based on the advice of its financial
advisor, represents a transaction that is more financially favorable to the
stockholders of the Company than the Offer and the Merger.
Section 8.2 Effect of Termination.
(a) In the event of termination of this
Agreement as provided in Section 8.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void, and there shall be no liability on the part of Parent, Purchaser or
the Company, except (i) as set forth in Sections 6.5, 8.2 and 9.3 and (ii)
nothing herein shall relieve any party from liability for any material breach of
this Agreement.
(b) If (i) the Company shall have terminated
this Agreement pursuant to Section 8.1(f)(ii), (ii) Parent shall have terminated
this Agreement pursuant to Section 8.1(h), or (iii) (A) Parent shall have
terminated this Agreement pursuant to Section 8.1(i), Section 8.1(g) (and the
breach giving rise to such right to terminate shall have been willful or in bad
faith) or Section 8.1(b) (because the Minimum Condition has not been satisfied)
and (B) in each case, the Company shall have consummated or entered into a
definitive agreement with respect to a Takeover Proposal within twelve months
following the date of such termination, then the Company shall pay to Parent,
(A) in the case of clause (i) or (ii) above, at the time of such termination,
and, in the case of clause (iii) above, upon the Company's consummation of or
entry into a definitive agreement regarding such Takeover Proposal, an amount
(the "Termination Fee") equal to $6,500,000 (which, in the case of a termination
pursuant to Section 8.1(g), shall
38
<PAGE> 45
constitute liquidated damages with respect to any breach giving rise to a right
to terminate hereunder) plus an amount (not to exceed $1,500,000) equal to
Parent's and Purchaser's actual out-of-pocket expenses attributable to the
Offer, the Merger, this Agreement and the consummation of the transactions
contemplated hereby. Any amount due under this Section 8.2(b) shall be payable
by wire transfer to such account as Parent may designate in writing to the
Company.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification; Waiver. Subject to
applicable law, this Agreement may be amended, modified and supplemented in any
and all respects, whether before or after any vote of the stockholders of the
Company contemplated hereby, by written agreement of the parties hereto, by
action taken by their respective Boards of Directors or equivalent governing
bodies, at any time prior to the Effective Time with respect to any of the terms
contained herein; provided, that after the approval of this Agreement by the
shareholders of the Company, no such amendment, modification or supplement shall
reduce the amount or change the form of the Merger Consideration. At any time
prior to the Effective Time, by action taken or authorized by the respective
Boards of Directors of Parent or the Company, as applicable, Parent or the
Company may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
Section 9.2 Non-survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time.
Section 9.3 Expenses. Except as expressly set forth in Section
8.2, all fees, costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
fees, costs and expenses.
Section 9.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is electronically confirmed) or sent by a nationally
recognized overnight courier service, such as FedEx, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
39
<PAGE> 46
(a) if to Parent or Purchaser, to:
Caradon Inc.
10931 Laureate Dr.
San Antonio, Texas 78249
Attention: Robert B. Leckie
Telephone: 210-694-1082
Facsimile: 210-641-0274
with a copy to:
Warner, Norcross & Judd LLP
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503
Attention: Tracy T. Larsen
Telephone: 616-752-2152
Facsimile: 616-752-2501
and
(b) if to the Company, to:
Easco, Inc.
706 South State Street
Girard, OH 44420
Attention: Theodore C. Rogers
Telephone No.: (330) 545-4311
Telecopy No.: (330) 545-2027
40
<PAGE> 47
with a copy to:
Roetzel & Andress
1375 E. Ninth Street
One Cleveland Center, 10th Floor
Cleveland, Ohio 44114
Attention: Howard Groedel
Telephone: 216-623-0150
Facsimile: 216-623-0134
and
Skadden, Arps, Slate, Meagher & Flom LLP
Four Embarcadero Center, Suite 3800
San Francisco, California 94111
Attention: Kenton J. King
Telephone: 415-984-6400
Facsimile: 415-984-2698
Section 9.5 Interpretation. When a reference is made in this
Agreement to an Article, Section or Annex, such reference shall be to an
Article, Section or Annex of this Agreement unless otherwise indicated. Whenever
the words "include" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." As used in this
Agreement, the term "affiliates" shall have the meaning set forth in Rule 12b-2
of the Exchange Act. As used in this Agreement, the term "Person" shall mean a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Entity or other entity or organization.
Section 9.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 9.7 Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the documents and the instruments referred to herein
and therein): (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) other than Sections 6.8 and 6.11
hereof, is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
Section 9.8 Severability. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms
41
<PAGE> 48
and provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction or other authority declares that
any term or provision hereof is invalid, void or unenforceable, the parties
agree that the court asking such determination shall have the power to reduce
the scope, duration, area or applicability of the term or provision, to delete
specific words or phrases, or to replace any invalid, void or unenforceable term
or provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
Section 9.9 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 9.10 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any direct or indirect wholly owned Subsidiary of Parent.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
Section 9.11 Enforcement of this Agreement. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, such remedy being in addition to
any other remedy to which any party is entitled at law or in equity.
[SIGNATURE PAGES FOLLOW]
42
<PAGE> 49
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
CARADON INC.
By: /s/Robert B. Leckie
-------------------------------------------------
Name: Robert B. Leckie
Title: Vice President
E ACQCO INC.
By: /s/Robert B. Leckie
--------------------------------------------------
Name: Robert B. Leckie
Title: President
EASCO, INC.
By: /s/Norman E. Wells, Jr.
--------------------------------------------------
Name: Norman E. Wells, Jr.
Title: President and Chief Executive Officer
43
<PAGE> 50
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other
provisions of the Offer, and in addition to (and not in limitation of)
Purchaser's rights to extend and amend the Offer at any time in its sole
discretion (subject to the provisions of this Agreement), Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate or amend the Offer as to any Shares
not then paid for, if (i) any applicable waiting period under the HSR Act has
not expired or been terminated, (ii) the Minimum Condition has not been
satisfied, or (iii) at any time on or after the date of this Agreement and
before the time of acceptance for payment for any such Shares, any of the
following events shall have occurred and be continuing:
(a) there shall be threatened (in writing) or pending any
suit, action or Proceeding by any Governmental Entity against Purchaser, Parent,
the Company or any Subsidiary of the Company (i) challenging the acquisition by
Parent or Purchaser of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Agreement or
the Stockholder Agreements, (ii) seeking to impose material limitations on the
ability of Purchaser, or render Purchaser unable, to accept for payment, pay for
or purchase some or all of the Shares pursuant to the Offer and the Merger,
(iii) seeking to impose material limitations on the ability of Purchaser or
Parent effectively to acquire, hold or exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares purchased by
it on all matters properly presented to the Company's shareholders, (iv) seeking
to prohibit or restrict the ownership or operation by Parent or the Purchaser
(or any of their respective affiliates or subsidiaries) of any portion of its or
the Company's business or assets which is material to the business of the
Company and its Subsidiaries or of the Parent and its Subsidiaries or compel
Parent or Purchaser (or any of their respective affiliates or subsidiaries) to
dispose of or hold separate any portion of its or the Company's business or
assets which is material to the business of the Company and its Subsidiaries or
of Parent and its Subsidiaries; (v) seeking to impose any material limitations
on the ability of Parent or Purchaser or any of their respective affiliates or
subsidiaries effectively to control in any material respect the business and
operations of the Company and its subsidiaries, or (vi) which otherwise is
reasonably likely to have a Company Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated, or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of a
Governmental Entity, to the Offer or the Merger, or any other action shall be
taken by any Governmental Entity, other than the application to the Offer or the
Merger of applicable waiting periods under the HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (vi) of paragraph (a) above;
A-1
<PAGE> 51
(c) there shall have occurred (i) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (ii) any limitation (whether or not
mandatory) by any United States governmental authority on the extension of
credit generally by banks or other financial institutions, (iii) a change in
general financial, bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United States to
extend credit or syndicate loans, (iv) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange,
over-the-counter market or The Nasdaq Stock Market for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market conditions), or
(v) in the case of any of the foregoing existing at the time of the commencement
of the Offer, a material acceleration or worsening thereof;
(d) since March 31, 1999, there shall have occurred any change
that constitutes a Company Material Adverse Effect (or there shall have been any
development that is reasonably likely to result in a Company Material Adverse
Effect);
(e) (i) the Board of Directors or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or Purchaser its
approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any Takeover Proposal or (ii) the Company shall have
entered into any agreement in principle or definitive agreement with respect to
any Takeover Proposal or shall have exercised its rights in accordance with
Section 5.1(b) with respect to a Takeover Proposal;
(f) any of the representations and warranties of the Company
set forth in this Agreement shall not be true and correct (without reference to
any materiality qualification contained therein) in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of this Agreement and as of the scheduled expiration of the Offer
except for any breach that individually or in the aggregate, together with all
other breaches, could not reasonably be expected to have a Company Material
Adverse Effect;
(g) the Company shall have failed to perform in any material
respect any obligation, or to comply with any agreement or covenant to be
performed or complied with by it, under this Agreement; or
(h) this Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Parent
and Purchaser, may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to such condition (including any action or inaction by
Parent or Purchaser) and may be waived by Parent or Purchaser in whole or in
part at any time and from time to time in the sole discretion of Parent or
Purchaser, subject in each case to the terms of this Agreement. The failure by
Parent or
A-2
<PAGE> 52
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
A-3
<PAGE> 1
EXHIBIT (c)(2)
STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT (the "Agreement") is entered into
as of July 28, 1999 by and between Caradon Inc., a Delaware corporation
("Parent"), E Acqco Inc., a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Purchaser"), and American Industrial Partners Capital
Fund, L.P., a stockholder (the "Stockholder") of Easco, Inc., a Delaware
corporation (the "Company").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of July 28, 1999 (the "Merger Agreement"), by and among Parent, Purchaser and
Company, it is proposed that Purchaser will make a tender offer (the "Offer") to
acquire any and all shares of the issued and outstanding common stock, $.01 par
value (the "Common Stock"), of the Company and that, following the Offer,
Purchaser will be merged with and into the Company (the "Merger") and, as a
result of the Merger, the separate corporate existence of Purchaser shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"); and
WHEREAS, the Company, as the Surviving Corporation of the
Merger, will become an indirect wholly owned subsidiary of Parent; and
WHEREAS, in order to induce Parent and Purchaser to enter into
the Merger Agreement, which they otherwise would not do, Stockholder has agreed
to execute and deliver to Parent this Agreement; and
WHEREAS, prior to the date hereof, Parent and Stockholder had
no agreement, arrangement or understanding (as defined in Section 203 of the
Delaware General Corporation Law (the "DGCL")) for the purpose of acquiring,
holding, voting or disposing of shares of Common Stock; and
WHEREAS, in consideration for the agreements contained herein,
prior to the date hereof, and prior to the time at and date on which Parent
became or may become an "interested stockholder" for purposes of Section 203 of
the DGCL, the board of directors of the Company has approved the agreement of
Stockholder to vote as provided in Section 2 of this Agreement and not to
transfer shares of Common Stock as provided in Section 4 of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used and not defined herein
shall have the meanings in the Merger Agreement.
2. TENDER AND VOTING; FURTHER ASSURANCES. Stockholder hereby
1
<PAGE> 2
irrevocably agrees, for the period from the date hereof through the Effective
Time or the date on which the Merger Agreement is terminated in accordance with
its terms, whichever is earlier (such period being hereinafter referred to as
the "Term"), (a) to tender all of the Subject Securities (as defined below) into
the Offer and (b) to vote all of the Subject Securities owned by it (i) in favor
of the approval and adoption of the Merger Agreement and the transactions
contemplated thereby and (ii) against (A) any Takeover Proposal by any third
party and (B) the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement): (1) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or its subsidiaries; (2) a sale, lease or transfer of a
material amount of assets of the Company or its subsidiaries or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its Subsidiaries; (3)(w) any change in the majority of the board of directors of
the Company; (x) any change in the present capitalization of the Company or any
amendment of the Company's Certificate of Incorporation; (y) any other change in
the Company's corporate structure or business; or (z) any other action; which,
in the case of the matters referred to in clauses (w), (x), (y) or (z) above, is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, discourage or materially adversely affect the contemplated economic
benefits to Parent of the Merger or the transactions contemplated by the Merger
Agreement or this Agreement.
3. IRREVOCABLE PROXY. STOCKHOLDER HEREBY GRANTS TO, AND
APPOINTS PURCHASER AND THE PRESIDENT OF PURCHASER AND THE TREASURER OF
PURCHASER, IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OF PURCHASER, AND ANY
INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF PURCHASER AND ANY
OTHER DESIGNEE OF PURCHASER, EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE OR ACT BY WRITTEN
CONSENT WITH RESPECT TO STOCKHOLDER'S SUBJECT SECURITIES IN ACCORDANCE WITH
SECTION 2 HEREOF. THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE, AND STOCKHOLDER WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY IT WITH RESPECT TO THE SUBJECT
SECURITIES.
4. COVENANTS OF STOCKHOLDER. During the Term, and except as
specifically contemplated hereby, Stockholder shall not (i) directly or
indirectly sell, transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Subject Securities, unless the transferee of the
Subject Securities, prior to and as a condition to any transfer of the Subject
Securities, executes and delivers an agreement in substantially the form hereof
or such transfer is otherwise approved in advance in writing by Parent and
Purchaser, (ii) grant any proxies, deposit any Subject Securities into a voting
trust or enter into an agreement with respect to any Subject Securities, (iii)
voluntarily take any action which would have the effect of preventing or
2
<PAGE> 3
inhibiting Stockholder from performing its obligations under this Agreement or
(iv) indirectly, solicit (including by way of furnishing information) or respond
to any inquiries or the making of any proposal by any person or entity (other
than Parent or any affiliate of Parent) with respect to the Company that
constitutes or could reasonably be expected to lead to a Takeover Proposal. If
Stockholder receives any such inquiry or proposal, then it shall promptly inform
Parent of the terms and conditions, if any, of such inquiry or proposal and the
identity of the person making it. Stockholder will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
5. STOCKHOLDER'S REPRESENTATIONS. Stockholder is the record
and beneficial owner of the number of shares of Common Stock (the "Existing
Securities" and together with any shares of Common Stock or other securities
hereafter acquired by Stockholder, the "Subject Securities") set forth on the
signature page to this Agreement. Stockholder does not own any securities of the
Company on the date hereof other than the Existing Securities. Stockholder has
sole voting power and sole power to issue instructions with respect to the
voting of the Existing Securities, sole power of disposition, sole power of
exercise or conversion and the sole power to demand appraisal rights, in each
case with respect to all of the Existing Securities and, on the date of the
Special Meeting (as defined in the Merger Agreement), will have sole voting
power and sole power to issue instructions with respect to the voting of all of
Stockholder's Subject Securities, sole power of disposition, sole power of
exercise or conversion and the sole power to demand appraisal rights, in each
case with respect to all of Stockholder's Subject Securities.
Stockholder has full power and authority to enter into and
perform all its obligations under this Agreement. This Agreement has been duly
and validly executed and delivered by Stockholder and constitutes a valid and
binding agreement of Stockholder, enforceable against Stockholder in accordance
with its terms. Stockholder hereby represents and warrants to Parent and
Purchaser that the execution and delivery of this Agreement by Stockholder does
not, and the performance of Stockholder's obligations under this Agreement will
not, (i) conflict with or violate any law, statute, ordinance, rule, regulation,
order, judgment or decree applicable to Stockholder or by which it or any of its
properties is bound or affected, or (ii) result in any breach of or constitute a
default (or an event which with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of an encumbrance on
any of the Subject Securities, pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Stockholder is a party or by which Stockholder or any of its
Subject Securities are bound or affected, except for any such conflicts,
violations, breaches, defaults or other alterations or occurrences that would
not prevent the performance by such Stockholder of its obligations under
this Agreement.
6. UNDERSTANDING OF THIS AGREEMENT. Stockholder has carefully
read this Agreement and has discussed its requirements, to the extent such
Stockholder believes necessary, with its counsel (which may be counsel to the
Company). Stockholder understands that the parties to the Merger Agreement will
be proceeding in reliance upon this Agreement.
3
<PAGE> 4
7. HEADINGS. The headings of the sections of this Agreement
are inserted for convenience of reference only and do not form a part or affect
the meaning hereof.
8. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be an original,
but all of such counterparts shall together constitute one and the same
instrument.
9. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof and (ii) shall not be assigned by operation of law or
otherwise.
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law.
11. SPECIFIC PERFORMANCE. The parties hereto agree that if any
of the provisions of this Agreement are not performed in accordance with their
specific terms or are otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
12. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
13. AMENDMENT; WAIVERS. This Agreement shall not be amended,
altered or modified except by an instrument in writing duly executed by each of
the parties hereto. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default or
any acquiescence thereto. No single or partial exercise of any such right, power
or privilege shall preclude the further exercise of such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any party hereto, unless made in writing and signed by
the party against whom enforcement of such waiver is sought, and then only to
the extent expressly specified therein.
14. ADDITIONAL ACTIONS AND DOCUMENTS. Each of the parties
hereto hereby agrees to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement.
4
<PAGE> 5
15. TERMINATION. This Agreement, and all rights and
obligations hereunder, shall terminate at the end of the Term.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, or have caused this Agreement to be duly executed and
delivered in their names and on their behalf, as of the date first written
above.
CARADON INC.
By: /s/Robert B. Leckie
--------------------
Name: Robert B. Leckie
Title: Vice President
E ACQCO INC.
By: /s/Robert B. Leckie
--------------------
Name: Robert B. Leckie
Title: President
AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND, L.P.
By: American Industrial Partners, L.P.,
its general partner
By: American Industrial Partners
Management Company, Inc.,
its general partner
By: /s/Theodore C. Rogers
---------------------
Name: Theodore C. Rogers
Title: Chairman
Number of shares owned
beneficially and of record
by Stockholder:
4,239,470
--------------------
5
<PAGE> 1
EXHIBIT (c)(3)
Caradon Inc. and E Acqco Inc. entered into the following Stockholder
Agreement with the following directors and executive officers of Easco, Inc. on
July 28, 1998:
Name Number of Shares
---- ----------------
Robert J. Klein 2,300
Lawrence J. Sax 12,500
Joseph M. Byers 12,500
Terry D. Smith 12,500
Norman E. Wells, Jr. 170,000
Gene Little 3,500
Samuel N. Smith, Jr. 1,000
James R. McKeithan 12,500
STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT (the "Agreement") is entered into
as of July 28, 1999 by and between Caradon Inc., a Delaware corporation
("Parent"), E Acqco Inc., a Delaware corporation and an indirect wholly owned
subsidiary of Parent ("Purchaser"), and , a
stockholder (the "Stockholder") of Easco, Inc., a Delaware corporation (the
"Company").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as
of July 28, 1999 (the "Merger Agreement"), by and among Parent, Purchaser and
Company, it is proposed that Purchaser will make a tender offer (the "Offer") to
acquire any and all shares of the issued and outstanding common stock, $.01 par
value (the "Common Stock"), of the Company and that, following the Offer,
Purchaser will be merged with and into the Company (the "Merger") and, as a
result of the Merger, the separate corporate existence of Purchaser shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"); and
WHEREAS, the Company, as the Surviving Corporation of the
Merger, will become an indirect wholly owned subsidiary of Parent; and
WHEREAS, in order to induce Parent and Purchaser to enter into
the Merger Agreement, which they otherwise would not do, Stockholder has agreed
to execute and deliver to Parent this Agreement; and
WHEREAS, prior to the date hereof, Parent and Stockholder had
no agreement, arrangement or understanding (as defined in Section 203 of the
Delaware General Corporation Law (the "DGCL")) for the purpose of acquiring,
holding, voting or disposing of shares of Common Stock; and
WHEREAS, in consideration for the agreements contained herein,
prior to the date hereof, and prior to the time at and date on which Parent
1
<PAGE> 2
became or may become an "interested stockholder" for purposes of Section 203 of
the DGCL, the board of directors of the Company has approved the agreement of
Stockholder to vote as provided in Section 2 of this Agreement and not to
transfer shares of Common Stock as provided in Section 4 of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used and not defined herein
shall have the meanings in the Merger Agreement.
2. TENDER. Stockholder hereby irrevocably agrees, for the
period from the date hereof through the Effective Time or the date on which the
Merger Agreement is terminated in accordance with its terms, whichever is
earlier (such period being hereinafter referred to as the "Term"), to tender all
of the Subject Securities (as defined below) into the Offer.
3. COVENANTS OF STOCKHOLDER. During the Term, and except as
specifically contemplated hereby, Stockholder shall not (i) directly or
indirectly sell, transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Subject Securities, unless the transferee of the
Subject Securities, prior to and as a condition to any transfer of the Subject
Securities, executes and delivers an agreement in substantially the form hereof
or such transfer is otherwise approved in advance in writing by Parent and
Purchaser, (ii) grant any proxies, deposit any Subject Securities into a voting
trust or enter into an agreement with respect to any Subject Securities, (iii)
voluntarily take any action which would have the effect of preventing or
inhibiting Stockholder from performing his obligations under this Agreement or
(iv) indirectly, solicit (including by way of furnishing information) or respond
to any inquiries or the making of any proposal by any person or entity (other
than Parent or any affiliate of Parent) with respect to the Company that
constitutes or could reasonably be expected to lead to a Takeover Proposal. If
Stockholder receives any such inquiry or proposal, then he shall promptly inform
Parent of the terms and conditions, if any, of such inquiry or proposal and the
identity of the person making it. Stockholder will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
4. STOCKHOLDER'S REPRESENTATIONS. Stockholder is the record
and beneficial owner of the number of shares of Common Stock (the "Existing
Securities" and together with any shares of Common Stock or other securities
hereafter acquired by Stockholder, the "Subject Securities") set forth on the
signature page to this Agreement. Stockholder does not own any securities of the
Company on the date hereof other than the Existing Securities.
Stockholder has full power and authority to enter into and
2
<PAGE> 3
perform all his obligations under this Agreement. This Agreement has been duly
and validly executed and delivered by Stockholder and constitutes a valid and
binding agreement of Stockholder, enforceable against Stockholder in accordance
with its terms. Stockholder hereby represents and warrants to Parent and
Purchaser that the execution and delivery of this Agreement by Stockholder does
not, and the performance of Stockholder's obligations under this Agreement will
not, (i) conflict with or violate any law, statute, ordinance, rule, regulation,
order, judgment or decree applicable to Stockholder or by which he or any of his
properties is bound or affected, or (ii) result in any breach of or constitute a
default (or an event which with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of an encumbrance on
any of the Subject Securities, pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Stockholder is a party or by which Stockholder or any of his
Subject Securities are bound or affected, except for any such conflicts,
violations, breaches, defaults or other alterations or occurrences that would
not prevent the performance by such Stockholder of his obligations under this
Agreement.
5. UNDERSTANDING OF THIS AGREEMENT. Stockholder has carefully
read this Agreement and has discussed its requirements, to the extent such
Stockholder believes necessary, with his counsel (which may be counsel to the
Company). Stockholder understands that the parties to the Merger Agreement will
be proceeding in reliance upon this Agreement.
6. HEADINGS. The headings of the sections of this Agreement
are inserted for convenience of reference only and do not form a part or affect
the meaning hereof.
7. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be an original,
but all of such counterparts shall together constitute one and the same
instrument.
8. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof and (ii) shall not be assigned by operation of law or
otherwise.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law.
10. SPECIFIC PERFORMANCE. The parties hereto agree that if any
of the provisions of this Agreement are not performed in accordance with their
specific terms or are otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at law or equity.
3
<PAGE> 4
11. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
12. AMENDMENT; WAIVERS. This Agreement shall not be amended,
altered or modified except by an instrument in writing duly executed by each of
the parties hereto. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default or
any acquiescence thereto. No single or partial exercise of any such right, power
or privilege shall preclude the further exercise of such right, power or
privilege, or the exercise of any other right, power or privilege. No waiver
shall be valid against any party hereto, unless made in writing and signed by
the party against whom enforcement of such waiver is sought, and then only to
the extent expressly specified therein.
13. ADDITIONAL ACTIONS AND DOCUMENTS. Each of the parties
hereto hereby agrees to take or cause to be taken such further actions, to
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement.
14. TERMINATION. This Agreement, and all rights and
obligations hereunder, shall terminate at the end of the Term.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, or have caused this Agreement to be duly executed and
delivered in their names and on their behalf, as of the date first written
above.
CARADON INC.
By: /s/Robert B. Leckie
-------------------
Name: Robert B. Leckie
Title: Vice President
E ACQCO INC.
By: /s/Robert B. Leckie
-------------------
Name: Robert B. Leckie
Title: President
STOCKHOLDER
---------------------------------
Name:
Address:
Number of shares owned
beneficially and of record
by Stockholder:
--------------------------
5
<PAGE> 1
EXHIBIT (c)(4)
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT, dated as of June 10, 1999
(this "Agreement"), is made by and between Easco, Inc., a Delaware corporation
("Easco," which term shall, for purposes of this Agreement, include its
subsidiaries) and Caradon Inc. ("Buyer," which term shall, for purposes of this
Agreement, include Caradon plc and all of its subsidiaries).
WHEREAS, Easco is prepared to furnish Buyer with certain
information that is confidential, proprietary or otherwise not publicly
available to assist in an evaluation (the "Evaluation") in connection with a
possible business combination transaction involving Easco and Buyer (a
"Transaction").
NOW, THEREFORE, as a condition to, and in consideration of,
Easco furnishing to Buyer Information (as defined herein), Easco and Buyer agree
as follows:
1. Nondisclosure of Information. Subject to Section 2, Buyer
agrees that, in connection with information it receives from Easco, Buyer will
(a) keep the Information confidential, (b) not use the Information in any manner
detrimental to Easco and (c) not use the Information other than in connection
with the Evaluation. Notwithstanding the preceding sentence, Buyer may disclose
Information to those of its Representatives (as defined herein) as are assisting
Buyer with the Evaluation; provided, however, that Buyer will first (i) inform
each of its Representatives receiving Information of the confidential nature of
the Information and of the obligations imposed by this Agreement and (ii) direct
its Representatives to treat the Information confidentially and in accordance
with the obligations imposed by this Agreement and not to use the Information
other than in connection with the Evaluation. Buyer will be responsible for (A)
any failure by Buyer or any of its Representatives (including, without
limitation, Representatives who, subsequent to the first date of disclosure of
Information hereunder, cease to be its Representatives) to treat the Information
confidentially and in accordance with the obligations imposed by this Agreement
or (B) the use by Buyer or by any of its Representatives or former
Representatives of the Information other than in connection with the Evaluation.
Subject to Section 2, without the prior written consent of Easco, neither Buyer
nor its Representatives will disclose to any person (1) that Information has
been made available to Buyer or its Representatives, (2) that discussions
relating to a Transaction are taking place or have terminated, or (3) any of the
terms, conditions or other facts with respect to such discussions, the
Evaluation or any Transaction.
2. Notice Preceding Compelled Disclosure. If Buyer or any of
its Representatives is legally compelled, pursuant to a subpoena, civil
investigative demand, regulatory demand or similar process, to disclose any
Information provided by or on behalf of Easco or which relates to Easco, Buyer
will promptly notify Easco to permit Easco to seek a protective order or take
other appropriate action. Buyer will also cooperate in all reasonable efforts by
Easco to obtain a protective order or other reasonable assurance that
confidential treatment will be accorded the Information. If, in the absence of a
<PAGE> 2
protective order, Buyer or any of its Representatives is compelled to disclose
Information as a matter of law (including as a matter of federal or state
securities law) or pursuant to the rules and policies of any securities
exchange, Buyer may disclose only that part of the Information as is required by
law to be disclosed (in which case, prior to such disclosure, Buyer will advise
and consult with Easco and its counsel as to such disclosure and the nature and
wording of such disclosure), and, if Easco seeks a protective order or takes
other action to obtain confidential treatment for any Information so disclosed,
Buyer or its Representatives will not oppose such efforts of Easco.
3. Treatment of Information. As soon as possible upon the
written request of Easco or upon the termination by either Easco or Buyer of the
Evaluation or the discussions relating to a Transaction, Buyer and its
Representatives will destroy (or, at their option, return to Easco) all
Information which has been provided in tangible form by or on behalf of Easco,
together with all copies thereof, as well as all Information that incorporates
information provided by or on behalf of Easco. Such destruction (or return) will
be confirmed in writing to Easco. Any Information not so destroyed (or returned)
will remain subject to this Agreement. Buyer acknowledges that it is aware and
that its Representatives have been or will be advised by it that the United
States securities laws prohibit any person who has material, non-public
information from purchasing or selling securities based on such information or
from communicating such information to any other person.
4. Public Information. This Agreement will not apply to such
portions of the Information that (a) are or become generally available to the
public through no action by Buyer or by Buyer's Representatives or (b) are or
become available to Buyer or Buyer's Representatives from a source, other than
Easco or its Representatives, which source Buyer believes, based upon reasonable
inquiry, is not prohibited from disclosing such portions by a contractual, legal
or fiduciary obligation or (c) Buyer or its Representatives can prove was
obtained as a result of work which is independent of and not based on any of the
Information.
5. No Warranty of Accuracy. Buyer understands that Easco will
endeavor to include in the Information materials it believes to be relevant for
the Evaluation, but Buyer acknowledges that neither Easco nor any of its
Representatives makes any representation or warranty as to the accuracy or
completeness of any Information. Neither Easco nor any of its Representatives
will have any liability to Buyer or its Representatives resulting from the use
of the Information, except for use of the Information in breach of this
Agreement.
6. Certain Actions. (a) During the course of the Evaluation,
neither Buyer nor its Representatives will initiate contact with any director,
officer, employee or person known to hold securities of Easco (other than
persons specifically authorized by Easco) regarding any matter relating to a
Transaction. If the Evaluation or the discussions relating to a Transaction are
terminated for any reason, Buyer and its Representatives will cease, during the
Restricted Period (as defined below), all such contacts, whether or not
previously authorized.
-2-
<PAGE> 3
(b) As of the date hereof, except as previously disclosed in
writing to Easco, Buyer is not the beneficial owner of any securities of Easco
entitled to be voted generally in the election of directors or any direct or
indirect options or other rights to acquire any such securities ("Voting
Securities"). During the period beginning on the date of this Agreement and
ending two years after the effectiveness of any Termination Notice (the
"Restricted Period"), except as specifically requested in writing by Easco,
neither Buyer nor any of its Representatives as a principal will propose,
induce, or enter into or agree to enter into, singly or with any other person or
directly or indirectly, (i) any form of business combination, acquisition or
other similar transaction relating to Easco, (ii) any form of restructuring,
recapitalization or similar transaction with respect to Easco, or (iii) any
demand, request or proposal, or any request for consent, to amend, waive or
terminate any provision of this Section 6. Furthermore, during the Restricted
Period, except as specifically requested in writing by Easco and except, as to a
Representative, as contemplated by the last sentence of this Section 6(b),
neither Buyer nor any of its Representatives as a principal will, singly or with
any other person or directly or indirectly, (1) acquire, or offer, propose or
agree to acquire, by tender offer, purchase or otherwise, any Voting Securities,
(2) make, or in any way participate in, any solicitation of proxies with respect
to any Voting Securities (including by the execution of action by written
consent), (3) become a participant in any election contest with respect to
Easco, (4) seek to influence any person with respect to the voting or
disposition of any Voting Securities, (5) demand a copy of Easco's list of
stockholders or its other books and records, (6) participate in or encourage the
formation of any partnership, syndicate or other group that owns or seeks or
offers to acquire beneficial ownership of any Voting Securities or that seeks to
affect control of Easco or for the purpose of circumventing any provision of
this Agreement, or (7) otherwise act (including by providing financing for
another person) to seek or to offer to control or influence, in any manner, the
management, Board of Directors or policies of Easco. The provisions of clause
(1) of the immediately preceding sentence are subject, as to a Representative of
Buyer that is a financial advisor engaged by Buyer and is also a securities
firm, to the fact that such financial advisor may from time to time acquire
Voting Securities, for its own account or the account of customers, and,
accordingly, may hold positions in Voting Securities.
(c) During the Restricted Period, neither Buyer nor its
Representatives will directly or indirectly solicit (other than by means of
general advertisement or solicitation) for employment any of the current
directors, officers or managers of Easco with whom initial contact was made, or
who were specifically identified by Easco, during the course of the Evaluation
(other than, in the case of a Representative, employment of any such person in
the regular course of the Representative's hiring practices and not arising by
reason of the Evaluation, and in the case of Buyer, employment of any such
person in the regular course of Buyer's hiring practices done by employees of
Buyer not aware of this Agreement).
(d) The provisions of this Section 6 will survive for two
years after the effectiveness of any Termination Notice notwithstanding that
some or all of the Information has become publicly disclosed or that any portion
of this Agreement has become inoperative as to any portion of the Information.
-3-
<PAGE> 4
7. Certain Obligations Only on Definitive Agreement. Easco and
Buyer agree that unless and until a Definitive Agreement regarding a Transaction
has been executed and delivered by each of Easco and Buyer and each other party
thereto, neither Easco nor Buyer will be under any legal obligation of any kind
with respect to any Transaction by virtue of this Agreement or any other written
or oral expression with respect to any Transaction. Except as provided in
Section 6 of this Agreement, Easco and its Representatives will be free to
conduct the process for pursuing any possible business combination transaction
as they determine in their discretion (including, without limitation, changing
any procedures relating to a Transaction, or negotiating with and entering into
a Definitive Agreement with any other person, without in any such case prior
notice to Buyer). Either Easco or Buyer may terminate the Evaluation and any
discussions relating to a Transaction only upon furnishing notice to the other
(a "Termination Notice"), which Termination Notice shall become effective
immediately upon the date that it is actually received. Notwithstanding any
other provision of this Agreement, neither Easco nor Buyer will terminate the
Evaluation or any discussions relating to a Transaction except by delivering a
Termination Notice as provided in the immediately preceding sentence, and no
such Termination Notice will alter any provision of this Agreement (unless the
other party expressly agrees in writing). Except as provided in Section 6 of
this Agreement, neither Easco nor Buyer will have any claim against the other or
any of its Representatives arising out of or relating to any Transaction other
than those claims, if any, as parties to a Definitive Agreement and then only in
accordance with the terms of such Definitive Agreement.
8. General Provisions. This Agreement will be deemed to be
effective as of the earlier to occur of (a) the date Information was first
disclosed by or on behalf of Easco in connection with the Evaluation or (b) the
date first written above. No failure or delay in exercising any right hereunder
will operate as a waiver thereof, nor will any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right. This Agreement, any amendment to this Agreement, or any waiver of
rights or any notice or consent hereunder will be operative for purposes of this
Agreement only if it is in writing and is signed by a Chairman, President or
duly authorized Vice President or Director of the party in whose name it is
signed. This Agreement may be executed in multiple counterparts, each of which
will be deemed an original for all purposes and all of which will constitute a
single instrument. This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective affiliates, successors and assigns.
Buyer acknowledges that Easco may be irreparably injured by any violation of the
terms of this Agreement; accordingly, Easco will be entitled to seek specific
performance and injunctive relief as remedies for any violation, in addition to
all other remedies available at law or equity. Buyer consents to personal
jurisdiction in any action brought in any federal or state court within the
State of Delaware having subject matter jurisdiction in the matter for purposes
of any action arising out of this Agreement.
-4-
<PAGE> 5
This Agreement will be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to the principles of conflict of
laws thereof.
9. Certain Definitions. As used in this Agreement, (a) the
terms "affiliate," "beneficial owner," "election contest," "group,"
"participant," "person," "proxy," "security," and "solicitation" (and the
plurals thereof) will be ascribed a meaning no less broad than the broadest
definition or meaning of such terms under the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder, (b) all
information furnished to Buyer as contemplated by this Agreement, whether in
oral, written or electronic form and whether furnished by Easco or Easco's
Representatives, together with all written or electronic documentation prepared
by Easco or its Representatives based upon, reflecting or incorporating, in
whole or in part, such information or the Evaluation, as well as the fact that
Easco and Buyer are considering a Transaction and performing the Evaluation, is
herein referred to as the "Information," (c) any director, officer, employee,
agent, lender, partner or representative, including, without limitation, any
accountant, consultant, attorney or financial advisor engaged by either Easco or
Buyer, is herein referred to as a "Representative," and (d) a written agreement
providing for a Transaction that is executed by or on behalf of Easco and Buyer
and that states it is intended to be, and is specifically identified as, a
Definitive Agreement for purposes of this Agreement is herein referred to as a
"Definitive Agreement."
-5-
<PAGE> 6
IN WITNESS WHEREOF, each of Easco and Buyer has caused this
Agreement to be executed by its duly authorized officers as of the day and year
first above written.
EASCO, INC.
By: /s/ TERRY D. SMITH
Name: Terry D. Smith
Title: Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
CARADON INC.
By: /s/ ROBERT B. LECKIE
Name: Robert B. Leckie
Title: Vice President and General
Counsel Caradon, Inc.
-6-
<PAGE> 1
EXHIBIT (c)(5)
[CARADON PLC LETTERHEAD]
28 July 1999
Easco, Inc.
706 South State Street
Girard, Ohio 44420
Gentlemen:
In reference to the Agreement and Plan of Merger between Caradon Inc., E Acqco
Inc., and Easco, Inc. dated as of this same date (the "Merger Agreement"),
Caradon plc hereby assures Easco, Inc. that, from the date hereof until the
Effective Time of Merger, at which time this Letter Agreement will terminate,
Caradon plc will cause Caradon Inc. to fulfill its obligations under the Merger
Agreement, including by providing sufficient capital to Caradon Inc. to allow
for the timely consummation of the Offer and the Merger. Capitalized terms used
herein and not otherwise defined are defined in the Merger Agreement.
Yours sincerely,
Caradon plc
/s/Martin Clark
Martin Clark
Group Finance Director
