Exhibit 10.1

 

Execution Version

 

PRIVATE & CONFIDENTIAL

 

To:

 

Gaming Acquisitions Limited

3 The Maltings,

Wetmore Road,

Burton-On-Trent,

Staffordshire, DE14 1SE

 

(the “Company” or “you”)

 

Attention:Daniel Silvers, Stewart Baker and Carys Damon

 

11 June 2019

 

Dear Sirs

 

Project Chaucer – Commitment Letter

 

We are pleased to set out in this letter and in the Term Sheet (as defined
below) appended to this letter the terms and conditions on which we are willing
to arrange and underwrite a £240,000,000 senior facilities comprising of a £140
million senior term loan facility (“Facility B1”), a €90 million senior term
loan facility (“Facility B2”) (Facility B1 and Facility B2 together, “Facility
B”), and a £20 million multicurrency senior revolving credit facility (the
“Revolving Facility”, and together with Facility B, the “Senior Facilities”) in
such amounts and proportions as are specified in paragraph 2 (Appointment) below
or, in each case, such lesser amounts as may be required as a consequence of the
operation of paragraph 2 (Appointment) below.

 

The Senior Facilities are to be provided in connection with the refinancing or
otherwise discharging of the Inspired Group’s existing debt with HG Vora (the
“Refinancing”) and the direct acquisition (the “Acquisition”) of each of the
following:

 

(a)the entire issued share capital of Astra Games Ltd., a private limited
liability company incorporated under the laws of England and Wales having its
registered office at Astra House, 1 Kingsway, CF31 3RY Bridgend, United Kingdom,
registered with company number 09280224;

 

(b)the entire issued share capital of Bell-Fruit Group Limited, a private
limited liability company incorporated under the laws of England and Wales
having its registered office at Astra House, 1 Kingsway, CF31 3RY Bridgend,
United Kingdom, registered with company number 05015596;

 

(c)the entire issued share capital of Gamestec Leisure Limited, a private
limited liability company incorporated under the laws of England and Wales
having its registered office at Astra House, 1 Kingsway, CF31 3RY Bridgend,
United Kingdom, registered with company number 05348584;

 

(d)the entire issued share capital of Harlequin Gaming Limited, a private
limited liability company incorporated under the laws of England and Wales
having its registered office at Astra House, 1 Kingsway, CF31 3RY Bridgend,
United Kingdom, registered with company number 09292082;

 

 

 

 

(e)60 A ordinary shares of GBP 1.00 each, being sixty per cent. (60%) of the
issued shares in the capital of Innov8 Gaming Limited, a private limited
liability company incorporated under the laws of England and Wales having its
registered office at Astra House, 1 Kingsway, CF31 3RY Bridgend, United Kingdom,
registered with company number 10717040; and

 

(f)the entire issued share capital of Playnation Limited, a private limited
liability company incorporated under the laws of England and Wales having its
registered office at Unit 17 Berkeley Court, Manor Park, Runcorn, Cheshire, WA7
1TQ, registered with company number 08258418,

 

(collectively, the “Target” and together with their subsidiaries, the “Target
Group”) by Inspired Gaming (UK) Limited.

 

Our commitments are provided on the basis of, and are subject to, the terms and
conditions set out in:

 

(a)this letter;

 

(b)the term sheet in respect of the Senior Facilities attached to this letter as
Appendix A (Term Sheet) (the “Term Sheet”);

 

(c)the fee letter between the parties to this letter dated on or around the date
of this letter relating to the Senior Facilities (the “Fee Letter”); and

 

(d)the syndication strategy letter relating to the Senior Facilities between the
parties to this letter dated on or around the date of this letter (the
“Syndication Strategy Letter”),

 

paragraphs (a) to (d) above, together, as such documents may be amended, amended
and restated, supplemented, modified or replaced from time to time, the
“Commitment Documents”.

 

In the Commitment Documents, references to:

 

“Acquisition Agreement” shall mean the share purchase agreement between
Novomatic UK Ltd. as seller and Inspired Gaming (UK) Limited as purchaser
governing the Acquisition.

 

“Acquisition Closing Date” shall mean the date on which the Acquisition is
completed in accordance with the terms of the Acquisition Agreement.

 

“Business Day” shall mean a day (other than Saturday or Sunday) on which banks
are open for general business in New York and London.

 

“Closing Date” shall mean the earlier of the Acquisition Closing Date and the
date of the Refinancing.

 

“Group” shall mean Inspired Entertainment Inc. and its subsidiaries from time to
time.

 

2

 

 

“Transaction” means the Acquisition and the Refinancing.

 

Words and expressions defined in the Term Sheet, the Fee Letter or the
Syndication Strategy Letter (as applicable) have the same meanings when used in
this letter unless otherwise provided or the context otherwise requires. In
addition, in this letter and the other Commitment Documents, unless otherwise
provided or if the context requires, a reference to “we”, “us”, “our” or the
like shall be construed as a reference to the Arrangers and/or the Underwriters
named on the signature pages of this letter acting individually or, subject to
paragraph 2.3 below, together as the context requires.

 

1.FINANCING AND COMMITMENT

 

1.1It is acknowledged and agreed by the parties to this letter that:

 

(a)counsel to the Company will provide a first draft of the Senior Facilities
Agreement (as defined below) to counsel to the Physical Bookrunner on or prior
to 17 June 2019;

 

(b)counsel to the Company will provide a copy of the Senior Facilities Agreement
(as defined below) in the agreed form that can be distributed to potential
lenders to counsel to the Physical Bookrunner on or prior to 24 June 2019;

 

(c)counsel to the Physical Bookrunner will provide a first draft of the
Intercreditor Agreement (as defined below) to counsel to the Company on or prior
to 17 June 2019;

 

(d)counsel to the Physical Bookrunner will provide a copy of the Intercreditor
Agreement (as defined below) in the agreed form that can be distributed to
potential lenders to counsel to the Company on or prior to 24 June 2019; and

 

(e)it is the parties’ intention that they will negotiate the facilities
agreement relating to the Senior Facilities (the “Senior Facilities Agreement”)
and related intercreditor agreement (the “Intercreditor Agreement”) and other
Finance Documents (under and as defined in the Senior Facilities Agreement) in
good faith to reflect the provisions set out in the Commitment Documents and use
all reasonable endeavours to execute the Senior Facilities Agreement, the
Intercreditor Agreement and the other Finance Documents within one month (or
such longer date as may be mutually agreed) from the date of this letter (the
“Proposed Signing Date”).

 

1.2If, despite negotiation in good faith and the use of all reasonable
endeavours, the Senior Facilities Agreement, the Intercreditor Agreement and the
other Finance Documents have not been agreed by the parties prior to the
Proposed Signing Date, then on the date falling 5 Business Days thereafter the
parties each undertake to sign a Senior Facilities Agreement and an
Intercreditor Agreement which will contain:

 

(a)provisions which reflect the provisions of the Commitment Documents; and

 

(b)with respect to:

 

(i)the Senior Facilities Agreement, in relation to any matter which is not (or
which is only partially) dealt with in the Commitment Documents, but which is
dealt with under a senior facilities agreement which will be based on and
consistent with the agreed recent European “covenant-loose” facilities
agreement, a redacted copy of which has been provided by counsel to the Physical
Bookrunner to counsel to the Company (the “SFA Precedent”), amended to reflect
the terms set out in the Term Sheet, the legal, capital structure and
jurisdiction of the Transaction, the Target Group and the provisions of the
Commitment Documents); and

 

3

 

 

(ii)the Intercreditor Agreement, in relation to any matter which is not (or
which is only partially) dealt with in the Commitment Documents, but which is
dealt with in an intercreditor agreement, which will be based on and consistent
with an intercreditor agreement entered into in connection with the agreed
recent European “covenant-loose” facilities agreement, a redacted copy of which
intercreditor agreement has been provided by counsel to the Physical Bookrunner
to counsel to the Company (“ICA Precedent”) (amended to reflect the terms set
out in the Term Sheet, the legal, capital structure and jurisdiction of the
Transaction, the Target Group and the provisions of the Commitment Documents);

 

in each case, on the basis that:

 

(A)the thresholds and basket levels applicable to the representations,
undertakings and events of default in the Senior Facilities Agreement and the
Intercreditor Agreement (as the case may be) will be based on the SFA Precedent
and the ICA Precedent (together, the “Precedent Agreements”) respectively and
sized taking into account input from the management of the Target Group as to
the anticipated operational requirements and flexibility of the Target Group
following completion of the Transaction; and

 

(B)to the extent such thresholds and basket levels cannot be agreed between the
parties, the baskets and thresholds will be based on the corresponding baskets
and thresholds in the relevant Precedent Agreements proportionately increased or
decreased to reflect the difference in the EBITDA and gross assets of the target
group to which the Precedent Agreements relate at the time of their acquisition
to the EBITDA and gross assets of the Target Group (ascertained by reference to
the latest available audited or unaudited financial statements of the Target
Group) as amended as necessary to reflect the legal, capital structure and
jurisdiction of the Transaction and provided that no such thresholds or basket
levels in the Senior Facilities Agreement shall be more onerous for the Group
than those set out in the SFA Precedent; and

 

(c)in relation to any other matter in respect of the Senior Facilities Agreement
or the Intercreditor Agreement which is not dealt with (or which is only
partially) dealt with as provided in paragraphs (i) to (ii) above, the relevant
language shall be such option or language as is reasonably requested by you, or
if you do not specify any option or language within 5 Business Days of the date
of a written request by us, such option or language reasonably requested by us.

 

4

 

 

1.3The first draft of the Senior Facilities Agreement will, unless otherwise
agreed, be prepared by the Company’s lawyers on a basis that is consistent with
the approach described in paragraphs 1.1 and 1.2 above.

 

1.4The first draft of the Intercreditor Agreement will, unless otherwise agreed,
be prepared by the Arrangers’ lawyers on a basis that is consistent with the
approach described in paragraphs 1.1 and 1.2 above.

 

2.APPOINTMENT

 

2.1On acceptance of the offer set out in this letter and subject to the terms of
this letter (including paragraph 13.3 below) and except as otherwise provided in
the Commitment Documents, the Company:

 

(a)appoints us and we agree to act as (subject to paragraph 2.3 below) the
exclusive arrangers, underwriters and bookrunners of the Senior Facilities (in
such capacities, the “Arrangers”, “Underwriters” and “Bookrunners”, as
applicable);

 

(b)appoints Nomura International plc in its capacity as Bookrunner to act as the
exclusive physical bookrunner of the Senior Facilities (the “Physical
Bookrunner”); and

 

(c)subject to paragraph 13.2 below, agrees that it will not (and it shall
procure that no other member of the Group will) appoint additional arrangers,
underwriters, bookrunners or original lenders of the Senior Facilities and will
not award other titles or pay compensation (other than that set out in the Fee
Letters) to any person in connection with the Senior Facilities or the financing
of the Transaction with the Senior Facilities without our prior written consent,
it being understood that any breach of this paragraph (c) by a shareholder of
the Company will be deemed to constitute a breach of this paragraph (c) by the
Company for all purposes under the Commitment Documents.

 

2.2The Underwriters shall underwrite the Senior Facilities in the proportions
detailed next to their names in the table below (the “Commitments”):

 

Entity  Facility B1   Facility B2   Revolving Facility  Nomura International
plc  £126,000,000   €81,000,000   £18,000,000  Macquarie Corporate Holdings Pty
Limited (UK Branch)  £14,000,000   €9,000,000   £2,000,000  Total 
£140,000,000   €90,000,000   £20,000,000 

 

5

 

 

2.3Our obligations under the Commitment Documents are several. No Arranger is
responsible for the obligations of any other Arranger. No Underwriter is
responsible for the obligations of any other Underwriter. No Bookrunner is
responsible for the obligations of any other Bookrunner.

 

3.CONDITIONS

 

3.1Our commitment to arrange and manage and to act as Arrangers, Underwriters
and Bookrunners in connection with the primary syndication of the Senior
Facilities and to underwrite the relevant proportion of the Senior Facilities to
be arranged and/or underwritten by us, on the terms and subject to the
conditions set out in the Commitment Documents, is subject only to satisfaction
of the following conditions:

 

(a)negotiation, execution and delivery of the Senior Facilities Agreement and
the Intercreditor Agreement (in form and substance satisfactory to you and us
(each acting reasonably)) in accordance with paragraphs 1.1 and 1.2 above;

 

(b)there being no event or circumstance in relation to the provision of the
Senior Facilities which would result in us acting contrary to any applicable
law, regulation, treaty or official directive applicable to us; and

 

(c)compliance by the Company and its affiliates with the terms and conditions of
the Commitment Documents in all material respects.

 

3.2We confirm that:

 

(a)we have completed and are satisfied with the results of:

 

(i)all client identification procedures in respect of the addressee of this
letter that we are required to carry out in connection with making the Senior
Facilities available in connection with the Transaction in compliance with all
applicable laws, regulations and internal requirements (including, without
limitation, all applicable money laundering rules and know your customer
requirements); and

 

(ii)all due diligence which has been carried out by us, or on our behalf, in
respect of making the Senior Facilities available in connection with the
Transaction and other agreed purposes and that we have no further due diligence
requirements;

 

(b)we have obtained all necessary approvals (including final credit committee
approvals and all other relevant internal approvals) to allow us to arrange and
underwrite the Senior Facilities to be arranged and/or underwritten by us in the
amounts specified in this letter and do not require any further internal credit
sanctions or other approvals in order to arrange and underwrite the Senior
Facilities in such amounts; and

 

(c)we have waived or have received, reviewed and are satisfied with the form of
(A) each of the Reports (as defined in Schedule 3 of the Term Sheet), (B) the
Acquisition Agreement and (C) the financial statements of Inspired Entertainment
Inc. for the first quarter 2019 and the financial information relating to the
Target Group in the Reports, in each case, in such form provided to us on or
prior to the date of this letter and that we will accept in satisfaction of any
condition precedent to availability of the Senior Facilities requiring delivery
of that document a final version of the document which is not different in
respects which are materially adverse to our interests under the Senior
Facilities (as applicable) compared to the version of the document accepted by
us pursuant to this paragraph.

 

6

 

 

3.3Notwithstanding that the Company may not be able to procure an act or matter
by an affiliate of it which is expressly stated in the Commitment Documents as
an act or matter which the Company is required to procure, failure to procure
such act or matter will be deemed to be a breach of the terms of the Commitment
Documents by the Company if such act or matter is not satisfied, effected or
complied with as contemplated in the Commitment Documents.

 

4.FEES, COSTS AND EXPENSES

 

4.1All of our fees, costs and expenses and the fees, costs and expenses of the
Agent and the Security Agent shall be paid in accordance with the provisions of
a Fee Letter or as set out in the Term Sheet.

 

4.2Subject to paragraph 4.3 below and save as otherwise provided in the Fee
Letter, no fees (including, for the avoidance of doubt, arrangement,
underwriting, market participation, ticking and commitment fees), costs or
expenses will be payable if the Closing Date does not occur.

 

4.3Reasonable and properly incurred legal costs, expenses and disbursements in
connection with the drafting and the negotiating and execution of the Commitment
Documents and the Finance Documents and syndication any other pre-agreed costs
or expenses, in each case, up to an amount agreed between us will be payable by
the Company even if the Closing Date does not occur.

 

5.PAYMENTS

 

5.1All payments to be made under the Commitment Documents:

 

(a)shall be paid in the currency of invoice and in immediately available, freely
transferable cleared funds to such account with such bank(s) that we notify to
the Company with at least five (5) Business Days’ prior written notice;

 

(b)shall be paid without set off or counterclaim and free and clear from any
deduction or withholding for or on account of tax (a “Tax Deduction”) unless a
Tax Deduction is required by law; and

 

(c)are exclusive of any value added tax or similar charge (“VAT”).

 

5.2If a Tax Deduction is required to be made by law, the amount of the payment
due shall be increased to an amount which (after making any Tax Deduction)
leaves an amount equal to the payment which would have been due if no Tax
Deduction had been required. You agree to indemnify us for the full amount of
any Tax Deduction and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Tax Deduction was
correctly or legally asserted.

 

7

 

 

5.3If VAT is chargeable, the Company shall also and at the same time pay to the
recipient of the relevant payment an amount equal to the amount of the VAT
against delivery of invoices and receipts as the Company may reasonably require
in order to duly account for such VAT in accordance with applicable laws.

 

6.INFORMATION

 

6.1At the times set out in paragraph 6.2 below, the Company represents and
warrants to us that, to its knowledge:

 

(a)any material written factual information (taken as a whole including any
written factual information (taken as a whole) contained in the Information
Memorandum (as such term is defined in the Syndication Strategy Letter))
provided to us by, or on behalf of it, any member of the Group, or any member of
the Target Group in connection with the Transaction (the “Information”) is true
and accurate in all material respects on the date the Information is dated
(where applicable) and/or as at the date (if any) at which the Information
therein is provided and/or stated to be given;

 

(b)nothing has occurred or been omitted and no information has been given or
withheld that results in the Information being untrue or misleading in any
material respect in light of the circumstances under which such statements were
or are made; and

 

(c)any financial projections contained in the Information have been prepared in
good faith on the basis of recent historical information and on the basis of
reasonable assumptions (it being understood that such projections may be subject
to significant uncertainties and contingencies, many of which are beyond the
control of the Company, and that no assurance can be given that the projections
will be realised).

 

6.2The representations and warranties set out in paragraph 6.1 above are deemed
to be made by the Company on the date of this letter and by reference to the
facts and circumstances then existing on the date thereof (or otherwise, on
which or for the period for which, the relevant Information or projections are
expressed to relate to).

 

6.3The Company shall promptly notify us in writing upon it becoming aware that
any representation or warranty set out in this paragraph 6 (Information) would
be incorrect or misleading in any material respect if repeated after the date of
this letter and agrees to supplement the information promptly from time to time
to ensure that each such representation and warranty would be so correct if so
repeated.

 

6.4The Company acknowledges that we will be relying on the Information without
carrying out independent verification.

 

6.5The representations and warranties in paragraph 6.1 above will be superseded
by those in the Senior Facilities Agreement once signed by the parties thereto.

 

8

 

 

7.INDEMNITY

 

7.1Whether or not the Senior Facilities Agreement is signed, the Company shall
within 10 Business Days of demand indemnify and hold harmless us and any of our
respective affiliates and any of our (or their respective affiliates’)
directors, officers, agents, advisers and employees (as applicable) in each case
in our capacity as an Arranger, Underwriter, Bookrunner, Physical Bookrunner
and/or Original Lender (each an “Indemnified Person”) against any cost, expense,
loss, liability (including, except as specified below without limitation, legal
fees and limited, in the case of legal fees and expenses, to one counsel to such
Indemnified Persons taken as a whole and in the case of a conflict of interest,
one additional counsel to the affected Indemnified Persons similarly situated,
taken as a whole (and, if reasonably necessary one local counsel in any relevant
jurisdiction)) incurred by or awarded against such Indemnified Person in each
case arising out of or in connection with any action, claim, investigation or
proceeding (including, without limitation, any action, claim, investigation or
proceeding to preserve or enforce rights), commenced or threatened, relating to
this letter, the Commitment Documents, the Finance Documents, the Senior
Facilities or the Transaction or the use or proposed use of proceeds of the
Senior Facilities or the arranging or underwriting of the Senior Facilities or
syndication of the Senior Facilities, except to the extent such cost, expense,
loss or liability resulted:

 

(a)directly from the fraud, gross negligence or wilful misconduct of such
Indemnified Person or results from such Indemnified Person breaching a term of
any of its obligations under the Commitment Documents, the Senior Facilities
Agreement and/or any other Finance Document or any confidentiality undertaking
given by that Indemnified Person; or

 

(b)from or relates to any disputes solely among Indemnified Persons and not
arising out of any act or omission of the Company).

 

7.2The Contracts (Rights of Third Parties) Act 1999 shall apply to this
paragraph 7 so that each Indemnified Person may rely on it, subject always to
the terms of paragraphs 8 (Third Party Rights) and 19 (Governing Law And
Jurisdiction).

 

7.3We shall not have any duty or obligation, whether as fiduciary for any
Indemnified Person or otherwise, to recover any payment made or required to be
made under paragraph 7.1.

 

7.4No Indemnified Person shall be responsible or have any liability to the
Company or any of its affiliates or anyone else for consequential losses or
damages.

 

8.THIRD PARTY RIGHTS

 

8.1Except as otherwise expressly provided in the Commitment Documents, the terms
of the Commitment Documents may be enforced only by a party to such Commitment
Documents and the operation of the Contracts (Rights of Third Parties) Act 1999
is excluded.

 

8.2Notwithstanding any term of the Commitment Documents, no consent of a third
party is required for any termination or amendment of the relevant Commitment
Documents.

 

9

 

 

9.CONFIDENTIALITY

 

9.1Each of the parties to this letter acknowledges that the Commitment Documents
and all Confidential Information (as defined below) are confidential and no
party to this letter shall (and each party shall ensure that none of its
affiliates shall), without the prior written consent of each of the other
parties to this letter, disclose the Commitment Documents or their contents or
any Confidential Information to any other person except:

 

(a)as required by law or as requested by any applicable governmental or other
regulatory authority or by any applicable stock exchange or if required in
connection with any legal, administrative or arbitration proceedings provided
the person to whom the Commitment Documents or Confidential Information is to be
given is informed of its confidential nature and that some or all of such
Confidential Information may be price-sensitive information except that there
shall be no requirement to so inform if, in the opinion of that disclosing party
(acting reasonably and in good faith), it is not practicable so to do in the
circumstances;

 

(b)to its affiliates and each of their (or their respective affiliates)
respective directors, officers, advisers, employees, agents and professional
advisers and representatives of each of the foregoing and their respective
employees on a confidential and need-to-know basis for the purposes of the
Senior Facilities provided that the person to who the Confidential Information
is to be given has been made aware of and agreed to be bound by the obligations
under this paragraph or are in any event subject to confidentiality obligations
as a matter of law or professional practice;

 

(c)that the parties to this letter may disclose any Commitment Document or any
Confidential Information to any of its affiliates or to any bank, financial
institution or other person and any of their respective affiliates and advisers
with whom it is discussing the transfer, assignment or participation of any
commitment or obligation under any Commitment Document provided that:

 

(i)if such person is not listed on the Approved List or is not a person to whom
a transfer, assignment or participation may be made as contemplated in section
5.50 (Assignment / Transfers and Sub-Participation by Lenders) of Part 5 (Other
Terms) of the Term Sheet, it must obtain the prior written consent of the
Company prior to providing the Confidential Information to such person; and

 

(ii)the person to whom the Confidential Information is to be given has entered
into a confidentiality undertaking (as defined below) except that there shall be
no requirement for a confidentiality undertaking if the recipient is a
professional adviser and is subject to professional obligations to maintain the
confidentiality of the Confidential Information;

 

(d)that the Company may make the Commitment Documents (other than the Fee Letter
or the Syndication Strategy Letter) available to the management of the Target
Group, each vendor or seller (howsoever described) under the Acquisition
Agreement (the “Vendors”) and each of their professional advisers in connection
with the Acquisition, provided that they have been made aware of and agree to be
bound by the obligations under this paragraph or are in any event subject to
confidentiality obligations as a matter of law or professional practice;

 

10

 

 

(e)that the Company may make the Commitment Documents available to any person
who may join as an Arranger, Underwriter, Bookrunner or Original Lender of the
Senior Facilities pursuant to paragraph 13.2 of this letter and each of their
professional advisers in connection with the Transaction, provided that they
have been made aware of and agree to be bound by the obligations under this
paragraph or are in any event subject to confidentiality obligations as a matter
of law or professional practice;

 

(f)to rating agencies who have been made aware of, and agree to be bound by, the
obligations under this paragraph or are in any event subject to confidentiality
obligations as a matter of law or professional practice; and

 

(g)as part of any “due diligence” defence where the recipients have been made
aware of, and agree to be bound by, the obligations under this paragraph or are
in any event subject to confidentiality obligations as a matter of law or
professional practice.

 

9.2In this letter:

 

(a)“affiliate” means in relation to a person a holding company or subsidiary of
that person or any other subsidiary of that holding company and in the case of
any limited partnership, any entity (including any other limited partnership)
which owns or controls or is owned or controlled by the first limited
partnership or is under common ownership or control with the first limited
partnership; and

 

(b)“Confidential Information” means:

 

(i)the Commitment Documents and all of their terms; and

 

(ii)all information relating to the Company, the Target Group, the Transaction,
the Finance Documents and/or the Senior Facilities which is provided to us (the
“Receiving Party”) in relation to the Transaction, the Finance Documents, the
Senior Facilities, the Company, the Target Group or any of their affiliates or
advisers (the “Providing Party”), in whatever form, and includes information
given orally and any document, electronic file or any other way of representing
or recording information which contains or is derived or copied from such
information but excludes information that:

 

(A)is or becomes public information other than as a direct or indirect result of
any breach by the Receiving Party of a confidentiality agreement to which that
Receiving Party is party; or

 

(B)is identified in writing at the time of delivery as non-confidential by the
Providing Party; or

 

11

 

 

(C)is known by the Receiving Party before the date the information is disclosed
to the Receiving Party by the Providing Party or is lawfully obtained by the
Receiving Party after that date, from a source which is, as far as the Receiving
Party is aware, unconnected with the Providing Party or the Target Group and
which, in either case, as far as the Receiving Party is aware, has not been
obtained in breach of, and is not otherwise subject to, any obligation of
confidentiality;

 

(c)“confidentiality undertaking” means a confidentiality undertaking
substantially in a recommended form of the Loan Market Association or in any
other form agreed between us; and

 

(d)“subsidiary” means an entity of which a person has direct or indirect control
or owns directly or indirectly more than 50% of the share capital or similar
right of ownership and control for this purpose means the power to direct the
management and policies of the entity whether through the ownership of share
capital, contract or otherwise.

 

10.PUBLICITY/ANNOUNCEMENTS

 

10.1All publicity in connection with the Senior Facilities shall be managed
jointly by the Arrangers and the Company.

 

10.2No announcements regarding the Senior Facilities or any of our roles as
Arranger, Underwriter, Bookrunner or Original Lender (as the case may be) shall
be made without our prior written consent and each of the other Arrangers and
Underwriters arranging or underwriting the relevant Senior Facility and the
Company.

 

11.CONFLICTS

 

11.1The provisions of this paragraph 11 (Conflicts) are without prejudice to and
subject to the obligations of the parties under paragraph 9 (Confidentiality).

 

11.2We agree that we will use the Confidential Information supplied by the
Company (or any other person on the Company’s behalf) in connection with the
Transaction for the sole purpose of providing advice and/or financing in our
capacity as one of the Arrangers, Underwriters and Bookrunner of the Senior
Facilities to the Company and its affiliates.

 

11.3We and the Company acknowledge that we and our affiliates may not act in
more than one capacity in relation to this transaction and may not provide debt
financing, equity capital or other services to other persons with whom the
Company or their affiliates may have conflicting interests in respect of the
Transaction and the Senior Facilities provided that this prohibition shall not
apply to us or our affiliates to the extent that the exclusivity arrangements
entered into with you and/or your affiliates related to the performance of other
advisory roles in connection with your participation in the Transaction have
terminated.

 

11.4Neither the relationship described in this letter nor the services provided
by us or any of our respective affiliates to you or any other matter will,
subject at all times to the provisions of paragraph 11.3 above, give rise to any
fiduciary, equitable or contractual duties (including, without limitation, any
duty of confidence) which could prevent or hinder us or our respective
affiliates providing similar services to other customers, or otherwise acting on
behalf of other customers or for their own account. However, we shall not use
any Confidential Information in connection with providing services to other
persons or furnish such information to such other persons. We shall not, nor
shall any of our respective affiliates, be required to account to you for any
payment, remuneration, profit or benefit it obtains as a result of acting in the
ways referred to above or as a result of entering into any transaction with you
or providing services to you.

 

12

 

 

11.5We agree that we shall not use any Confidential Information in connection
with providing services to other persons or furnish such information to such
other persons.

 

11.6The Company acknowledges that we have no obligation to use any information
obtained from another source for the purposes of the Senior Facilities or to
furnish such information to the Company or its affiliates.

 

11.7We reserve the right to employ the services of certain of our respective
affiliates (the “Arranger Affiliates”) in providing services incidental to the
provision of the Senior Facilities and to the extent we employ the services of
such an Arranger Affiliate, we will procure that our Arranger Affiliate performs
its obligations as if such Arranger Affiliate was a party to this letter in the
relevant capacity. The Company agrees that (notwithstanding paragraph 9
(Confidentiality)) in connection with the provision of such services, we and our
Arranger Affiliates may share with each other any Confidential Information or
other information relating to the Company and the Target Group, subject to the
Arranger Affiliates agreeing to keep confidential any such Confidential
Information or other information to the extent it is confidential.

 

12.NO ASSIGNMENTS

 

12.1Subject to the other provisions of this paragraph 12 (No Assignments) we
shall not assign any of our rights or transfer any of our rights or obligations
under the Commitment Documents other than to any of our respective affiliates
without the prior written consent of the other parties (and any attempted
assignment or transfer without such consent shall be null and void).

 

12.2The Company shall not assign any of its rights or transfer any of its rights
or obligations under the Commitment Documents.

 

12.3We may delegate any or all of our rights and obligations under the
Commitment Documents to any of our affiliates (each a “Delegate”) and may
designate any Delegate as responsible for the performance of its appointed
functions under the Commitment Documents, but we shall remain responsible for
the performance by each Delegate of any such functions under the Commitment
Documents and for any loss or liability suffered by you or a result of such
Delegate’s failure to perform such obligations.

 

13

 

 

13.TERMINATION

 

13.1Our commitments and other obligations set out in this letter shall become
effective only if the offer contained in this letter is accepted in writing by
the Company in the manner set out in paragraph 13.3 below, and such commitment
and obligations shall otherwise expire and terminate on the earliest of:

 

(a)11.59 p.m. on the date which falls 5 Business Days after the Acquisition
Closing Date;

 

(b)11.59 p.m. on the date falling nine months from the date of this letter (as
such time and date may be extended from time to time with our consent (acting
reasonably));

 

(c)the date on which the Senior Facilities Agreement and the Intercreditor
Agreement are signed by all the relevant parties thereto;

 

(d)the date on which the Company (or any affiliate) determines and notifies us
in writing (which notification shall be provided as soon as reasonably
practicable after making such determination) that:

 

(i)the Company has conclusively withdrawn or terminated its bid for the Target
Group;

 

(ii)the Company’s offer for the Target Group has been conclusively rejected;

 

(iii)the Company is conclusively excluded or rejected from the sale process by
the Vendors for any reason or the Vendors terminate definitively such sale
process or enter into a sale and purchase agreement in respect of the Target
Group with a bidder other than the Company or any of its affiliates; or

 

(iv)the Acquisition Agreement is terminated prior to the Acquisition Closing
Date by either party thereto in accordance with its terms; and

 

(e)with respect to the commitments and obligations of all or any parties to this
letter as the Company may elect at its sole discretion, from the date on which
the Company terminates its obligations under this letter with respect to any
such parties, which the Company shall have the right to do upon at least 3
Business Days prior written notice if Nomura International plc in its capacities
as Arranger, Underwriter, Bookrunner and/or Original Lender is in breach of any
material provision of the Commitment Documents; and

 

(f)only with respect to the commitments and obligations of Macquarie Corporate
Holdings Pty Limited (UK Branch), the date on which the Company terminates its
obligations with respect to Macquarie Corporate Holdings Pty Limited (UK Branch)
under this letter, which the Company shall have the right to do upon at least 3
Business Days prior written notice if Macquarie Corporate Holdings Pty Limited
(UK Branch) is in breach of any material provision of the Commitment Documents,

 

or, in each case, such later date as agreed by us.

 

14

 

 

13.2Notwithstanding paragraph 13.1, if the Company exercises its termination
rights pursuant to paragraphs (e) or (f) of paragraph 13.1 above in respect of
an Arranger, Underwriter, Bookrunner or Original Lender (the “Defaulting Finance
Party”), the Company’s rights against and obligations to any other Arrangers,
Underwriters, Bookrunner and Original Lenders (other than the Defaulting Finance
Party) under the Commitment Documents shall remain in full force and effect,
provided that, within fifteen (15) Business Days of such termination, you shall
have the right, following consultation with the Arrangers (other than the
Defaulting Finance Party), to appoint additional Arrangers, Bookrunners,
Original Lenders and Underwriters in respect of the respective commitments of
the Defaulting Finance Party, on the same terms contained within the Commitment
Documents and on the same economics as the Defaulting Finance Party.

 

13.3If the Company does not accept the offer made by us in this letter by
signing and scanning counter-signed copies of:

 

(a)this letter;

 

(b)the Fee Letter; and

 

(c)the Syndication Strategy Letter,

 

to the contacts identified on the signature pages below before 11.59 pm (in
London) on the date of this letter, such offer shall terminate on that date.

 

14.SURVIVAL

 

The rights and obligation of the parties hereto under this paragraph and
paragraphs 4 (Fees, Costs And Expenses), 5 (Payments), 6 (Information), 7
(Indemnity), 8 (Third Party Rights), 9 (Confidentiality), 10
(Publicity/Announcements), 11 (Conflicts), 12 (No Assignments), 15 (Remedies and
Waivers) to 19 (Governing Law And Jurisdiction) inclusive shall survive and
continue after any expiry or termination of our obligations (including any of
our permitted successors and assigns) under the Commitment Documents but shall:

 

(a)in the case of paragraphs 6 (Information), 7 (Indemnity) and 9
(Confidentiality), terminate on the execution of the Senior Facilities Agreement
to the extent that substantially equivalent provisions are contained therein
(but without prejudice to the accrued rights and obligations at the time of
termination); and

 

(b)to the extent the Senior Facilities Agreement is not signed, in the case of
paragraph 9 (Confidentiality), terminate on the second anniversary of the date
of this letter.

 

15.REMEDIES AND WAIVERS

 

The failure to exercise or delay in exercising a right or remedy under the
Commitment Documents will not constitute a waiver of that right or remedy or a
waiver of any other right or remedy and no single or partial exercise of any
right or remedy will preclude any further exercise of that right or remedy, or
the exercise of any other right or remedy. Except as expressly provided in the
Commitment Documents, the rights and remedies contained in the Commitment
Documents are cumulative and not exclusive of any rights or remedies provided by
law.

 

15

 

 

16.PARTIAL INVALIDITY

 

If, at any time, any provision of the Commitment Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will in any way be affected or impaired.

 

17.ENTIRE AGREEMENT

 

17.1The Commitment Documents set out the entire agreement between us with
regards to the arranging and underwriting of the Senior Facilities and the
managing of primary syndication of the Senior Facilities and supersede any prior
oral and/or written understandings or arrangements relating to the Senior
Facilities.

 

17.2Any provision of the Commitment Documents may only be amended or waived by
way of a written amendment or waiver signed by the Company and us (or, if
applicable, the Agent acting at our direction).

 

18.COUNTERPARTS

 

The Commitment Documents may be executed in any number of counterparts and all
those counterparts taken together shall be deemed to constitute one and the same
Commitment Document. Delivery of a counterpart of a Commitment Document by email
attachment shall be an effective mode of delivery.

 

19.GOVERNING LAW AND JURISDICTION

 

19.1Each Commitment Document and any non-contractual obligations arising out of
or in connection with it shall be governed by and construed in accordance with
English law.

 

19.2For our benefit only, you agree that the courts of England have exclusive
jurisdiction to settle any disputes in connection with the Commitment Documents
and any non-contractual obligation arising out of or in connection with it and
you accordingly submit to the jurisdiction of the English courts.

 

19.3Each of the parties to this letter further agrees:

 

(a)to waive any objection to the English courts on grounds of inconvenient forum
or otherwise as regards proceedings in connection with the Commitment Documents
and any non-contractual obligation arising out of or in connection with the
Commitment Documents;

 

(b)that a judgment or order of an English court in connection with the
Commitment Documents and any non-contractual obligation arising out of or in
connection with it is conclusive and binding on it and may be enforced against
it in the courts of any other jurisdiction; and

 

(c)that nothing in this paragraph 19 (Governing Law and Jurisdiction) limits our
right to bring proceedings against the Company in connection with the Commitment
Documents and any non-contractual obligation arising out of or in connection
with the Commitment Documents:

 

(i)in any other court of competent jurisdiction; or

 

(ii)concurrently in more than one jurisdiction.

 

19.4We acknowledge that the Company may seek specific performance by us and any
other finance parties (howsoever described) in respect of our commitments and of
our agreement to enter into and to make advances under the Finance Documents for
the funding of the Transaction in addition to any other available remedies and
that damages are not an adequate remedy with respect to these matters.

 

(The rest of this page is intentionally left blank)

 

16

 

 

Yours faithfully,

 

/s/ Patrice Maffre

  For and on behalf of
Nomura International plc
as Arranger       Name:          Patrice Maffre   Title:            Managing
Director   Address:     1 Angel Lane, London, EC4R 3AB,
                     United Kingdom   Email:           patrice.maffre@nomura.com
     

/s/ Patrice Maffre

  For and on behalf of
Nomura International plc
as Underwriter       Name:        Patrice Maffre   Title:          Managing
Director   Address:   1 Angel Lane, London, EC4R 3AB,                    United
Kingdom   Email:         patrice.maffre@nomura.com      

/s/ Patrice Maffre

  for and on behalf of   Nomura International plc   as Bookrunner       Name:
      Patrice Maffre   Title:         Managing Director  

 

(Project Chaucer - Signature Page to the Commitment Letter)

 

 

 

 

/s/ Camelia Robu

  /s/ Timothy Tan for and on behalf of     Macquarie Corporate Holdings Pty
Limited (UK Branch)     as Arranger           Name: Camelia Robu  

Timothy Tan

Title: Managing Director   Associate      

/s/ Camelia Robu

 

/s/ Timothy Tan

for and on behalf of     Macquarie Corporate Holdings Pty Limited (UK Branch) as
Underwriter           Name: Camelia Robu   Timothy Tan Title: Managing Director
 

Associate

     

/s/ Camelia Robu

 

/s/ Timothy Tan

for and on behalf of     Macquarie Corporate Holdings Pty Limited (UK Branch)  
  as Bookrunner           Name: Camelia Robu   Timothy Tan Title: Managing
Director   Associate

 

(Project Chaucer - Signature Page to the Commitment Letter)

 

 

 

 

We acknowledge and agree to the above.

 

/s/ Carys Damon

  For and on behalf of   Gaming Acquisitions Limited
as the Company by:    

Name: Carys Damon

  Title: Director   Date: June 11, 2019  

 

(Project Chaucer - Signature Page to the Commitment Letter)

 

 

 

 

Execution Version

 

APPENDIX A

 

TERM SHEET FOR PROJECT CHAUCER

 

This is the “Term Sheet” referred to in the commitment letter dated 11 June 2019
between the Arrangers and Underwriters named therein and Gaming Acquisitions
Limited as it may be amended, amended and restated, supplemented, modified or
replaced from time to time (the “Commitment Letter”) and to which this term
sheet is attached. Unless otherwise defined in this term sheet, capitalised
terms used in this term sheet and not defined herein have the meanings given to
them in the Commitment Letter, the Precedent ICA or the Precedent SFA (as
applicable).

 

Part 1:      £140 MILLION FACILITY B1   1.1      Facility: Term loan facility B1
(Facility B1).     1.2      Amount: £140 million.     1.3      Currency: GBP.  
  1.4      Borrower: Gaming Acquisitions Limited.     1.5      Ranking:
Guaranteed and secured as set out in Part 5 (Other Terms) and ranking pari passu
with (i) each other facility under the Senior Facilities Agreement (as defined
below) and (ii) any existing or future first secured unsubordinated Financial
Indebtedness of the Obligors, and ahead of any other Financial Indebtedness of
the Obligors (as defined below).     1.6      Maturity Date: The date falling
eighty-four (84) months after the date of the first utilisation under the Senior
Facilities Agreement (the Closing Date).       1.7      Purpose:

To be applied directly or indirectly, in or towards,:

 

(a)       satisfaction of the consideration payable for the Acquisition;

 

(b)       the payment of Acquisition Costs;

 

(c)       refinancing or otherwise discharging existing Inspired Group debt (the
“Existing Facilities”) and paying any breakage costs, redemption premium,
make-whole costs and other fees, costs and expenses payable in connection with
such refinancing and/or acquisition; and

 

(d)       financing other related amounts, including fees, costs and expenses,

 

in each case, as set out in the Funds Flow Memorandum.

    1.8      Availability Period: On and from the date the Senior Facilities
Agreement is signed to the end of the Certain Funds Period.     1.9      Maximum
Number of Loans:

Facility B1: One

 

Facility B2: One

    1.10    Repayment: Bullet repayment on the Maturity Date.     1.11   Call
Protection: The Senior Facilities Agreement shall include a soft call provision
at 101% which applies for the first 6 months from the Closing Date only to
voluntary prepayments of Facility B. No prepayment fee shall be due with respect
to any participations being refinanced directly or indirectly from the proceeds
of any indebtedness in respect of which the relevant Facility B Lender is an
arranger, underwriter or a lender, as the case may be.     1.12    LIBOR Floor:
Zero.

 

Page 1

 

 

Part 2:      €90 Million FACILITY B2   2.1      Facility: Term loan facility B2
(Facility B2 and together with Facility B1, Facility B).     2.2      Amount:
€90 million.     2.3      Currency: EUR.     2.4      EURIBOR Floor: Zero.    
2.5      Other Terms: All other terms to reflect the terms in paragraphs 1.4 to
1.12 (inclusive) under  Part 1 (£140 million Facility B1).

 

Page 2

 

 

Part 3:      £20 MILLION MULTICURRENCY REVOLVING FACILITY

 

3.1      Facility: Revolving credit facility (the Revolving Facility or RCF)
which may be utilised by way of:      

(a)       loans;

 

(b)       letters of credit; and

 

(c)       Ancillary Facilities (as defined below).

    3.2      Amount: £20 million or its equivalent in any Optional Currency.    
3.3      Optional Currencies: EUR, USD and others agreed with all the Lenders.  
  3.4      Borrower: Gaming Acquisitions Limited and Inspired Gaming (UK)
Limited     3.5      Issuing Bank: A bank capable of issuing letters of credit
and bank guarantees to be appointed.1     3.6      Ranking: Guaranteed and
secured as set out in Part 5 (Other Terms) and ranking pari passu with (i) each
other facility under the Senior Facilities Agreement (as defined below) and (ii)
any existing or future first secured unsubordinated Financial Indebtedness of
the Obligors, and ahead of any other Financial Indebtedness of the Obligors (as
defined below).     3.7      Maturity Date: The date falling sixty-six (66)
months after the Closing Date.     3.8      Purpose: Cash drawings under the
Revolving Facility to be applied to directly or indirectly finance or refinance
the general corporate purposes and/or working capital requirements of the Group
(including, without limitation, the financing or refinancing of capital
expenditure, any permitted acquisitions, investments and joint ventures,
operational restructurings and reorganisation requirements of the Group, any
additional OID or other fees and any related fees, costs and expenses).    
3.9      Conditions to Utilisation: The Revolving Facility may not be utilised
unless Facility B has been utilised or will be utilised on the same date.    
3.10   Availability Period: From the first utilisation of Facility B to the date
falling one month prior to the Maturity Date for the RCF set out above.    
3.11    Maximum Number of Utilisations: No more than 10 utilisations may be
outstanding.

 

 

 

 

1 Macquarie will not act as Issuing Bank.

 

Page 3

 

 

3.12    Repayment: Each loan shall be repaid on the last day of its Interest
Period, subject to standard rollover mechanics if no Facility incurred under the
Senior Facilities Agreement has been accelerated following an Event of Default
and no Event of Default with respect to non-payment or insolvency is continuing.
    3.13    Ancillary Facilities: An Ancillary Facility may be made available on
a bilateral basis and on normal commercial terms by a consenting Lender or an
affiliate of a Lender to a Borrower or a Subsidiary of a Borrower which is a
member of the Group (and not, for the avoidance of doubt, an Unrestricted
Subsidiary) in place of all or part of that Lender’s participation in the
Revolving Facility.       Ancillary Facilities may consist of overdraft,
guarantee, letter of credit, short term loan, derivatives or foreign exchange
facilities or any other facility or accommodation agreed between the Company and
the relevant Lender.   3.14    EURIBOR/LIBOR Floor: Zero.     3.15    Cleandown
None.

 

Page 4

 

 

Part 4:      PRICING   4.1      Agency Fee: To be separately agreed with the
Agent and set out in a fee letter.     4.2      Security Agent Fee: To be
separately agreed with the Security Agent and set out in a fee letter.    
4.3      Other Fees: As set out in the Fee Letters.     4.4      Commitment Fee:
Revolving Facility: 30% of the applicable Margin per annum on the unused and
uncancelled amount of the Revolving Facility for the applicable Availability
Period. Accrued commitment fee is payable quarterly in arrear during the
relevant Availability Period, on the last day of the relevant Availability
Period and on the cancelled amount of the Revolving Facility at the time a full
cancellation is effective.     4.5      Margin:

Subject to the Margin Ratchet (as defined below):

 

Facility B1: 5.50% per annum.

 

Facility B2: 5.00% per annum.

      RCF: 5.50% per annum.     4.6      Margin Ratchet:

Provided that:  

 

(a)       no Event of Default is continuing;

 

(b)       the third full Quarter since the Closing Date has expired; and

 

(c)       Total Net Leverage Ratio is within a range set out below, the Margin
in respect of Facility B and the RCF shall vary as set out below (it being
understood that the Margin may reduce by more than one level at any one time):  

 

  Total Net Leverage Ratio  

Facility B1 Margin
(% per annum)

  Facility B2Margin
(% per annum)  

RCF Margin
(% per annum)

 

Greater than or equal to [●]:12

  5.50   5.00   5.50                   Less than [●]:13 but greater than or
equal to [●]:14   5.25   4.75   5.25                   Less than [●]:15    5.00
  4.50   5.00

 

 

 

 

2To be set at 0.5x below opening leverage.

3To be set at 0.5x below opening leverage.

4To be set at 1.0x below opening leverage.

5To be set at 1.0x below opening leverage.

 

Page 5

 

 

 

The Margin ratchet shall be tested by reference to the annual audited
consolidated financial statements and the consolidated quarterly financial
statements and the related compliance certificates, and each Margin adjustment
will be effective on the Business Day on which the Agent receives the compliance
certificate in relation to the relevant annual audited consolidated financial
statements and/or consolidated quarterly financial statements.

 

If the compliance certificate relating to the relevant annual audited
consolidated financial statements shows that a higher rate of Margin should have
applied during a certain period, then the Company shall (or shall ensure the
relevant Borrower shall) pay to the Agent the amount necessary to put the Agent
and the Lenders in the position they would have been in had the appropriate rate
applied during such period.

 

If the compliance certificate relating to the relevant annual audited
consolidated financial statements shows that a lower rate of Margin should have
applied during a certain period, then the amount equal to the difference between
(i) the amount of the interest that the relevant Borrower would have paid in
relation to such period had the correct Margin been applied and (ii) the amount
of the interest that the relevant Borrower actually paid in relation to such
period shall be netted off against the next interest payment in respect of each
applicable loan but only to the extent that the proportionate adjustment is made
against participations in the applicable loans which are held by Lenders which
held such participations during the relevant period.

 

Any decrease or increase in the Margin for a loan shall take effect on the date
which is five Business Days after receipt by the Agent of the relevant
compliance certificate.

 

While an Event of Default is continuing, the Margin for each loan under Facility
B and the RCF shall be the highest rate set out above for a loan under the
relevant facility. Once the relevant Event of Default is no longer continuing,
the Margin will be recalculated on the basis of the most recently delivered
compliance certificate provided with the annual audited consolidated financial
statements or consolidated quarterly financial statements and any applicable
decrease in the Margin will (provided that no other Event of Default is then
continuing) apply with effect from the first Business Day on which the relevant
Event of Default is no longer continuing.

 

Page 6

 

 

4.7      Interest Periods for Loans:

Facility B:Two, three or six months or one month if selected by the Company at
its discretion to the extent necessary or desirable to implement hedging or any
other period agreed between the Company and the Agent (acting on the
instructions of all Lenders in relation to the relevant Loan).

 

RCF: One, two, three or six months or any other period agreed between the
Company and the Agent (acting on the instructions of all Lenders in relation to
the relevant Loan).

 

4.8      Interest on Loans: The aggregate of the applicable:      
(a)      Margin; and       (b)      LIBOR or, in relation to any loan in euro,
EURIBOR.     4.9      Payment of Interest on LCs: Computed at the rate equal to
the applicable Margin payable quarterly in arrear (or such shorter period ending
on the relevant Expiry Date). Accrued LC interest is also payable on the amount
of any reduction in the outstanding amount of a Letter of Credit at the time
that reduction becomes effective.     4.10    Payment of Interest on Loans:
Computed at the rate equal to the applicable Margin payable at the end of each
Interest Period in arrears.     4.11    Issuing Bank Fee: As agreed with the
Issuing Bank (if any).     4.12    Issuance/ Administration Fee: As set out in a
fee letter agreed with the Issuing Bank (if any).

 

Page 7

 

 

Part 5:      other terms   5.1      Documentation:

The Facilities will be made available under a senior facilities agreement which
will be based on and consistent with the agreed recent European “covenant-loose”
facilities agreement, a redacted copy of which has been provided by counsel to
the Arrangers to counsel to the Company (the SFA Precedent) amended to reflect
the terms set out in this term sheet and otherwise in form and substance
satisfactory to the parties thereto (each acting reasonably) (the Senior
Facilities Agreement).

 

An intercreditor agreement (the Intercreditor Agreement) will be entered into
between (among others) the Obligors, the Lenders, the Agent and the Security
Agent and will include, among other things, bail-in provisions. The
Intercreditor Agreement will be based on an intercreditor agreement entered into
in connection with the agreed recent European “covenant-loose” facilities
agreement, a redacted copy of which intercreditor agreement has been provided by
counsel to the Arrangers to counsel to the Company (the ICA Precedent), as
amended to reflect the terms set out in this term sheet (including Schedule 4
(Intercreditor Principles)) and otherwise in form and substance satisfactory to
the parties thereto (each acting reasonably).

 

Other documentation will include the Transaction Security Documents, fee letters
and other ancillary documents (together with the Senior Facilities Agreement and
the Intercreditor Agreement, the Finance Documents).

 

The first draft of the Senior Facilities Agreement shall be prepared by counsel
to the Borrower and the first draft of the Intercreditor Agreement shall be
prepared by counsel for the Lender.

    5.2      Mandated Lead Arrangers: Nomura International plc and Macquarie
Corporate Holdings Pty Limited (UK Branch).     5.3      Lenders: As selected by
the Bookrunner.     5.4      Agent: Lucid Agency Services Limited.    
5.5      Security Agent: Lucid Trustee Services Limited.     5.6      Reference
Banks: Appointment thereof subject, in each case, to the consent of the relevant
entity.     5.7      Group: The Company and its subsidiaries from time to time.
    5.8      Company: Inspired Entertainment Inc.     5.9      Original
Borrowers: Gaming Acquisitions Limited and Inspired Gaming (UK) Limited.

 

Page 8

 

 

5.10    Original Guarantor:

a)       Inspired Entertainment Inc.

 

b)       Inspired Gaming USA Inc.

 

c)       DMWSL 633 Limited

 

d)       DMWSL 632 Limited

 

e)       DMWSL 631 Limited

 

f)        Gaming Acquisitions Limited

 

g)       Inspired Gaming Group Limited

 

h)       Inspired Gaming (Holdings) Limited

 

i)        Inspired Gaming (International) Limited

 

j)        Inspired Gaming (UK) Limited

 

k)       Inspired Gaming (Greece) Limited.

    5.11    Original Obligors: The Original Borrowers and the Original
Guarantors.     5.12    Guarantors: The Original Guarantors and, subject to the
security principles set out in Schedule 1 (Agreed Security Principles) hereto
(the Agreed Security Principles), each Material Company (as defined below) from
time to time and such other members of the Group as are required to ensure that
there are guarantees from members of the Group (excluding any Guarantor that
generates negative EBITDA) who have an aggregate of earnings before interest,
tax, depreciation and amortisation (calculated on the same basis as Consolidated
EBITDA but on an unconsolidated basis and excluding goodwill, all intra-group
items and investments in subsidiaries of any member of the Group) representing
at least 80 % of Consolidated EBITDA of the Group (for this purpose excluding
(i) any members of the Group which are prevented from becoming a Guarantor due
to legal prohibitions or would not be required to become a Guarantor in
accordance with the Agreed Security Principles, (ii) any on-balance sheet joint
ventures and (iii) any Guarantor that generates negative EBITDA) (the Guarantor
Coverage) determined annually based on the audited financial statements of the
Group.     5.13    Material Company:

At any time:

 

(a)       an Obligor;

 

(b)       a member of the Group that holds shares in an Obligor; and

 

(c)       any member of the Group which has earnings before interest, tax,
depreciation and amortisation (calculated on the same basis as Consolidated
EBITDA) on an unconsolidated basis representing 5.0% or more of the Consolidated
EBITDA of the Group.

    5.14    Obligors: The Borrowers and the Guarantors.

 

Page 9

 

 

5.15    Changes to Obligors: A customary mechanism will be included in the
Senior Facilities Agreement to enable any subsidiary of the Company which is
either (i) is incorporated in the same jurisdiction as an existing Borrower,
(ii) is incorporated in England and Wales or the United States of America6 or
(iii) has been approved by all the Lenders of the relevant facility to accede as
borrower. A customary mechanism will also be included to enable Borrowers and
Guarantors to resign.     5.16   Transaction Security:

Subject to the Agreed Security Principles, the guarantee and security package
shall comprise substantially all assets and stock of the Obligors (the documents
in respect of such security together being, the Transaction Security Documents).

 

The backstop date for post-closing guarantees and security to be 90 days
following the Closing Date for members of the Target Group and thereafter 120
days following delivery of the relevant Annual Financial Statements or, as the
case may be, with respect to any newly acquired Material Subsidiaries, following
completion of the relevant acquisitions, provided in each case that a deadline
of 150 days will apply in respect of any new jurisdiction (i.e. a jurisdiction
in which no existing Obligor is located).

    5.17   Initial Conditions Precedent: Conditions precedent to initial
utilisation of Facility B and the RCF during the Certain Funds Period shall be
strictly limited to those set out in Schedule 3 (Conditions Precedent to initial
Utilisation).     5.18   Further conditions precedent: Subject to the initial
conditions precedent, the Lenders will only be obliged to comply with a
utilisation request other than one to which the Certain Funds provisions set out
below apply, if on the proposed utilisation date for that loan (A) in the case
of a RCF rollover loan, (a) no Facility incurred under the Senior Facilities
Agreement has been accelerated following an Event of Default and (b) no  Event
of Default with respect to non-payment or insolvency is continuing and (B) in
the case of any other loan, no Default has occurred and is continuing.    
5.19   Certain Funds:

(a)       Subject to the initial conditions precedent and notwithstanding the
further conditions precedent, during the Certain Funds Period the Lenders will
only be obliged to comply with a utilisation request in respect of a Loan, if on
the date of the utilisation request and on the proposed utilisation date for the
Loan:

 

(i)       no Change of Control has occurred;

 

(ii)       no Major Default is continuing or would result from the proposed
Loan;

 

(iii)     all the Major Representations are true in all material respects (or,
to the extent the underlying representation is already subject to materiality,
in all respects); and

 

(iv)     performance by the relevant Lender of its obligations under the Senior
Facilities Agreement would not result in a mandatory prepayment event as
described in section 5.26(a) (Prepayment and Cancellation) below occurring.

 

 

 

 

6Macquarie will lend to any US borrower via an affiliate of its European entity.
SFA will include ability to designate the appropriate lender.

 

Page 10

 

 

 

(b)       During the Certain Funds Period (save in circumstances where, pursuant
to paragraph (a) above, a Lender is not obliged to comply with a utilisation
request), none of the finance parties shall be entitled to:

 

(i)       cancel any of its Commitments to the extent to do so would prevent or
limit the making of a Loan;

 

(ii)       rescind, terminate or cancel the Senior Facilities Agreement or any
of Facility B or the RCF or exercise any similar right or remedy or make or
enforce any claim under or in respect of any finance documents it may have to
the extent to do so would prevent or limit the making of a Loan;

 

(iii)      refuse to participate in the making of a Loan;

 

(iv)     exercise any right of set-off or counterclaim in respect of a Loan to
the extent to do so would prevent or limit the making of a Loan; or

 

(v)      cancel, accelerate or cause repayment or prepayment of any amounts
owing hereunder or under any other finance document to the extent to do so would
prevent or limit the making of a Loan,

 

provided that immediately on expiry of the Certain Funds Period, all rights,
remedies and entitlements shall be available to the finance parties
notwithstanding that they may not have been used or been available for use
during the Certain Funds Period.

    5.20   Certain Funds Period:

The period beginning on the date of the Senior Facilities Agreement and ending
on (and including) the earliest of:

 

(a)       11.59 p.m. on the date which falls five Business Days after the
acquisition closing date;

 

(b)       11.59 p.m. on the long-stop date under the Acquisition Agreement (as
such time and date may be extended from time to time with the consent of the
Mandated Lead Arrangers (acting reasonably));

 

(c)       11.59 p.m. on the date falling 9 months from the date of the
Commitment Letter (as such time and date may be extended from time to time with
the consent of the Mandated Lead Arrangers (acting reasonably)); and

 

Page 11

 

 

 

(d)       the date on which the Company (or any of its Affiliates) determines
and notifies the Agent in writing (which notification shall be provided as soon
as reasonably practicable after making such determination) that:

 

(i)       the Company has conclusively withdrawn or terminated its bid for the
Target;

 

(ii)      the Company’s offer for the target has been conclusively rejected; or

 

(iii)     the Company is conclusively excluded or rejected from the sale process
by the vendors for any reason or the vendors terminate definitively such sale
process or enter into a sale and purchase agreement in respect of the Target
Group with a bidder other than the Company or any of its Affiliates; or

 

(iv)     the Acquisition Agreement is validly terminated prior to the
acquisition closing date by either party thereto in accordance with its terms.

    5.21    Major Defaults, Undertakings and Representations:

Major Default shall be defined to mean, with respect to the Original Obligors
only (and excluding any procurement obligations on the part of the Original
Obligors with respect to any other member of the Group or the Target Group) any
event or circumstance constituting a Default that is continuing under any of
paragraph (a) (Payment Default), paragraph (c) (Other obligations) insofar as it
relates to a breach of any Major Undertaking, paragraph (d) (Misrepresentation)
insofar as it relates to a breach of any Major Representation in any material
respect, paragraph (i) (Unlawfulness and Invalidity) and paragraphs f
(Insolvency) to (h) (Creditors’ process) (each inclusive) in each case of
Section 5.39 (Events of Default) to this term sheet.

 

Major Representation shall be defined to mean a representation or warranty with
respect to the Original Obligors only (and excluding any procurement obligations
on the part of the Original Obligors with respect to any other member of the
Group or the Target Group) under any of paragraphs (a) (Status) to (e) (Validity
and admissibility in evidence) (inclusive) and paragraph (p) (Anti-Corruption
Law and Sanctions) in each case of Section 5.30 (Representations) to this term
sheet.

 

Major Undertaking shall be defined to mean an undertaking with respect to the
Original Obligors only (and excluding any procurement obligations on the part of
the Original Obligors with respect to any member of the Group or the Target
Group) in each case under any of paragraphs (e) (Anti Corruption and sanctions),
(g) (Restriction on Merger), (h) (No Change of Business), (i) (Restriction on
Acquisitions), (j) (Restrictions on joint ventures), (k) (Holding Company), (n)
(Pari Passu Ranking), (o) (Negative Pledge), (p) (Restriction on Disposals), (r)
(Restriction on Loans and Credit), (s) (Restriction on Dividends and Share
Redemption), (t) (Restriction on Payments under Intra-Group Loans and any other
Subordinated Debt), (w) (Restriction on Financial Indebtedness), (x)
(Restriction on Guarantees and Indemnities) and (y) (Restriction on Issuance of
Share Capital) in each case of Section 5.35 (General Undertakings) to this term
sheet.

 

Page 12

 

 

5.22    Incremental Facilities: A mechanism will be included in the Senior
Facilities Agreement to enable the Company to establish additional term and
revolving facilities up to an amount equal to the spare capacity in the “Credit
Facilities Basket” (as set out below) (each incremental term facility being, an
Incremental Term Facility, each revolving incremental facility being, an
Incremental Revolving Facility and such facilities together being, the
Incremental Facilities) made available by consenting institutions which, if
established, will be made available under the Senior Facilities Agreement, will
rank pari passu with the other facilities thereunder. Guarantors of an
Incremental Facility ranking pari passu with Facility B and the RCF in relation
to the Transaction Security under the terms of the Intercreditor Agreement shall
also be Guarantors of Facility B and the RCF and the obligations under Facility
B and the RCF shall be secured by the same Transaction Security granted in
favour of any such pari passu Incremental Facility (subject in all cases to the
Agreed Security Principles). The ability to establish Incremental Facilities
will be subject to compliance with the conditions set out in Section 5.24
(Conditions to incurrence of Incremental Facility / Permitted Alternative Debt)
below.     5.23    Permitted Alternative Debt: In addition to the Incremental
Facilities but subject to Section 5.24 (Conditions to incurrence of Incremental
Facility / Permitted Alternative Debt) below, permission to incur additional
debt as loans, bonds or other debt instruments (including assumed debt, acquired
debt, acquisition debt and refinancing debt) outside of the Senior Facilities
Agreement ranking pari passu with or subordinated to Facility B (the Permitted
Alternative Debt). Guarantors of debt ranking pari passu with or subordinate to
Facility B and the RCF in relation to the Transaction Security under the terms
of the Intercreditor Agreement shall also be Guarantors of Facility B and the
RCF and the obligations under Facility B and the RCF shall be secured by the
same Transaction Security granted in favour of any such pari passu debt (subject
in all cases to the Agreed Security Principles). No creditor of Permitted
Alternative Debt shall be entitled to share in any of the Transaction Security
which is shared with the creditors of Facility B and the RCF or in the benefit
of any provisions of the Intercreditor Agreement unless such creditor (or its
representative) has acceded to the Intercreditor Agreement.7

 

 

 

 

7SA Note: All unsecured creditors of Financial Indebtedness that constitutes
Permitted Alternative Debt (subject to a £10m individual de minimis carve out)
(and the debtors thereof) and all secured creditors of Financial Indebtedness
that constitutes Incremental Facilities or Permitted Alternative Debt (and the
debtors thereof) will be required to sign/accede to the Intercreditor Agreement.

 

Page 13

 

 

5.24   Conditions to incurrence of Incremental Facility / Permitted Alternative
Debt:

(a)       Any person selected by the Company (in its sole discretion) may
participate in the Incremental Facilities or may provide the Permitted
Alternative Debt. There shall be no requirement to approach the existing Lender
group before the Incremental Facilities and/or Permitted Alternative Debt can be
established with other third parties. Provided that the conditions described in
Sections 5.22 (Incremental Facilities) to 5.25 (Credit Facilities Basket) of
this term sheet have been met, all other terms relating to the relevant
Incremental Facility and Permitted Alternative Debt shall be as agreed with the
relevant lenders providing such Incremental Facility or Permitted Alternative
Debt.

 

(b)       An Incremental Facility and Permitted Alternative Debt may only be
established if no Event of Default is continuing.

 

(c)       No consent will be required from the existing Lenders (other than a
Lender making available the relevant Incremental Facility / Permitted
Alternative Debt) in order to establish an Incremental Facility and/or incur any
other Permitted Alternative Debt.

 

(d)       If incurred within 12 months of the Closing Date, there shall be a
most favoured nation provision for the all in yield (to be defined) applicable
to a term Incremental Facility/Permitted Alternative Debt denominated in
Sterling or Euro ranking pari passu with Facility B and, subject to the
Intercreditor Agreement, secured on the Transaction Security with headroom set
at 1.0% above the all in yield applicable to the existing Facility B1 (in the
case of such Incremental Facilities/Permitted Alternative Debt denominated in
Sterling) or Facility B2 (in the case of such Incremental Facilities/Permitted
Alternative Debt denominated in Euro) (the MFN Rate) unless the all in yield on
Facility B is increased (if applicable, at each level of the applicable margin
ratchet) by an amount equal to the amount by which the all in yield for such
Incremental Facility/Permitted Alternative Debt exceeds the MFN Rate.

 

(e)       An Incremental Facility or any Permitted Alternative Debt may be
amortising on terms and in amounts agreed with the relevant lenders, provided
that, with respect to any Incremental Facility or any Permitted Alternative Debt
subject to the Intercreditor Agreement, the scheduled repayment instalments
falling prior to the initial Maturity Date for Facility B as at the date of the
Senior Facilities Agreement do not exceed 1.00% of the principal amount of the
relevant Incremental Facility or Permitted Alternative Debt in any Financial
Year or the Facility B Lenders are offered the same amortisation percentage per
annum as the proposed Incremental Facility or Permitted Alternative Debt
(irrespective of whether they accept such offer).

 

Page 14

 

 

 

(f)       The maturity date of an Incremental Facility or any Permitted
Alternative Debt shall be as agreed with the relevant lenders, provided that,
with respect to any Incremental Facility or any Permitted Alternative Debt
subject to the Intercreditor Agreement the relevant maturity date shall not fall
earlier than the initial Maturity Date of Facility B as at the date of the
Senior Facilities Agreement.

 

(g)      Each Incremental Facility/Permitted Alternative Debt shall rank pari
passu or junior to Facility B, the RCF and the other Incremental Facilities and
may (unless unsecured), subject to the Agreed Security Principles, be guaranteed
and secured by the same entities and security (unless otherwise agreed).

 

(h)      Any member of the Group which is or, upon the occurrence of such
Incremental Facility/Permitted Alternative Debt will become, a Guarantor may be
a Borrower under the Incremental Facilities and/or the Permitted Alternative
Debt, provided that, with respect to any Incremental Facilities and/or the
Permitted Alternative Debt that does not rank paari passu with the Senior
Facilities such member of the Group must also be DMWSL 632 Limited or a holding
company of DMWSL 632 Limited.

 

(i)       Providers of Incremental Facilities and, subject to footnote 7 above,
Permitted Alternative Debt shall accede to the Intercreditor Agreement.

 

(j)       Any mandatory prepayment of an Incremental Facility and/or Permitted
Alternative Debt that is subject to the Intercreditor Agreement must be shared
rateably with Facility B.

    5.25   Credit Facilities Basket

At any time:

 

(a)      an amount equal to the aggregate of:

 

(i)       the aggregate principal amount of all prepayments of Facility B, the
RCF, any Incremental Facility or any Permitted Alternative Debt, any Debt
Purchase Transactions entered into by the Group made on or prior to the date of
the incurrence of the relevant Financial Indebtedness (or to be made in
connection with the incurrence of the relevant Financial Indebtedness, including
pro forma application of the net proceeds therefrom with full pro forma effect
consistent with the definition of Consolidated Pro Forma EBTIDA); plus

 

Page 15

 

 

 

(ii)      an amount equal to all accrued and unpaid interest, issue discounts
and other customary fees and expenses (including any premiums, break costs,
repayment protection or defeasance costs) and costs, expenses, taxes and fees
incurred in connection with such Financial Indebtedness; plus

 

(iii)     an amount equal to the greater of £16m and 25% of Consolidated Pro
Forma EBITDA; and

 

(b)       an unlimited amount so long as on a pro forma basis with respect to
the utilisation of the principal or equivalent amount of the proposed
Incremental Facility or Permitted Alternative Debt in full and the proposed use
of proceeds thereof (including, without limitation, any refinancing of Financial
Indebtedness and any acquired Consolidated Pro Forma EBITDA and assuming, for
the avoidance of doubt, that all the proceeds thereof have been paid away with
full pro forma effect consistent with the definition of Consolidated Pro Forma
EBTIDA) the Total Net Leverage Ratio as at the most recent date for which, at
Company’s election, annual, quarterly or monthly financial statements are
available (or if none are available, the Closing Date) does not exceed the Total
Net Leverage Ratio as at then prevailing financial covenant level (unless any
applicable excess is being incurred under paragraph (a) above and it being
understood that any Financial Indebtedness may be incurred under this paragraph
(b) prior to incurring any amount under paragraph (a) above).

 

5.26   Prepayment and Cancellation:

(a)       Illegality

 

If, in any applicable jurisdiction, it becomes unlawful for a Lender to fund,
issue or maintain its participation or to perform any of its obligations under
the Senior Facilities Agreement (or it becomes unlawful for any affiliate of a
Lender for that Lender to do so), its commitments shall be cancelled immediately
and its share of the utilisations shall be repaid.

 

The Senior Facilities Agreement will include customary Issuing Bank illegality
provisions.

 

 

(b)       Voluntary Cancellation

 

The Company may, on not less than 3 Business Days’ prior notice, cancel the
whole or any part (being a minimum amount of, with respect to Facility B,
£1,000,000 and, with respect to the RCF, £500,000) of an Available Facility.

 

 

Page 16

 

 

 

(c)       Voluntary Prepayment – Facility B

 

Utilisations may be prepaid after the last day of the relevant Availability
Period in whole or in part on 3 Business Days’ prior notice (but, if in part, by
a minimum amount of £1,000,000).

 

 

(d)       Voluntary Prepayment - Revolving Facility

 

Utilisations may be prepaid in whole or in part on 3 Business Days’ prior notice
(but, if in part, by a minimum amount of £500,000).

 

 

(e)       Increased Costs, Tax Gross-Up and Tax Indemnity

 

The Company may cancel the commitment of and prepay any Lender that makes a
claim under these provisions (or require such a Lender to transfer its
commitments).

 

 

(f)       Change of Control/Exit

 

The Company shall, promptly upon becoming aware, provide a written notice to the
Agent of any Change of Control, flotation of any member of the group or holding
company of any member of the Group or a sale of all or substantially all of the
assets of the Group. Each Lender shall have 15 Business Days after the
occurrence of a Change of Control to exercise an individual right, on 30
Business Days’ written notice to the Company, to cancel all its commitments and
require that all its outstanding participations in utilisations are repaid with
accrued interest and all other amounts accrued under the Finance Documents,
whereupon such commitments will be cancelled and all such amounts will be
immediately due and payable.

 

“Change of Control” means:

 

(i)       Inspired Entertainment Inc. ceasing to control directly DMWSL 633
Limited;

 

(ii)      DMWSL 633 Limited ceasing to control directly DMWSL 632 Limited;

 

(iii)     DMWSL 632 Limited ceasing to control directly DMWSL 631 Limited;

 

(iv)     DMWSL 631 Limited ceasing to control directly Gaming Acquisitions
Limited;

 

(v)     Gaming Acquisitions Limited ceasing to control directly Inspired Gaming
Group Limited;

 

(vi)     Inspired Gaming Group Limited ceasing to control directly Inspired
Gaming (Holdings) Limited;

 

(vii)    Inspired Entertainment Inc. ceasing to control directly or indirectly
Target; and/or

 

Page 17

 

 

 

(viii)   any person or group of persons acting in concert gaining direct or
indirect control of Inspired Entertainment Inc.

 

“control” of any entity other than Inspired Entertainment Inc. means:

 

(a)       the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise to:

 

(i)       cast, or control the casting of, 100% of the maximum number of votes
that might be cast at a general meeting of that entity; or

 

(ii)      appoint or remove all, or the majority, of the directors or other
equivalent officers of that entity; or

 

(b)       the holding legally and beneficially of 100% of the issued share
capital of that entity.

 

“control” of Inspired Entertainment Inc. means:

 

(a)       the power (whether by way of ownership of shares, proxy, contract,
agency or otherwise) to:

 

(i)       appoint or remove all, or the majority, of the directors or other
equivalent officers of Inspired Entertainment Inc.; or

 

(ii)      cast, or control the casting of, more than 35% of the maximum number
of votes that might be cast at a general meeting of Inspired Entertainment Inc.;
or

 

(b)       the holding beneficially of more than 35% of the issued share capital
of Inspired Entertainment Inc..

 

For the avoidance of doubt, a listing which does not result in the Change of
Control shall not trigger a prepayment obligation.

     

(g)       Mandatory Prepayment - Disposals

 

The proceeds of all disposals (less reasonable expenses and taxes incurred)
shall be applied in prepayment of the Facilities promptly on receipt as set out
below, other than proceeds which:

 

(i)       do not exceed individual and aggregate de minimis amounts of
£1,000,000 respectively £3,000,000;

 

Page 18

 

 

 

(ii)      are applied towards investment in the business of the Group as soon as
possible but in any event within 12 months of receipt (or are committed to be
applied by the relevant Group member within such 12-month period and those
proceeds are in fact reinvested within 6 months after the end of such 12-month
period); or

 

(iii)     arise as a result of certain specified categories of permitted
disposals to be agreed.

     

(h)       Mandatory Prepayment - Excess Cashflow

 

An amount equal to the Applicable Percentage (as set out in the table below) of
Excess Cashflow for any Financial Year (commencing in respect of the first full
Financial Year commencing after the Closing Date) of the Company shall be
applied in prepayment of the Facilities as set out below:

 

  Total Net Leverage Ratio   Applicable Percentage (%)           Greater than or
equal to [●]:18   50           Less than [●]:19 but greater
than or equal to [●]:110   25           Less than [●]:111   zero

  

 

A de minimis amount of the higher of £3,000,000 and 5.0% of Consolidated Pro
Forma EBTIDA, together with any amounts applied in voluntary prepayment or
towards debt buy backs shall be deducted prior to any such prepayment but after
the applicable percentage set out above is calculated.

 

(i)       Mandatory Prepayment – Acquisition Proceeds

 

The proceeds of any claim against the Vendor or any Report provider in relation
to the Acquisition (less reasonable expenses and taxes incurred) shall be
applied in prepayment of the Facilities promptly on receipt as set out below,
other than proceeds which:

 

(i)       are applied to satisfy a liability of a member of the Group arising as
a result of the relevant claim;

 

 

 

 

8To be set at 0.5x below opening leverage.

9To be set at 0.5x below opening leverage.

10To be set at 1.0x below opening leverage.

11To be set at 1.0x below opening leverage.

 

Page 19

 

 

 

(ii)      are applied to satisfy (or reimburse a member of the Group which has
discharged) a liability of a member of the Group in compensation for a loss or
in rectifying the deficiency (including, without limitation, tax liability,
environmental liability, litigation and working capital deficiency) giving rise
to the relevant claim within 12 months of receipt (or are committed to be
applied by the relevant Group member within such 12-month period and those
proceeds are in fact reinvested within 6 months after the end of such 12-month
period); or

 

(iii)     do not exceed individual and aggregate de minimis amounts of
£1,000,000 respectively £3,000,000.

 

(j)       Mandatory Prepayment – Insurance Proceeds

 

The proceeds of any insurance claim (less reasonable expenses and taxes
incurred) shall be applied in prepayment of the Facilities promptly on receipt
as set out below, other than proceeds which:

 

(i)       applied to meet a third party claim or, in the case of business
interruption insurance only, to cover certain operating losses or in
reinstatement of the relevant asset or otherwise in amelioration of the loss;

 

(ii)      are applied in replacement, reinstatement or repair of the relevant
asset of the Group as soon as possible but in any event within 12 months of
receipt (or are committed to be applied by the relevant Group member within such
12-month period and those proceeds are in fact reinvested within 6 months after
the end of such 12-month period); or

 

(iii)     do not exceed individual and aggregate de minimis amounts of
£1,000,000 respectively £3,000,000.

 

(k)       General

 

In the case of a loan under Facility B or any Incremental Term Facility, any
amount prepaid may not be redrawn.

 

Any prepayment shall be made with accrued interest on the amount prepaid and,
subject to breakage costs and the Call Protection, without premium or penalty.

 

Any prepayment of a Utilisation (other than pursuant to paragraphs (a), (e) or
(f) above) shall be applied on a pro rata basis among the relevant Lenders.

 

Page 20

 

 

5.27   Application of Mandatory Prepayment Proceeds: Mandatory prepayment
proceeds will, subject to the Intercreditor Agreement, be applied in the
following order (for the avoidance of doubt, irrespective of the currency in
which any such indebtedness has been incurred):      

(a)      pro rata against outstandings under Facility B and each Incremental
Term Facility ranking pari passu with Facility B and secured on the Transaction
Security;

 

(b)      then in cancellation of available commitments under the Revolving
Facility and any Incremental Revolving Facility ranking pari passu with Facility
B and secured on the Transaction Security;

 

(c)      then in prepayment of outstandings under the Revolving Facility and any
Incremental Revolving Facility ranking pari passu with Facility B and secured on
the Transaction Security; and

 

(d)      then in repayment and cancellation of outstandings and commitments
under any Ancillary Facilities.

 

5.28   Facility B and Incremental Term Facility Prepayment Election: Lenders
participating in Facility B shall be entitled by giving the Agent not less than
3  Business Days’ prior notice to decline all or part of its share of mandatory
prepayments of Facility B they are otherwise entitled to. The amount in respect
of which that non accepting lender has waived its right to prepayment (the
Waived Amount) may, at the election of the relevant non accepting lender, be
allocated to any of its affiliates which are also Lenders at the relevant time,
and otherwise shall be (i) offered to the other Facility B Lenders (pro rata to
their respective Facility B Commitments) (with the balance of the Waived Amount
which those Facility B Lenders elect not to receive being permitted to be
applied as follows: (i) prepaid to the relevant non accepting lender, or (ii)
retained by the Group and shall be permitted to be applied towards any purpose
not prohibited by this Agreement.     5.29    Tax Obligors will be required to
gross up or to indemnify for or on account of tax on payments to lenders under
the finance documents, except that a Borrower will not be obliged to gross-up or
indemnify for or on account of tax on any payments to Lenders arising as a
result of tax imposed by (i) that Lender’s jurisdiction of tax residence (or if
different that Lender’s facility office) or (ii) that Borrower’s jurisdiction of
tax residence unless, in each case, such withholding is a result of a change in
law, tax treaty or published practice of the relevant tax authorities occurring
after the date on which the relevant Lender becomes party to the SFA. It is
intended that this will be reflected through the use of customary “Qualifying
Lender” language. It is acknowledged that the Obligors will not be required to
indemnify a Lender in respect of any cost or tax relating to FATCA, bank levy or
bank profit surcharge.

 

Page 21

 

 

5.30   Representations: The Senior Facilities Agreement will contain
representations with respect to the Obligors and the other members of the Group
that are usual for transactions of this nature and shall include customary
qualifications and carve outs (to be agreed), including, without limitation, the
following:       (a)      status;*       (b)      binding obligations;*      
(c)      non-conflict with other obligations;*       (d)      power and
authority;*       (e)      validity and admissibility in evidence;*      
(f)       governing law and enforcement;*      

(g)      no filing or stamp taxes;

 

(h)      no deduction of tax;

 

 

(i)        no default;*

 

(j)       no misleading information;*

 

  (k)       financial statements;*      

(l)        no proceedings;

 

(m)      no breach of laws;

 

(n)      environmental laws;

 

 

(o)      taxation;

 

(p)      anti-corruption law and sanctions;*

 

  (q)      ranking*;       (r)       good title to assets;*      

(s)      legal and beneficial ownership,*

 

(t)       shares;*

 

  (u)      intellectual property;       (v)      group structure chart;      
(w)     centre of main interests and establishments*      

(x)      security and Financial Indebtedness;

 

(y)      Guarantor Threshold Test;

 

(z)      Accounting reference date;

 

Page 22

 

 

 

(aa)     Acquisition documents, disclosures and other documents;

 

(bb)    Pensions;

 

(cc)    ERISA* (subject to MAE);

 

(dd)    Margin stock*;

 

(ee)    Investment Company Act*;

 

(ff)     US solvency* (but repeating only on utilisation dates and only to the
extent the relevant Borrower is incorporated in the USA); and

 

(gg)    Holding and dormant companies.

 

  Representations marked with a “*” shall be repeating representations.    
5.31    Information Undertakings: The Company shall supply each of the
following:      

(a)       as soon as they become available, but in any event within 120 days of
the end of its Financial Years, its audited consolidated financial statements
for that Financial Year and, if requested by the Agent, those of any Obligor;

 

(b)       as soon as they become available, but in any event within 60 days of
the end of its Financial Quarter years, its consolidated financial statements
for that Financial Quarter;

 

(c)       as soon as they become available, but in any event within 45 days of
the end of each month, its consolidated financial statements for that month
(including cumulative management accounts for the Financial Year to date)
together with a statement from the directors of the Company commenting on that
month’s performance and any material developments;

 

(d)      with each set of audited consolidated financial statements and each set
of its consolidated quarterly financial statements, a compliance certificate
signed by one director of the Company and, in the case of the audited
consolidated financial statements, reported on by the Company’s auditors, in the
form agreed by the Company and the Majority Lenders:

 

(i)       in each case certifying compliance with the financial covenant and, in
the case of the Company’s audited consolidated annual financial statements,
reported on by the Company’s auditors on the proper extraction of the numbers
used in the financial covenant calculations;

 

(ii)      in the case of the annual compliance certificate only, confirming
which members of the Group are Material Companies and that the Guarantor
Coverage has been met; and

 

Page 23

 

 

 

(iii)     in each case setting out the calculation of Total Net Leverage Ratio
for the purposes of the Margin Ratchet;

     

(e)       all documents dispatched by the Company to its shareholders generally
(or any class of them) or by the Company or any other Obligor to its creditors
generally (or any class of them);

 

(f)       details of any claim under the Acquisitions Documents in an amount
exceeding £2m and of any disposal which will result in a mandatory prepayment of
the Facilities;

 

(g)      details of any material litigation, arbitration or administrative
proceedings or any material judgment; and

 

(h)      such other information as the Agent (acting on the instructions of the
Majority Lenders) may reasonably request regarding the financial condition,
assets and operations of the Group and/or any member of the Group.

 

  Each Obligor shall notify the Agent of any Default (and the steps, if any,
being taken to remedy it) promptly upon becoming aware of its occurrence.      
If the Agent so requests, the Company shall promptly deliver a certificate
certifying that no Default is continuing (or if a Default is continuing,
specifying the steps being taken to remedy it).      

At least two members of the senior management of the Company will give a
presentation to the Finance Parties in each Financial Year (or, upon request by
the Majority Lenders (acting reasonably), more often if an Event of Default has
occurred) about the on-going business and financial performance of the Group and
any applicable budget related matters. Such presentation may, at the Company’s
election, take place in a physical location or over the telephone.

 

Customary undertakings relating to the provision by the Obligors of information
for any “know your customer” checks required to be carried out by the Agent and
the Lenders shall be included in the Senior Facilities Agreement.

 

The Company may satisfy its obligations to deliver information to those Lenders
who agree by posting such information onto an electronic website.

 

The Company must label all information delivered as either public side or
private side information.

 

Page 24

 

 

5.32   Key Financial Definitions and Calculation Methodology: Financial
definitions (including, without limitation, definitions of Consolidated EBITDA
and those required in connection with the financial covenant (as described
below)) and calculation methodology with respect to the financial definitions
and the financial covenant to be as set out in Schedule 2 (Financial Definitions
and Calculation Methodology) hereto.     5.33   Financial Covenant: Total Net
Leverage Ratio (as at any quarter date on which this covenant is required to be
tested) shall not exceed the ratio specified next to such quarter date in the
table below.

 

  Quarter date   Total Net Leverage Ratio12   30 June 2019   5.1:1   31
September 2019   5.1:1   31 December 2019   5.1:1   30 March 2020   5.1:1   30
June 2020   4.1:1   31 September 2020   4.1:1   31 December 2020   4.1:1   30
March 2021   4.1:1   30 June 2021   3.0:1   31 September 2021   3.0:1   31
December 2021 and thereafter   3.0:1

 

 

The first testing date for the financial covenant shall be in respect of the
Relevant Period ending on the last day of the third complete Financial Quarter
following the Closing Date.

 

There shall be no other financial covenants.

 

 

 

 

12Assuming closing in 3Q19 the first testing date would be 2Q20 – as per this
Term Sheet, the first testing date for the financial covenant shall be in
respect of the Relevant Period ending on the last day of the third complete
Financial Quarter following the Closing Date and inclusion of any ratios
preceding such first test date is for informational purposes only without
prejudice to the remainder of this Term Sheet.

 

Page 25

 

 

5.34   Equity Cure:

The Company will have the right to cure breaches of the financial covenant (an
Equity Cure) by the contribution from its shareholders of additional equity
and/or subordinated loans in an amount equal to or (except in relation to any
Cure Amount applied as a deemed increase of Consolidated Pro Forma EBITDA) in
excess of the amount required to cure such breach (a Cure Amount).

 

The Cure Amount shall be applied in deemed reduction of debt or (at the option
of the Company) as a deemed increase of Consolidated Pro Forma EBITDA.

 

Any Equity Cure may be made at any time on or prior the date falling 20 Business
Days after the due date for delivery of the financial statements evidencing such
breach. There shall be no more than 3 Equity Cures in aggregate over the
lifetime of the facilities and Equity Cures may not be applied in consecutive
Financial Quarters.

 

There will be no requirement to apply the proceeds from any Cure Amount in
prepayment of the Senior Facilities.

 

An automatic cure shall apply if, on the next applicable testing date, the
financial covenant is complied with and neither Facility B nor the RCF have been
accelerated.

    5.35   General Undertakings: The Senior Facilities Agreement will contain
general undertakings with respect to the Obligors and the other members of the
Group usual for transaction of this nature (subject to such qualifications and
exceptions as may be agreed and including restrictions on transactions between
Obligors and non-Obligors), including, without limitation, the following:      
Authorisations and compliance with laws       (a)      authorisations;      

(b)      compliance with laws;

 

(c)      environmental compliance;

 

(d)      environmental claims;

 

(e)      anti-corruption law and sanctions;

      (f)       taxation;       Restrictions on business focus      
(g)      restriction on merger;       (h)      no change of business;      
(i)        restriction on acquisitions;

 

Page 26

 

 

  (j)       restriction on joint ventures;       (k)      holding company;      
(l)       centre of main interests and establishments;       Restrictions on
dealing with assets and Security       (m)      preservation of assets;      
(n)      pari passu ranking;       (o)      negative pledge;      
(p)      restriction on disposals;       (q)      arm’s length basis;      
Restrictions on movements of cash - cash out      

(r)       restriction on loans and credit;

 

(s)       restriction on dividends and share redemption;

 

(t)       restriction on payments under intra-group loans and any other
subordinated debt;

      Restrictions on movements of cash - cash in       (w)     restriction on
financial indebtedness;      

(x)       restriction on guarantees and indemnities;

 

(y)      restriction on issuance of share capital;

 

  Miscellaneous       (x)      insurance;       (y)      pensions;      
(z)       access;       (aa)     intellectual property;      

(bb)   treasury transactions;

 

(cc)    Guarantor Coverage and Material Companies;

 

(dd)    further assurance;

 

(ee)    People with Significant Control Regime;

 

Page 27

 

 

 

(ff)      Financial assistance;

 

(gg)    Acquisition Documents (including prohibiting any amendments to the
Acquisition Documents which would be materially adverse to the interests of the
Finance Parties in their capacities as Lenders (taken as a whole));

 

(hh)   compliance with hedging letter; and

 

(ii)      maintenance of rating.

    5.36   Certain Permitteds The general undertakings shall in any event permit
the transactions described in Schedule 5 (Baskets, Events of Default and Certain
Other Items) as well as the following:      

Payments

 

(a)       payments pursuant to a general basket equal to the greater of £16
million or, if higher, 25% of Consolidated Pro Forma EBITDA;

 

(b)      unlimited payments (as set out in the table below) subject to the Total
Net Leverage Ratio (pro forma for such payment) as set out below: 

 

  Total Net Leverage Ratio   Funding Source           Greater than or equal to
[●]:113   No payments permitted           Less than [●]:114 but greater than
or equal to [●]:115   Unused Retained Excess Cash since date of SPA          
Less than [●]:116   Any funding source (pro forma for that funding source)

 

  Indebtedness      

(c)       any and all assumed debt, acquired debt or acquisition debt provided:

 

(i)       it does not result in the Credit Facilities Basket (as set out above)
being exceeded;

 

 

 

 

13To be set at 1.0x below opening leverage

14To be set at 1.0x below opening leverage

15To be set at 1.25x below opening leverage

16To be set at 1.25x below opening leverage

 

Page 28

 

 

 

(ii)      it is repaid or otherwise discharged within 6 months from
assumption/acquisition; or

 

(iii)     the Total Net Leverage Ratio (pro forma for such
assumption/acquisition with full pro forma effect consistent with the definition
of Consolidated Pro Forma EBTIDA) does not exceed the the prevailing financial
covenant level;

      Acquisitions, JVs, Investments      

(d)       any and all acquisitions, joint ventures or investments (whether in an
unrestricted subsidiary, a non-guarantor or otherwise) shall be permitted
subject only to no payment or insolvency Event of Default continuing at the time
of legal commitment and compliance with sanctions, provided that:

 

(i)       any investments in a joint venture or an unrestricted subsidiary shall
not exceed 25% of Consolidated Pro Forma EBITDA in any Financial Year (net of
amounts received from such investments, investments funded from Acceptable
Funding Sources and disregarding investments made in unrestricted subsidiaries
that are subsequently designated subsidiaries);

 

(ii)      any acquisition of a company or a business may only be made if the
relevant target has positive EBITDA or negative EBITDA that does not exceed
GBP1m; and

 

(iii)     with respect to any investments in a joint venture or an unrestricted
subsidiary and any acquisition of a company or a business, the member of the
Group that is legally committing to and/or making such investment or acquisition
must not be a holding company of DMWSL 631 Limited,

 

and, for the avoidance of doubt, there shall be no other ratio tests, baskets or
other caps that would limited the Group’s ability to make any such acquisitions,
joint ventures or investments.

      Permitted Disposals      

(e)      disposals of fixed (including gaming terminals) or long term assets
where the net proceeds are designated, within 6 months prior to, or 12 months
following (and actually applied within 18 months following), such disposal to
purchase any assets useful to the Group, make acquisitions or other investments
(in each case, for the avoidance of doubt, to the extent such acquisitions or
other investments are not otherwise prohibited under the Senior Facilities
Agreement), for capex or applied in prepayment of any Financial Indebtedness;

 

Page 29

 

 

 

(f)       any disposal provided that no payment or insolvency Event of Default
is continuing at the time of legal commitment and at least 75% of the
consideration receivable is cash, provided that cash shall be deemed to include
(i) any shares received in connection with such disposal and converted into cash
within 180 days of receipt and (ii), subject (other than with respect to
disposals of gaming machines) to a cap of £2mm per single asset, £5mm per
Financial Year and £10mm over the life of the Agreement, the fair market value
of any other non-cash consideration received (net of any cash received by the
Group at any time following the conversion of such consideration into cash),
provided that 100% of the proceeds of such conversion shall be applied as
required under paragraph (g) of Section 5.26 (Prepayment and Cancellation)
below).

    5.37    Growth baskets: Growth baskets to be included pursuant to which
certain baskets, permissions or thresholds (including, for the avoidance of
doubt, those expressly stated in this Term Sheet as benefitting from a grower)
will be expressed as the greater of a fixed GBP number and a percentage of
Consolidated Pro Forma EBITDA. All baskets, permissions and thresholds set by
reference to a fixed period of time shall be subject to an ability to carry
forward and/or carry back 100% of any unused amount.     5.38   Unrestricted
subsidiaries: Company shall be able to, at its discretion, designate by written
notice to the agent any member of the Group which is not an Obligor and any
newly incorporated person or other special purpose vehicle (including its
subsidiaries, whether acquired as a result of a permitted acquisition, permitted
joint venture or otherwise) as an unrestricted subsidiary. No unrestricted
subsidiary shall be a member of the Group and consequently it shall not be
subject to the obligations, restrictions or other provisions of the Senior
Facilities Agreement other than certain specified provisions such as sanctions
undertakings and others to be agreed. Unrestricted subsidiaries may be
designated restricted subsidiaries at the Company’s discretion (but once so
redesignated may not subsequently be designated as unrestricted again).    
5.39    Events of Default: The Senior Facilities Agreement will contain events
of default usual for transactions of this nature (subject to such qualifications
and remedy periods as may be agreed including without limitation as set out in
Schedule 5 (Baskets, Events of Default and Certain Other Items)) and as may be
agreed in respect  of each Obligor and, if appropriate, member of the Group
including, without limitation, the following:      

(a)       non-payment unless:

 

(i)       in the case of principal and interest, failure to pay is caused by
administrative or technical error or a Disruption Event and payment is made
within 3 Business Days of its due date; and

 

(ii)       with respect to any other amounts, payment is made within 5
Business Days of the due date;

 

Page 30

 

 

  (b)      breach of the financial covenant (subject to the cure rights
specified in paragraph 5.34 (Equity Cure)) and any breach of the requirement to
deliver financial statements, the annual budget and/or related compliance
certificates;       (c)      failure to comply with any other provision of the
Finance Documents unless such failure is capable of remedy and is remedied
within 20 Business Days of the earlier of (i) the Agent giving notice and (ii)
the Obligor becoming aware;       (d)      misrepresentation;      
(e)      cross default, subject to an agreed minimum amount;      
(f)       insolvency;       (g)      insolvency proceedings;      
(h)      creditors’ process (subject to an agreed minimum amount);      
(i)       unlawfulness and invalidity;      

(j)       Intercreditor Agreement;

 

(k)       cessation of business;

 

  (l)       audit qualification in respect of an Obligor continuing as a going
concern or by reason of failure to disclose financial information or being
materially adverse to the Finance Parties (taken as a whole);      

(m)     expropriation;

 

(n)       repudiation and rescission;

 

 

(o)       litigation;

 

(p)      ERISA events;

 

(q)      US insolvency; and

 

(r)       material adverse change.

 

Standard US automatic acceleration provisions shall also apply with respect to
Borrowers incorporated in the United States of America.

 

5.40   Clean Up Period: 120 days for the Acquisition and any permitted
acquisition / investment.     5.41   Minimum Hedging Requirement:

Interest rate hedging to be implemented in respect of not less than 50% of the
amounts outstanding under Facility B for a minimum period of 3 years within 120
days of the Closing Date.

 

All Hedging Agreements will rank pari passu with the Facilities.

 

No ROFR, ROFO or similar rights in favour of the Finance Parties.

 

Page 31

 

 

5.42    Material Adverse Effect:

“Material Adverse Effect” means any event or circumstance which in each case
after taking into account all mitigating factors or circumstances including, any
warranty, indemnity or other resources available to the Group or right of
recourse against any third party with respect to the relevant event or
circumstance and any obligation of any person in force to provide any additional
equity investment:

 

(a)      has a material adverse effect on:

 

(i)       the consolidated business, assets or financial condition of the Group
(taken as a whole); or

 

(ii)      the ability of the Group (taken as whole) to perform its payment
obligations under the Finance Documents; or

 

(b)      subject to the Legal Reservations and any Perfection Requirements,
affects the validity or the enforceability of any of the Finance Documents to an
extent which is materially adverse to the interests of the Finance Parties under
the Finance Documents taken as a whole and, if capable of remedy, is not
remedied within 20 Business Days of the earlier of (i) the Company becoming
aware of the issue and (ii) the giving of written notice of the issue by the
Agent.

 

5.43      Majority Lenders: 662/3% of Total Commitments.     5.44      Super
Majority Lenders: 80% of Total Commitments.     5.45      Amendments:

Any amendment or waiver may be made with the consent of the Majority Lenders and
the Company unless that amendment or waiver is specified as requiring the
consent of a higher proportion of Lenders and/or any other Finance Party and the
Company.

 

In addition, if any amendment, waiver or consent is a structural adjustment
(allowing for such amendments and waivers effecting changes in the structure and
size of Facility B or (as applicable) the RCF) that amendment, waiver or consent
shall only require the prior consent of the Company and each Lender that is
participating in that structural adjustment and shall not require the consent of
any other Lender unless such structural adjustment is to increase the
Commitments or reduce the tenor of any of the Facilities in which case the
consent of the Majority Lenders shall also be required.

 

Page 32

 

 

5.46    Super Majority Lender Decisions:

Subject to the structural adjustment clause, any amendment, waiver or consent
of, or in relation to, any term of any Finance Document that has the effect of
changing or which relates to certain clauses to be agreed, including (without
limitation):

 

(a)       any provision which expressly requires the consent of the Super
Majority Lenders;

 

(b)       the nature or scope of the guarantee and indemnity granted under the
Senior Facilities Agreement or the Charged Property; and

 

(c)       the release of any guarantee and indemnity granted under the Senior
Facilities Agreement.

 

5.47   All Lender Decisions:

Subject to the structural adjustment clause, any amendment, waiver or consent
of, or in relation to, any term of any Finance Document that has the effect of
changing or which relates to certain clauses to be agreed, including (without
limitation):

 

(a)       the definition of “Change of Control”, “Majority Lenders” and “Super
Majority Lenders”;

 

(b)       an extension to the date of payment of any amount under the Finance
Documents;

 

(c)       a reduction in the Margin or a reduction in the amount of any payment
of principal, interest, fees or commission payable;

 

(d)       a change in currency of payment of any amount under the Finance
Documents;

 

(e)       an increase in any commitment or the Total Commitments, an extension
of any Availability Period or any requirement to a cancellation of commitments
reduces the commitments of the Lenders rateably under the relevant facility;

 

(f)       the equivalent of the following clauses in the Senior Facilities
Agreement:

 

Clause 2.4 (Finance Parties’ rights and obligations), Clause 5.1 (Delivery of a
Utilisation Request), Clause 12.1 (Illegality), Clause 14.10 (Application of
prepayments), Clause 42 (Amendments and Waivers), Clause 47 (Governing law) or
Clause 48.1 (Jurisdiction of English courts);

 

(g)       a change to the Borrowers or Guarantors other than in accordance with
the Senior Facilities Agreement;

 

(h)       any provision which expressly requires the consent of all the Lenders
and the structural adjustment clause; and

     

(i)       any amendment to the order of priority or subordination under the
Intercreditor Agreement or the manner in which the proceeds of enforcement of
the Transaction Security are distributed.

 

Page 33

 

 

5.48    Yank the Bank: If any Lender becomes  a Non-Consenting Lender, then,
within 45 days of such Lender becoming a Non-Consenting Lender, the Company may,
on 5 Business Days’ prior written notice cause that Lender’s position to be
transferred at par to a person (that is not a member of the Group) nominated by
the Company for a purchase price in cash equal to that Lender’s participations
in the utilisations then outstanding.     5.49    Snooze You Lose: Ten (10)
Business Days.     5.50    Assignments / Transfers and Sub-Participations by
Lenders:

A Lender may assign any of its rights to, transfer by novation any of its rights
and obligations to or enter into a voting sub-participation with another bank or
financial institution or to a trust, fund or other entity which is regularly
engaged in or established for the purpose of making, purchasing or investing in
loans, securities or other financial assets.

 

Anti-circumvention language shall be included to avoid prohibited transfers
described above from being effected by way of structured solutions where the
commercial effect of such solutions is to achieve transfer of debt to a person
that would not otherwise have been able to become a Lender without Borrower
consent.

 

 

The Company’s consent (not to be unreasonably withheld or delayed and deemed
given if not expressly refused within 10 Business Days) will be required for any
transfer, assignment or voting sub-participation (or conversion of non-voting
into voting sub-participation) unless such transfer, assignment or voting
sub-participation (or conversion of non-voting into voting sub-participation)
is:

 

(a)       to an entity identified on a list to be agreed by the Company and the
Mandated Lead Arrangers;

 

(b)       to another Lender or an affiliate of any Lender;

 

(c)       to a fund which is a Related Fund of the assigning or transferring
Lender; or

 

(d)       made while a financial covenant, payment or insolvency Event of
Default is continuing.

 

There shall be no restrictions or consent requirements in respect of any
non-voting sub-participation provided that the transferring Lender warrants and
represents to the Company that it retains exclusive control over all rights and
obligations in relation to the participations and Commitments that are the
subject of the relevant agreement or arrangement, including all voting rights
(for the avoidance of doubt, free of any agreement or understanding pursuant to
which it is required to or will consult with any other person in relation to the
exercise of any such rights and/or obligations). Breach of such representation
shall render the relevant Lender a Defaulting Lender.

 

Page 34

 

 

 

Voting Sub-participations and conversions of non-voting into voting
sub-participations shall be subject to the same restrictions as transfers and
assignments.

 

Notwithstanding anything to the contrary in this term sheet, absolute
prohibition at all times prior to (other than with respect to paragraph (c)
below) a financial covenant, payment or insolvency Event of Default which is
continuing on transfers, assignments or sub-participations of any kind to any of
the following persons unless the prior written consent of the Company (in its
sole discretion) is obtained:

 

(a)       an Industry Competitor (to be defined as any person or entity (or any
of its affiliates) which is a trade competitor of a member of the Group and any
controlling shareholder of a trade competitor of a member of the Group, provided
that, for the avoidance of doubt, this shall not include any person or entity
(or any of its affiliates) which is a bank, financial institution or trust, fund
or other entity whose principal business or a material activity of whom is
arranging, underwriting or investing in debt); or

 

(b)      Loan to Own Investors; or

 

(c)      any person that is (or would, upon becoming a Lender, be) a Defaulting
Lender.

 

“Loan-to-Own Investor” means any person (including an affiliate of a Finance
Party) which is engaged in investment strategies that include the purchase of
loans or other debt securities with a view to owning the equity or gaining
control of a business (directly or indirectly) or which utilizes any other
similar “loan to own” strategies.

 

With respect to any transfers, assignments or sub-participations of the
Revolving Facility (i) the Company shall also be informed on or prior to the
date of the relevant assignment, transfer or sub-participation and (ii) the
transferee shall be a deposit taking financial institution authorised by a
financial services regulator which holds a minimum rating equal to or better
than BBB- or Baa3 (as applicable).

    5.51   Miscellaneous Provisions: The Senior Facilities Agreement will
contain provisions relating to, among other things, default interest, market
disruption, replacement screen rate, debt purchase transactions (and
disenfranchisement of group purchasers), breakage costs, increased costs,
indemnities, set-off and administration.  

 

Page 35

 

 

5.52   Costs and Expenses: All costs and expenses (including legal fees)
reasonably incurred by the Agent, the Mandated Lead Arrangers, the Bookrunner,
the Security Agent and any other Finance Party in connection with the
negotiation, preparation, printing, execution, syndication and perfection of the
Senior Facilities Agreement, any document referred to in the Senior Facilities
Agreement, the Transaction Security and/or any other Finance Documents shall be
paid by the Company promptly after receipt of the corresponding invoice on
demand. Such costs and expenses shall in any event not be payable before the
date falling five Business Days after receipt of the corresponding invoice.    
5.53    No Deal, no Fees No fees, commissions, costs or expenses (other than the
agreed legal fees subject to the agreed cap) will be payable unless the Closing
Date occurs.     5.54   Governing Law: English law, save where inappropriate for
Transaction Security Documents.     5.55   Jurisdiction: Courts of England, save
where inappropriate for Transaction Security Documents.     5.56   Counsel to
the Company: Sidley Austin LLP.     5.57   Counsel to Bookrunner: White & Case
LLP.

 

Page 36

 

 

SCHEDULE 1
Agreed Security Principles

 

1.Security Principles

 

(a)The guarantees and security to be provided under the Finance Documents will
be given in accordance with the agreed security principles set out in this
Schedule. This Schedule addresses the manner in which the agreed security
principles will impact on the guarantees and security proposed to be taken in
relation to this transaction.

 

(b)The Agreed Security Principles embody recognition by all parties that there
may be certain legal and practical difficulties in obtaining guarantees and
security from each Obligor in every jurisdiction in which the Obligors are
located. In particular:

 

(i)general legal and statutory limitations (including, with respect to the
relevant jurisdictions for which guarantee limitation language is set out in
Senior Facilities Agreement), such limitations as set out therein), regulatory
restrictions financial assistance, corporate benefit, fraudulent preference,
equitable subordination, “transfer pricing”, “thin capitalisation”, “earnings
stripping”, “controlled foreign corporation” “exchange control restrictions” and
“capital maintenance” rules, tax restrictions retention of title claims,
employee consultation or approval requirements and similar principles may limit
the ability of a member of the Group to provide a guarantee or security or may
require that the guarantee or security be limited as to its amount or otherwise
and, if so, the guarantee or security will be limited accordingly;

 

(ii)the security (including, for the avoidance of doubt, the maximum amount
secured thereunder) and extent of its perfection will be agreed taking into
account the cost to the Group of providing security (including, but not limited
to, any notarial costs or increase to the tax cost of the Group, stamp duty and
registration taxes and all applicable legal fees) so as to ensure that it is
proportionate to the benefit accruing to the Finance Parties and such cost shall
not exceed any amount which may be agreed between the Company and the Security
Agent;

 

(iii)any assets subject a legal requirement or third party contract, lease,
licence, instrument or other third party arrangements which are not prohibited
by the Senior Facilities Agreement and which prevent or condition those assets
from being charged, secured or otherwise subject to the applicable security
document (including requiring a consent of any third party, supervisory board or
works council (or equivalent)) will be excluded from any relevant security
document whilst such third party arrangements remain in place provided that
reasonable endeavours to obtain consent to charging any such assets shall be
used by the Obligors if the relevant asset is material if the Company reasonably
determines that such endeavours will not involve placing material commercial
relationships with third parties in jeopardy;

 

(iv)members of the Group will not be required to give guarantees or enter into
security documents it is not within the legal capacity of the relevant member of
the Group or if it would conflict with the fiduciary or statutory duties of
their directors or contravene any applicable legal, regulatory or contractual
prohibition or restriction or have the potential to result in a risk of personal
or criminal liability on the part of any director or officer; provided that the
relevant Group member shall use reasonable endeavours to overcome any such
obstacle;

 

Page 37

 

 

(v)it is expressly acknowledged that it may be either impossible or impractical
to create security over certain categories of assets in which event security
will not be taken over such assets

 

(vi)any asset which, if subject to the applicable security document, would give
a third party the right to terminate or otherwise amend any rights, benefits
and/or obligations with respect to any member of the Group in respect of the
asset or require the relevant Obligor to take any action materially adverse to
the interests of the Group or any member thereof, in each case will be excluded
from a guarantee or security document;

 

(vii)the granting of guarantees or security, or the perfection of security, when
required, and other legal formalities will be completed as soon as practicable
and, in any event, within the time periods specified in the Finance Documents
therefore or (if earlier or to the extent no such time periods are specified in
the Finance Documents) within the time periods specified by applicable law in
order to ensure due perfection. Unless otherwise specified in the Finance
Documents, the granting or perfection of security will not be required if it
would have a material adverse effect on the ability of the relevant Obligor or
any other member of the Group to conduct its operations and business in the
ordinary course or as otherwise permitted by the Finance Documents (including,
without limitation, notification of receivables security to third party debtors
until a Declared Default has occurred provided that, for the avoidance of doubt,
if it is only the perfection of security which would give rise to such a
material adverse effect then the security will still be granted but not
perfected). The registration of security interests in intellectual property will
only be in respect of material intellectual property in the UK, the EU and the
USA subject to the general principles set out in these Agreed Security
Principles;

 

(viii)no guarantee from, or security will be required to be given by, persons or
over (and no consent shall be required to be sought with respect to) assets
which are required (by contracts entered into prior to (and not in contemplation
of) the acquisition of such acquired indebtedness) to support acquired
indebtedness to the extent such acquired indebtedness is permitted by this
Agreement to remain outstanding after an acquisition unless such guarantees or
security are permitted or not otherwise prohibited under the terms of such
acquired indebtedness. No member of a target group acquired pursuant to an
acquisition not prohibited by this Agreement shall be required to become a
Guarantor or grant security with respect to the Facilities if prevented by the
terms of the documentation governing that acquired indebtedness to the extent
entered into prior to (and in contemplation of) such acquisition;

 

(ix)no title investigations or other diligence on assets will be required an no
title insurance will be required;

 

(x)guarantees and security will not be required from or over the assets of, any
joint venture or similar arrangement, any minority interest or any member of the
Group that is not wholly-owned by another member of the Group to the extent the
constituent documents of such joint venture or similar arrangement, minority
interest or member of the Group that is not wholly-owned by another member of
the Group prohibit granting guarantees and security provided that reasonable
endeavours to obtain consent to charging any such assets (where otherwise
prohibited) shall be used by the Group for a specified period of time, provided
that no Obligor shall be required to take any action to obtain the consent, if
in the view of the Company, such action would be materially adverse to the
interests of the Group or any member thereof;

 

Page 38

 

 

(xi)Other than share security over an Obligor’s subsidiaries that are
Guarantors, all security shall be governed by (subject to the final sentence of
this paragraph) the law of and secure assets located in the jurisdiction of
incorporation of that Obligor. Share security over any subsidiary will be
governed by the law of the place of incorporation of that subsidiary. With
respect to any Obligor with material assets outside its jurisdiction of
incorporation such security (if any) over such assets shall be governed by the
laws of the jurisdiction in which such material assets are located (subject
always to the other provisions of these Agreed Security Principles);

 

(xii)no perfection action will be required in jurisdictions where or Obligors
are not incorporated (other than in respect of security over intercompany
receivables, notification of intra-group companies located in other
jurisdictions than the pledgor(s)) but perfection action may be required in the
jurisdiction of incorporation of one Obligor in relation to security granted by
another Obligor incorporated in a different jurisdiction;

 

(xiii)other than a general security agreement and related filing, no perfection
action will be required with respect to assets of a type not owned by members of
the Group; and

 

(xiv)Chargors incorporated in England & Wales shall enter into a floating charge
which enables the Security Agent to fulfil the criteria of a qualifying floating
charge holder.

 

2.Guarantors and Security

 

(a)Subject to the guarantee limitations set out in Senior Facilities Agreement
relating to guarantee limitations, or, in the case of an Additional Obligor, the
guarantee limitations set out in the relevant Accession Deed, each guarantee
will be an upstream, cross-stream and downstream guarantee, and each guarantee
and security will be for all liabilities of the Obligors under the Finance
Documents in accordance with, and subject to, the requirements of the Agreed
Security Principles in each relevant jurisdiction. The Transaction Security
Documents will secure all liabilities of the Obligors under the Finance
Documents, in each case in accordance with, and subject to, the requirements of
the Agreed Security Principles in each relevant jurisdiction.

 

(b)Where an Obligor pledges shares, the security document will be governed by
the laws of the company whose shares are being pledged and not by the law of the
country of the pledgor. Subject to these principles, the shares in each
Guarantor shall be secured. The shares held by a Guarantor in a Subsidiary that
is not a Guarantor shall not be required to be the subject of Security.

 

(c)To the extent legally effective, all security shall be given in favour of the
Security Agent and not the Finance Parties individually. “Parallel debt”
provisions will be used where necessary; such provisions will be contained in
the Intercreditor Agreement and not the individual security documents unless
required under local laws. To the extent legally possible, there should be no
action required to be taken in relation to the guarantees or security when any
Bank assigns or transfers any of its participation in the Facilities to a New
Lender.

 

Page 39

 

 

(d)Unless otherwise expressly agreed in any Finance Documents, the Guarantors
will not be required to pay or be liable for any costs of any re-execution,
notarisation, re-registration, amendment or other perfection requirement for any
security on any assignment or transfer by the Mandated Lead Arrangers or any
Existing Lender to a New Lender and the relevant costs or fees shall be for the
account of the New Lender.

 

(e)Any security document shall only be required to be notarised or notarially
certified if required by law in order for the relevant security to become
effective, enforceable or admissible in evidence.

 

3.Terms of Security Documents

 

The following principles will be reflected in the terms of any security taken as
part of this transaction:

 

(a)the security will be first ranking, to the extent possible;

 

(b)security will not be enforceable until a Declared Default has occurred;

 

(c)the Security Agent, Lenders and Hedging Counterparties shall only be able to
exercise a power of attorney following the occurrence of a Declared Default or
failure by the relevant Obligor to perform a perfection obligation under or
relating to a Finance Document within 10 Business Days of notice by the Security
Agent;

 

(d)subject to the legal requirements in the relevant jurisdictions, the
Transaction Security Documents should only operate to create and perfect
security rather than to impose new commercial obligations, interfere
unreasonably with the operation of its business or repeat clauses contained in
other Finance Documents, accordingly (i) they should not contain additional
representations, undertakings or indemnities (including, without limitation, in
respect of insurance, information maintenance or protection of assets or the
payment of fees, costs and expenses) unless these are the same as or consistent
with those contained in this Agreement and/or are required for the creation and
perfection of security or are given in a “third party” security document and
(ii) nothing in any Transaction Security Document shall (or be construed to)
prohibit any transaction, matter or other step or dealing whatsoever in relation
to any asset the subject of any Transaction Security Document if not prohibited
by the terms of the other Finance Documents;

 

(e)no security will be granted over parts, stock, moveable plant or equipment or
receivables if it would require labelling, segregation or periodic listing or
specification of such parts, stock, moveable plant, equipment or receivables;

 

(f)other than filing security documents at Companies House or other similar or
equivalent general filings in any relevant jurisdictions other than England and
Wales) perfection will not be required in respect of (i) vehicles and other
assets subject to certificates of title or (ii) letter of credit rights and tort
claims (or applicable law equivalent);

 

(g)in no event shall control agreements (or perfection by control or similar
arrangements) be required with respect to any assets (including deposits or
securities accounts) unless the Finance Documents expressly provide for any
asset to be subject to specific restrictions on use;

 

Page 40

 

 

(h)information, such as lists of assets, will be provided if, and only to the
extent required by local law to be provided to perfect or register the security
and, when required, shall be provided no more frequently than annually (unless
required more frequently under local law) or, following an Event of Default
which is outstanding, on the Security Agent’s reasonable request;

 

(i)Security will, where legally possible and practicable, automatically create
security over future assets of the same type as those already secured; where
local law requires supplemental pledges or notices to be delivered in respect of
future acquired assets in order for effective security to be created over that
class of asset, such supplemental pledges or notices shall be provided at
intervals no more frequent than twelve Months (unless required more frequently
under local law) or following an Event of Default which is continuing on the
request from the Security Agent (acting reasonably); and

 

(j)each Transaction Security Document must contain a clause which records that
if there is a conflict between the Transaction Security Document and this
Agreement, or the Intercreditor Agreement then (to the fullest extent permitted
by law) the provisions of this Agreement or of the Intercreditor Agreement, as
applicable, will take priority over the provisions of the Transaction Security
Document.

 

4.Bank Accounts

 

If an Obligor grants Security over its bank accounts it shall be free to deal
with, operate, open and close and transact business in relation to those
accounts (other than any accounts which are specifically blocked) in the course
of its business until the occurrence of a Declared Default.

 

Where “fixed” Security is required, if required by applicable law to create or
perfect the Security and without disrupting the operation of the account, notice
of the Security or a form of account control agreement will be served on the
account bank within 10 Business Days of the Security being granted and the
Obligor shall use its reasonable endeavours to obtain an acknowledgement of that
notice or acceptance of such account control agreement within 20 Business Days
of service If the Obligor has used its reasonable endeavours but has not been
able to obtain acknowledgement or acceptance its obligation to obtain
acknowledgement or acceptance shall cease on the expiry of that 20 Business Day
period. Irrespective of whether notice of the security is required for
perfection, if the service of notice would prevent the Obligor from using a bank
account in the course of its business no notice of security shall be served
until the occurrence of a Declared Default.

 

Any security over bank accounts shall be subject to any prior security interests
in favour of the account bank which are created either by law or in the standard
terms and conditions of the account bank, to the extent that these have not been
waived by the account bank in its acknowledgement. The notice of security shall
request these are waived by the account bank but the Obligor shall not be
required to change its banking arrangements if these security interests are not
waived or only partially waived. The pledgors shall be required to request and
obtain the consent of the account bank for the creation of the security over its
bank accounts, in case of any relevant negative pledge covenants of the account
bank.

 

If required under applicable law security over bank accounts will be registered
subject to the general principles set out in these Agreed Security Principles.

 

Page 41

 

 

Any security over bank accounts shall provide for the release of such security
if the relevant account holder decides to close such bank account provided that,
at the time of the closure, (i) there is no Declared Default and (ii) the
positive balance of such bank account is transferred to a pledged account.

 

5.Fixed Assets

 

If an Obligor grants security over its material fixed assets it shall be free to
deal with those assets in the course of its business as not otherwise prohibited
by the terms of the Finance Documents until the occurrence of a Declared
Default.

 

No notice (other than security registrations), whether to third parties or by
attaching a notice to the fixed assets, shall be prepared or given until the
occurrence of a Declared Default.

 

If required or necessary to create, protect, preserve or enforce under
applicable law Security over fixed assets will be registered subject to the
general principles set out in these Agreed Security Principles.

 

6.Insurance Policies

 

An Obligor may grant Security over its insurance policies in respect of which
claims thereunder may be mandatorily prepaid, provided that such insurance
policy does not prohibit such Security to be so granted.

 

If required by local law to perfect the security or customary under agreed local
market practice, notice of the Security will be served on the insurance provider
within five Business Days of the security being granted and the Obligor shall
use its reasonable endeavours to obtain an acknowledgement of that notice within
20 Business Days of service. If the Obligor has used its reasonable endeavours
but has not been able to obtain acknowledgement its obligation to obtain
acknowledgement shall cease on the expiry of that 20 Business Day period.

 

Other than in jurisdictions where customary to do so (including, for the
avoidance of doubt, the State of New York but excluding England and Wales), no
loss payee or other endorsement shall be made on the insurance policy and no
Secured Party will be named as co-insured.

 

7.Intellectual Property

 

If an Obligor grants Security over its material intellectual property it shall
be free to deal with those assets in the course of its business (including,
without limitation, allowing its intellectual property to lapse if no longer
material to its business) until the occurrence of a Declared Default.

 

No Security shall be granted over any intellectual property which cannot be
secured under the terms of the relevant licensing agreement. No notice shall be
prepared or given to any third party from whom intellectual property is licensed
until a Declared Default has occurred.

 

Security over material intellectual property will be registered under the law of
that security document, the law under which the Obligor is regulated or at any
relevant supra-national registry (such as the European Union), in each case
subject to the general principles set out in these Agreed Security Principles.

 

Security over intellectual property rights will be taken on an “as is, where is”
basis and no Obligor will be required to procure any changes to, or corrections
of filings on any registers.

 

Page 42

 

 

8.Hedging

 

Security over hedging receivables will be granted subject to the same provisions
as for trade receivables and subject to the Intercreditor Agreement.

 

9.Intercompany Receivables

 

Subject to the final paragraph below, if an Obligor grants Security over its
intercompany receivables it shall, subject to the terms of this Agreement and
the Intercreditor Agreement, be free to deal with those receivables in the
course of its business until the occurrence of a Declared Default.

 

If required by local law to perfect the Security, notice of the Security will be
served on the relevant debtor within five Business Days of the Security being
granted and in the case of a relevant debtor that is wholly owned by a member of
the Group, such debtor shall acknowledge such notice within 5 Business Days of
receipt or, in the case of any other debtor, the Obligor shall use its
reasonable endeavours to obtain an acknowledgement of that notice within 20
Business Days of service. If the Obligor has used its reasonable endeavours but
has not been able to obtain acknowledgement its obligation to obtain
acknowledgement shall cease on the expiry of that 20 Business Day period.
Subject to the paragraph below, irrespective of whether notice of the security
is required for perfection, if the service of notice would prevent the Obligor
from dealing with an intercompany receivable in the course of its business no
notice of security shall be served until the occurrence of a Declared Default.

 

If required under local law security over intercompany receivables will be
registered subject to the general principles set out in these Agreed Security
Principles.

 

10.Trade Receivables

 

If an Obligor grants Security over its trade receivables it shall be free to
deal with those receivables in the course of its business until the occurrence
of a Declared Default.

 

No notice of Security may be prepared or shall be served until the occurrence of
a Declared Default.

 

No Security will be granted over any trade receivables which cannot be secured
under the terms of the relevant contract.

 

If required under local law security over trade receivables will be registered
subject to the general principles set out in these Agreed Security Principles.

 

Any list of trade receivables required shall not include details of the
underlying contracts.

 

11.Shares

 

Until a Declared Default has occurred, the charging Obligor will be permitted to
retain and to exercise voting rights appertaining to any shares charged by it,
provided that such voting rights are not exercised in a manner which is
reasonably likely to adversely affect the validity or enforceability of the
security or is reasonably likely to cause an Event of Default to occur, and the
company whose shares have been charged will be permitted to pay dividends
upstream on pledged shares to the extent permitted under the Finance Documents
with the proceeds to be available to the Group.

 

Page 43

 

 

Where customary and/or required by applicable law, on or as soon as reasonably
practicable following execution of the share charge or pledge (i) the share
certificate and a stock transfer form executed in blank will be provided to the
Security Agent and (ii) the share certificate or shareholders’ register,
shareholders’ individual accounts or companies’ registers will be endorsed or
written up or updated and the endorsed share certificate or a copy of the
written up or updated register provided to the Security Agent.

 

Unless the restriction is required by law or regulation or cannot be removed
without consent from a third party (provided that the relevant Obligor shall use
its reasonable endeavours to obtain such consent for a period of 20 Business
Days from request by the Security Agent (acting reasonably) if it reasonably
determines that such endeavours will not involve placing material commercial
relationships with third parties in jeopardy, it being understood that if the
Obligor has used its reasonable endeavours but has not been able to obtain such
consent its obligation to obtain such consent shall cease on the expiry of that
20 Business Day period), the constitutional documents of the company whose
shares have been charged will be amended to remove any restriction on the
transfer or the registration of the transfer of the shares on the taking or
enforcement of the security granted over them.

 

12.Real Estate

 

An Obligor shall not be required to grant security over its real estate, unless
otherwise agreed.

 

There will be no obligation to investigate title, provide surveys or other
insurance or environmental due diligence.

 

13.Release of Security

 

Unless required by local law the circumstances in which the security shall be
released should not be dealt with in individual security documents but, if so
required, shall, except to the extent required by local law, be the same as
those set out in this Agreement and the Intercreditor Agreement.

 

Page 44

 

 

SCHEDULE 2
Key Financial Definitions

 

“Acceptable Funding Sources” means:

 

(a)new shareholder injections into the Group from the sponsor or any other
investors (whether by way of subscription for shares, capital contribution or
otherwise);

 

(b)permitted financial indebtedness;

 

(c)Consolidated Net Income; and

 

(d)cash and cash equivalent investments held by members of the Group provided
that such cash and cash equivalent investments would otherwise have been able to
be used at that time to make a permitted payment,

 

in each case to the extent Not Otherwise Applied.

 

“Acquisition Costs” means all fees, commissions, costs and expenses, stamp,
registration and other Taxes incurred by the Company or any other member of the
Group in connection with the integration of the Target Group with the Group, the
Acquisition or the negotiation, preparation, execution, notarisation and
registration of the transaction documents together with all fees, commissions,
costs and expenses incurred by the Target Group in connection with the
integration of the Target Group with the Group, the transaction documents or the
Acquisition (including for the avoidance of doubt Hedging Costs and all payments
made to any hedge counterparty, and all fees, costs and expenses incurred, by
any member of the Target Group in connection with the close-out or termination
on or about the Closing Date of any hedging arrangements in respect of which any
member of the Target Group was a party (including without limitation in respect
of interest rate, exchange rate and commodity price risk hedging)).

 

“Borrowings” means, at any time, the aggregate outstanding principal, capital or
nominal amount of the Financial Indebtedness of members of the Group (on a
consolidated basis) other than, without double counting:

 

(a)any indebtedness referred to in paragraph (g) of the definition of Financial
Indebtedness;

 

(b)the amount of any liability of pension obligations of the Group

 

(c)any indebtedness under any operating lease;

 

(d)in relation to the minority interests line in the balance sheet of any member
of the Group;

 

(e)any Financial Indebtedness represented by shares (except for shares
redeemable mandatorily or at the option of the holder prior to the Maturity Date
of Facility B);

 

(f)all contingent liabilities under a guarantee, indemnity, bond, standby or
documentary letter of credit to the extent such contingent liabilities do not
guarantee or support Financial Indebtedness of a member of the Group and are not
treated as Financial Indebtedness in accordance with the applicable accounting
principles unless the underlying liability covered by such instrument has become
due and payable and remains unpaid;

 

(g)any liability to a financial institution in respect of any credit for goods
and services raised in the ordinary course and outstanding for more than 120
days after its customary date of payment; and

 

(h)any intra-Group liabilities.

 

Page 45

 

 

“Business Acquisition” means the acquisition of or investment in a company or
any shares (or equivalent ownership interests), or securities or a business,
real estate, or undertaking (or, in each case, any interest in any of them) or
the incorporation of a company (including a permitted acquisition or permitted
joint venture).

 

“Capital Expenditure” means any cash expenditure (other than expenditure in
respect of Business Acquisitions or Restructuring Cost) which, in accordance
with the applicable accounting principles, is treated as capital expenditure
(including the capital element only of any expenditure incurred in connection
with a Capitalised Lease Obligation (other than for purposes of Consolidated
Cash Flow)), and only taking into account the actual cash payment made where
assets are replaced and part of the purchase price is paid by way of part
exchange.

 

“Capitalised Lease Obligations” means, with respect to any person, any rental
obligation (including any hire purchase payment obligation) which, under the
applicable accounting principles, would be required to be treated as a finance
lease or otherwise capitalised in the audited financial statements of that
person, but only to the extent of that treatment.

 

“Cash” means, at any time (without double counting), cash at bank or in hand
(including money market deposits, cash in tills and safes) or in transit, or
payments made by cheques or debit cards which are yet to be received in cleared
funds, or any credit balance on an account to which a member of the Group (or
together with other members of the Group) is beneficially entitled (together,
when used in this definition “moneys”) and for so long as:

 

(a)repayment of those moneys is not contingent on the prior discharge of any
other indebtedness of any Group member other than any indebtedness included in
the calculation of Consolidated Total Net Debt;

 

(b)there is no Security over those moneys except for Permitted Security (to the
extent it relates to indebtedness that is included in the calculation of
Consolidated Total Net Debt) or standard rights of set-off normally required by
banks; and

 

(c)such moneys (save for and in such circumstances, moneys securing the
indebtedness referred to in parentheses in paragraphs (a) and (b) above) are
capable of being applied in repayment or prepayment of indebtedness included in
the calculation of Consolidated Total Net Debt within 90 days without any
condition other than the lapse of time and notice (together with any ordinary
course administrative clearances if any) being given having to be fulfilled.

 

“Cash Equivalent Investments” means at any time:

 

(a)certificates of deposit maturing within one year after the relevant date of
calculation and issued by an acceptable bank;

 

(b)any investment in marketable debt obligations issued or guaranteed by any
government of a country which has a rating for its short-term unsecured and non
credit-enhanced debt obligations of A-1 or higher by Standard & Poor’s Rating
Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody’s
Investor Services Limited or by an instrumentality or agency of any such
government having an equivalent credit rating, maturing within one year after
the relevant date of calculation and not convertible or exchangeable to any
other security;

 

(c)commercial paper not convertible or exchangeable to any other security:

 

(i)for which a recognised trading market exists;

 

Page 46

 

 

(ii)issued by an issuer incorporated in a country, the government of which has a
rating for its short-term unsecured and non credit-enhanced debt obligations of
A-1 or higher by Standard & Poor’s Rating Services or P-1 or higher by Moody’s
Investor Services Limited or F1 or higher by Fitch Ratings Ltd or by an
instrumentality or agency of any such government having an equivalent credit
rating;

 

(iii)which matures within one year after the relevant date of calculation; and

 

(iv)which has a credit rating of either A-1 or higher by Standard & Poor’s
Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody’s
Investor Services Limited, or, if no rating is available in respect of the
commercial paper, the issuer of which has, in respect of its short-term
unsecured and non-credit enhanced debt obligations, an equivalent rating;

 

(d)Sterling bills of exchange eligible for rediscount at the Bank of England and
accepted by an acceptable bank (or their dematerialised equivalent);

 

(e)any investment in money market funds which (i) have a credit rating of either
A-1 or higher by Standard & Poor’s Rating Services or F1 or higher by Fitch
Ratings Ltd or P-1 or higher by Moody’s Investor Services Limited, (ii) which
invest substantially all their assets in securities of the types described in
paragraphs (a) to (d) above and (iii) can be turned into cash on not more than
30 days’ notice; or

 

(f)any other debt security approved by the Majority Lenders,

 

in each case, to which any member of the Group is alone (or together with other
members of the Group) beneficially entitled at that time and which is not issued
or guaranteed by any member of the Group or subject to any Security (other than
Permitted Security (to the extent it relates to indebtedness that is included in
the calculation of Consolidated Total Net Debt)).

 

“Consolidated Cash Flow” means, in respect of the Group and any Relevant Period,
Consolidated EBITDA:

 

(a)less any increase in Working Capital;

 

(b)plus any decrease in Working Capital;

 

(c)less all amounts actually paid in cash by members of the Group during the
Relevant Period in respect of Capital Expenditure;

 

(d)less all amounts actually paid in cash by members of the Group during the
Relevant Period in respect of Business Acquisitions other than the Acquisition;

 

(e)less Pension Items paid in cash to the extent not included in Consolidated
EBITDA;

 

(f)less amounts paid in cash or falling due for payment during such period in
respect of income tax, corporation tax, withholding tax, trade tax or any other
equivalent;

 

(g)plus the amount of any tax credit or rebate received in cash;

 

(h)plus exceptional, one-off and non-recurring items received in cash (to the
extent not included in Consolidated EBITDA);

 

Page 47

 

 

(i)without double counting, less exceptional, one-off and non-recurring items
and restructuring costs and reorganisation costs paid in cash (to the extent not
taken into account in calculating Consolidated EBITDA);

 

(j)plus (to the extent not included in Consolidated EBITDA) the amount of any
dividends or other profit distributions or loan repayments or prepayments or
other cash payments (including royalties) received in cash (and grossed up for
any withholding tax) by any member of the Group during such period from any
entity or investment (including joint ventures and associates) which is not
itself a member of the Group;

 

(k)less (to the extent not included in Consolidated EBITDA) amounts invested in
cash in permitted joint ventures or unrestricted subsidiaries;

 

(l)(to the extent not taken into account in or excluded by any other paragraph
of this definition) less all non-cash credits and plus all non-cash debits and
other non-cash charges included in establishing Consolidated EBITDA;

 

(m)(to the extent included in Consolidated EBITDA or in any other paragraph of
this definition) excluding the effect of all cash movements associated with the
Acquisition and excluding any related Acquisition Costs;

 

(n)less any fees, costs or charges of a non-recurring nature related to any
equity offering, investments, acquisitions or Financial Indebtedness permitted
under the finance documents (whether or not successful) and paid in cash;

 

(o)plus to the extent not already taken into account as exceptional items under
the paragraphs above or applied to exclude items as contemplated under the
paragraphs above and to the extent not already included in calculating
Consolidated EBITDA, net cash proceeds for any Asset Sale or other disposal
received by the Group which it is permitted to retain and which are not required
to be reinvested or applied in mandatory prepayment;

 

(p)less any amounts paid outside the Group to minority shareholders or partners
of members of the Group or pursuant to a permitted payment to the extent not
already taken into account in calculating Consolidated EBITDA;

 

(q)without double counting, for any Quarter Date falling at the end of a
Financial Year, less any amounts that constitute Trapped Cash at the last day of
the applicable Relevant Period and plus any amounts that were deducted under
this paragraph for the calculation of this definition for the Quarter Date
ending on the immediately previous Financial Year but no longer constitute
Trapped Cash;

 

(r)less any amounts claimed under loss of profit, business interruption or
equivalent insurance in respect of such period to the extent not received in
cash during that Financial Year; and

 

(s)(to the extent not included in calculating Consolidated Total Net Cash
Interest Expenses) plus the amount of any cash receipts and less the amount of
any cash payments paid, under any Treasury Transaction by a member of the Group
during the Relevant Period (including any one-off cash payments, premia fees,
costs or expenses in connection with the purchase of a Treasury Transaction or
which arise upon maturity, close-out or termination of any Treasury
Transaction),

 

Page 48

 

 

and so that no amount shall be added (or deducted) more than once, and excluding
amounts already taken into account in calculating Consolidated EBITDA, and there
shall also be excluded:

 

(i)the effect of all cash movements (including purchase price adjustments or one
off consolidation effects) associated with permitted acquisitions, permitted
joint venture investments or investments in unrestricted subsidiaries and
transaction costs, debt purchase transactions and any share options relating to
a member of the Group existing at the Closing Date; and

 

(ii)any item expressed to be deducted to the extent at any time allocated by the
Company as funded directly or indirectly from Acceptable Funding Sources (other
than under paragraph (b) thereof).

 

“Consolidated Debt Service” for any period and in relation to the Group, means
Consolidated Total Net Cash Interest Expenses of the Group for such period, plus
all scheduled repayments (as reduced by any prior repayments) of Borrowings on a
consolidated basis which fell due for repayment or prepayment (excluding, for
the avoidance of doubt, any voluntary or mandatory prepayment) during such
period, but excluding any principal amount which fell due under any overdraft or
revolving credit facility and which was available for simultaneous redrawing
according to the terms of such facility or under the RCF and any Ancillary
Facility or which would have been available for simultaneous redrawing but for a
cancellation or termination of the available facility by a member of the Group
and excluding any repayment of Financial Indebtedness existing on the Closing
Date which is required to be repaid under the finance documents and excluding
any repayment of amounts under the finance documents which are refinanced by a
replacement facility or notes permitted under the finance documents.

 

“Consolidated EBIT” for any period (and without double counting), means the
consolidated profits of the Group (including the results from discontinued
operations) from ordinary activities before taxation:

 

(a)before taking into account any accrued interest (including capitalised
interest and amortisation of arrangement, underwriting and participation fees
and similar issue costs), commission, fees (including agency fees), discounts
and other finance charges and losses (including repayment and prepayment
premiums) incurred or payable or owed to any member of the Group in respect of
Borrowings (but calculated to disregard the carve outs in paragraphs (a), (d),
(e), (f) and (h) of that definition);

 

(b)after including the amount of profit and deducting the amount of any loss of
any member of the Group which is attributable to any third party (not being a
member of the Group) which is a shareholder (or holder of a similar interest) in
such member of the Group;

 

(c)before taking into account any (w) unrealised gains or losses on hedging or
other derivatives or (x) realised gains or losses on hedges or other derivatives
entered in relation to the Facilities, an Additional Facility or any other
Permitted Alternative Debt or any acquisition indebtedness or any acquired
indebtedness or any refinancing indebtedness or otherwise in connection with any
purpose other than in the ordinary course of trading (including for the
avoidance of doubt before taking into account mark-to-market adjustments on
currency swaps) or (y) exchange rate gains or losses arising due to the
re-translation of the balance sheet items but (z) after taking into account any
realised gains on hedges or other derivatives entered into in the ordinary
course of trading (but before taking into account realised losses on such hedges
or derivatives);

 

(d)before taking into account any gain or loss arising from an upward or
downward revaluation of any asset or liability or on the disposal or write down
of an asset or liability or any non-cash charges, expenses or negative
adjustments (or minus non-cash gains or positive adjustments) relating to any
adjustments arising by reason of the application of certain accounting
principles with respect to ASC 805 (relating to changes in accounting for
earn-out obligations);

 

Page 49

 

 

(e)before taking into account any items (positive or negative) of a one-off,
non-recurring, extraordinary or exceptional nature;

 

(f)plus any amounts claimed under loss of profit, business interruption or
equivalent insurance;

 

(g)before deducting Restructuring Costs and Hedging Costs;

 

(h)before deducting any Acquisition Costs and Permitted Acquisition Costs;

 

(i)before deducting Pension Items and any expenses relating to pensions
including service costs and pension interest costs;

 

(j)plus the amount received in cash by members of the Group through dividends,
profit distributions, returns on investments, royalties or similar payments by
any entity (which is not a member of the Group) in which any member of the Group
has an ownership interest (grossed up in respect of any applicable withholding
tax and including any repayment to the Group of loans to, or other investments,
in associates or joint ventures);

 

(k)before deducting any fees, costs or charges related to any actual or
attempted equity offering or equity transaction or sale, investments,
acquisitions or Financial Indebtedness permitted under the finance documents
(whether or not successful) and before deducting agency and trustee fees under
permitted financial indebtedness;

 

(l)before deducting any amount referred to in the definition of permitted
payment;

 

(m)before taking into account any expense referable to equity settled share
based compensation of employees or management or profit sharing schemes or
compensation or payments to departing management;

 

(n)before taking into account any gains or losses arising on litigation
settlements or with respect to indemnification provisions or similar agreement
or insurance;

 

(o)before taking into account (i) any costs or expenses relating to plant and/or
business relocation, (ii) any research, development or other similar costs, and
(iii) any costs that are costs of the type that are capitalised in the base case
model;

 

(p)before deducting the impact of any non-cash provisions; and

 

(q)plus any amount of tax that would be accounted for below Consolidated EBIT in
accordance with the applicable accounting principles,

 

provided that any profit or loss on any Notifiable Debt Purchase Transaction
shall not be taken into account in calculating Consolidated EBIT.

 

“Consolidated EBITDA” for any period and without double counting means the
Consolidated EBIT of the Group plus the consolidated depreciation and
amortisation (including, for the avoidance of doubt and without double counting,
lease depreciation charges and amortisation of acquisition goodwill) and any
impairment costs of the Group (each as defined by reference to the consolidated
financial statements of the Group).

 

“Consolidated Pro Forma EBITDA” for any Relevant Period, means Consolidated
EBITDA as adjusted in accordance with this Schedule 2.

 

“Consolidated Senior Secured Net Debt” means the principal amount of all
Borrowings of the Group under Facility B, the RCF, any Incremental Facility, any
acquisition indebtedness, any acquired indebtedness, any refinancing
indebtedness and under any Permitted Alternative Debt solely to the extent such
Borrowings rank in right of payment and security at least pari passu with the
Facility B and are guaranteed by (and have the right to receive guarantees from)
at least the same guarantors as under Facility B and benefits from at least the
same security which secures the Facility B (ignoring, where relevant for the
purposes of assessing such equivalency, any hardening periods or guarantee
limitations) or otherwise is designated as “senior secured liabilities” (or any
equivalent term) under the Intercreditor Agreement, less the aggregate amount at
that time of Cash and Cash Equivalent Investments held by members of the Group.

 

Page 50

 

 

“Consolidated Total Net Cash Interest Expenses” for any period and in relation
to the Group, means:

 

(a)the aggregate of interest, commitment or non-utilisation fees, annual agency
fees and other recurring fees (other than as excluded in paragraph (g) below)
relating to the Facility B, the RCF, any Incremental Facility, any acquisition
indebtedness, any acquired indebtedness, any refinancing indebtedness and any
Permitted Alternative Debt accruing (whether or not paid) during a period plus
or minus net amounts receivable or payable or accrued by the Group under the
hedging agreements or other Treasury Transactions in respect of interest but
excluding any one-off cash payments, premia fees, costs or expenses in
connection with the purchase of a Treasury Transaction or which arise upon
maturity, close-out or termination of any Treasury Transaction and any
unrealised gains or losses on any Treasury Transactions;

 

(b)plus interest, commitment fees and other fees on any other Borrowings
(including the interest element of any finance leases) accruing (whether or not
paid) during a period;

 

(c)plus discount and acceptance fees payable by the Group in connection with any
acceptance credit, bill discounting debt factoring or other like arrangement;

 

(d)less interest income accrued (whether or not paid) for the account of a
member of the Group;

 

(e)excluding the non-cash element of interest on any Financial Indebtedness
during that period;

 

(f)excluding any amortisation of Acquisition Costs or Permitted Acquisition
Costs; and

 

(g)excluding all one-off agency, arrangement, underwriting, amendment, consent
or other front end, one-off or similar non-recurring fees (and any amortisation
thereof); repayment and prepayment premiums, fees or costs; any deemed finance
charges or notional interest in relation to pension liabilities and any
withholding tax (or gross up obligation) on interest receivable, received,
payable or paid.

 

“Consolidated Total Net Debt” means the principal amount of all Borrowings of
the Group less the aggregate amount at that time of Cash and Cash Equivalent
Investments held by members of the Group.

 

“Excess Cash Flow” means in relation to any Financial Year of the Group, the
result (if positive) of Consolidated Cash Flow for such period less (to the
extent otherwise included) the aggregate of:

 

(a)Consolidated Debt Service for such Financial Year;

 

(b)to the extent included in Consolidated Cash Flow, any mandatory prepayments
of Financial Indebtedness made during such period but only to the extent that
any Financial Indebtedness so prepaid is not available for immediate redrawing
and disregarding any such prepayments to the extent funded from the proceeds of
Permitted Financial Indebtedness;

 

(c)to the extent included in Consolidated Cash Flow, any voluntary prepayments
of Financial Indebtedness made during such period but only to the extent that
any Financial Indebtedness so prepaid is not available for immediate redrawing
and disregarding any such prepayments to the extent funded from the proceeds of
Permitted Financial Indebtedness;

 

Page 51

 

 

(d)to the extent included in Consolidated Cash Flow, the cash proceeds of any
subscription (to the extent paid in cash) for common and/or preference shares of
the Group by way of any capital contribution to the Group or any raising of
funds by way of private placement of ordinary or preference share capital;

 

(e)to the extent included in Consolidated Cash Flow, the cash proceeds of new
shareholder injections;

 

(f)any net cash proceeds referred to in paragraph (o) of Consolidated Cash Flow;

 

(g)any amount which is not deducted from the definition of Consolidated Cash
Flow as a result of the operation of paragraph (ii) of the proviso to that
definition;

 

(h)any Pending Acquisition Amount (except to the extent that the Pending
Acquisition Amount is funded or refinanced from the proceeds of an Incremental
Facility or Permitted Alternative Debt) and any Pending Restructuring Amount
(except to the extent that the Pending Restructuring Amount is funded or
refunded to the extent funded from the proceeds of an Incremental Facility or
Permitted Alternative Debt);

 

(i)amounts claimed under loss of profit, business interruption or equivalent
insurance in respect of such period to the extent not received in cash during
that Financial Year;

 

(j)the amount of any committed Capital Expenditure contracted for during that
Financial Year but unspent during such Financial Year (“Pending Capital
Expenditure Amount”);

 

(k)tax accrued and/or payable during or in respect of such Financial Year but
not overdue (save if under dispute) and not paid (“Pending Tax Amount”); and

 

(l)any cash amounts attributable to a person, property, business or material
fixed asset that a member of the Group has committed to transfer or otherwise
dispose of during such Financial Year and that is to be transferred or otherwise
disposed of in the immediately following Financial Year (“Pending Disposal
Cash”),

 

plus any Pending Acquisition Amount, Pending Capital Expenditure Amount Pending
Restructuring Amount, Pending Tax Amount or Pending Disposal Cash already
subtracted from Excess Cash Flow in respect of the previous Financial Year and
which is not actually spent in the current Financial Year or, in relation to
Pending Disposal Cash, in respect of which a disposal has not occurred.

 

“Financial Indebtedness” means any indebtedness for or in respect of (without
double counting):

 

(a)moneys borrowed;

 

(b)any amount raised by acceptance under any acceptance credit or bill
discounting facility or dematerialised equivalent;

 

(c)any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar instrument (but not trade
instruments);

 

(d)the amount of any liability in respect of finance leases;

 

(e)receivables sold or discounted (other than any receivables to the extent they
are sold or discounted on a non-recourse basis or where any recourse in respect
of such receivables otherwise sold on a non-recourse basis is limited to
customary indemnities, warranties and/or security);

 

Page 52

 

 

(f)any amount raised under any other transaction (including any forward sale or
purchase agreement) required to be accounted for as a borrowing in accordance
with the applicable accounting principles;

 

(g)any Treasury Transaction (and, when calculating the value of any Treasury
Transaction, only the marked to market net value (or, if any actual amount is
due as a result of the termination or close-out of that Treasury Transaction,
that amount) shall be taken into account);

 

(h)amounts raised by any issue of shares which are expressed to be redeemable
mandatorily or at the option of the holder prior to the Maturity Date for
Facility B;

 

(i)any counter-indemnity obligation in respect of a guarantee, indemnity bond,
standby or documentary letter of credit or any other instrument issued by a bank
or financial institution in respect of an underlying liability (excluding any
Trade Instruments) of an entity which is not a member of the Group which
liability would fall within one of the other paragraphs of this definition;

 

(j)the amount of any liability in respect of any credit for goods and services
raised in the ordinary course and outstanding for more than 120 days after its
customary date of payment; and

 

(k)the amount of any liability in relation to any earn out arrangements,
contingent consideration arrangements, post-closing payment adjustments or other
adjustments of purchase price, indemnification or similar obligations in
connection with any acquisition in each case to the extent required to be
account for as a borrowing in accordance with the applicable accounting
principles;

 

(l)the amount of any liability in respect of any guarantee for any of the items
referred to in paragraphs (a) to (j) above,

 

but excluding, in all cases, for the avoidance of doubt all pension-related or
post-employment liabilities; intra-day exposures; indebtedness in respect of any
lease, concession or licence treated as an operating lease under the applicable
accounting principles (as in force at the date of the Senior Facilities
Agreement); Financial Indebtedness arising under Treasury Transactions except to
the extent included in paragraph (g) above; obligations in respect of any
licence, permit or other approval arising in the ordinary course of business; or
in respect of trade instruments; and so that, where the amount of Financial
Indebtedness falls to be calculated or where the existence (or otherwise) of any
Financial Indebtedness is to be established Financial Indebtedness in respect of
uncashed cheques issued by a member of the Group in the ordinary course of
trading shall not be taken into account.

 

“Financial Quarter” means the period commencing on the day after one Quarter
Date and ending on the next Quarter Date.

 

“Financial Year” means each annual accounting period of the Group or the Group,
as relevant, ending on 31 December in each year.

 

“Hedging Costs” means any costs incurred by a member of the Group in connection
with the putting in place of any hedging agreements entered into from time to
time.

 

“Not Otherwise Applied” means, in relation to any amount which is proposed to be
applied or included, that such amount has not been (and is not simultaneously
being), included, applied, designated or taken into account in respect of, any
other calculation, use, event, transaction or permission.

 

Page 53

 

 

“Pending Acquisition Amount” means, in respect of any Financial Year (the
“Relevant Financial Year”), the aggregate cash amounts to be paid in respect of
the consideration for permitted acquisitions for which a member of the Group has
entered into a commitment before the end of the Relevant Financial Year.

 

“Pending Restructuring Amount” means, in respect of any Financial Year, the
aggregate cash amounts to be paid in respect of any Restructuring Costs for
which a member of the Group has entered into a commitment before the end of the
Financial Year.

 

“Pension Items” means the current cash service costs attributable to any income
or charge attributable to a post-employment benefit scheme.

 

“Permitted Acquisition Costs” means all fees, commissions, costs and expenses,
stamp, registration and other Taxes incurred by the Company or any other member
of the Group in connection with any permitted acquisition or permitted joint
venture or investment in an unrestricted subsidiary and the negotiation,
preparation, execution, notarisation and registration of related documentation
together with all fees, commissions, costs and expenses incurred by the target
entity in connection with such acquisition or related documentation (including
for the avoidance of doubt any costs relating to the hedging arrangements of the
target entity).

 

“Pro Forma Acquisition Synergies and Cost Savings” means synergies and cost
savings reasonably anticipated by the CEO or CFO or any other authorised
signatory of the Company’s board of directors to be achievable within 12 months
of the later of the relevant testing date and the date of a relevant acquisition
as a result of that acquisition.

 

“Pro Forma Disposal Synergies and Cost Savings” means synergies and cost savings
reasonably anticipated by the CEO or CFO or any other authorised signatory of
the Company’s board of directors to be achievable within 12 months of the later
of the relevant testing date and the date of a disposal as a result of that
disposal.

 

“Pro Forma Group Initiative Synergies and Cost Savings” means synergies and cost
savings reasonably anticipated by the CEO or CFO or any other authorised
signatory of the Company’s board of directors to be achievable within 12 months
of the later of the relevant testing date and the date of a Group Initiative as
a result of that Group Initiative.

 

“Quarter Date” means each of 31 March, 30 June, 30 September and 31 December or
such other dates which correspond to the quarter end dates within each Financial
Year.

 

“Relevant Period” means each period of four consecutive Financial Quarters
ending on a Quarter Date (which for the avoidance of doubt may include periods
prior to the Closing Date).

 

“Restructuring Costs” means costs or expenses relating to cost savings
initiatives, operating expense reductions, transition, business optimisation,
inventory optimisation programmes, software development costs, costs related to
the closure, relocation or consolidation of facilities, retail, administrative
or production locations and other similar items and curtailments (including the
cessation of the Mexican server-based gaming division), consulting fees, signing
costs, retention and completion bonuses, relocation expenses and modifications
to pension and post-retirement employee benefit plans, retraining, severance and
termination, new system designs and implementation costs, business interruption,
reorganisation and other restructuring or cost-cutting measures, carve-outs,
separations, the rationalisation, re-branding, start-up, reduction or
elimination of product lines, assets or businesses (for the avoidance of doubt,
excluding any related Capital Expenditure).

 

Page 54

 

 

“Retained Cash” means, at any time and from time to time to the extent allocated
as such at the option of the Company and to the extent not previously applied or
allocated for a particular purpose, Retained Excess Cash; net cash proceeds
which any member of the Group is permitted to retain and which are not required
to be applied in mandatory prepayment; any prepayments waived (and not taken up
by another lender) or deemed waived by a lender, any amounts received or
receivable from any person which is not a member of the Group for the purpose
of, or with the intention that such amounts are available to be used for, the
relevant expenditure (including under the Acquisition Documents or any
agreements governing any permitted acquisitions (by way of indemnity,
compensation or otherwise)); prepayments under any relevant contractual
arrangements; investment grants; and capital contributions received from
landlords in relation to real property).

 

“Retained Cash Flow” means Excess Cash Flow not required to be applied in
prepayment of Facility B, the RCF or any Incremental Facility or any Permitted
Alternative Debt including for the avoidance of doubt all Excess Cash Flow
generated in the Financial Year ended 31 December [2019]17 and (without double
counting and to the extent deducted from positive Excess Cash Flow in
determining the amount of Excess Cash Flow required to be prepaid (if any) under
the Senior Facilities Agreement) the excess cash flow de minimis amount.

 

“Retained Excess Cash” means accumulated unspent Retained Cash Flow from any
Financial Year of the Group to the extent not utilised or applied in accordance
with the terms of the finance documents and shall for the avoidance of doubt
include all Excess Cash Flow generated in any Financial Year which ends after
the Closing Date but which is not required to be prepaid.

 

“Total Net Leverage Ratio” means the ratio of Consolidated Total Net Debt as at
the last day of a Relevant Period to Consolidated Pro Forma EBITDA (each as
shown in the relevant compliance certificate).

 

“Trapped Cash” means any cash, cash equivalents or other amounts that would, if
it constituted an applicable mandatory prepayment proceed, be exempt from being
required to be applied in a mandatory prepayment of the Facilities pursuant to
the Senior Facilities Agreement, for reasons of unlawfulness, inability to
upstream to applicable Borrowers and otherwise.

 

“Treasury Transactions” means any derivative transaction entered into in
connection with protection against or benefit from fluctuation in any rate or
price.

 

“Working Capital” means trade and other debtors in relation to operating items
of any member of the Group plus prepayment in relation to operating items,
inventory and stock, less trade and other creditors in relation to operating
items (but not including sums payable in respect of any Borrowings) of any
member of the Group and less accrued expenses and accrued costs of any member of
the Group.

 

Calculation Methodology

 

(a)The financial covenant will be tested by reference to each set of financial
statements delivered to the Agent for the Relevant Period or any part thereof
and/or each Compliance Certificate.

 

(b)The components of each financial definition will be calculated in accordance
with the finance documents and as applicable with the relevant accounting
principles.

 

(c)For a Relevant Period ending less than 12 Months after the Closing Date the
financial covenant ratio (and any other relevant ratio or financial definition
calculated for the purposes of the Senior Facilities Agreement) shall be
calculated using:

 

(i)Consolidated Total Net Debt and Consolidated Senior Secured Net Debt as at
the end of that Relevant Period;

 

 

17To refer to 31 December of the Financial Year during which the Closing Date
occurs.

 

Page 55

 

 

(ii)Consolidated EBIT, Consolidated EBITDA, Consolidated Pro Forma EBITDA and
Consolidated Cash Flow calculated on an actual basis over the Relevant Period;
and

 

(iii)Consolidated Debt Service and Consolidated Total Net Cash Interest Expenses
calculated on a cumulative basis by reference to the amount thereof for the
period from the Closing Date.

 

(d)For the purpose of the financial definitions, the financial covenants and the
calculation of the Total Net Leverage Ratio no item shall be included or
excluded more than once in any calculation.

 

(e)For the purposes of the financial definitions, the financial covenants and
the calculation of the Total Net Leverage Ratio in respect of any Relevant
Period and to the extent the Total Net Leverage Ratio or any financial
definition is used as the basis (in whole or in part) for permitting any
transaction or making any determination under the Senior Facilities Agreement
(including on a pro forma basis), the exchange rates (including for the purposes
of determining any interest rate) and interest rates used for determination of
Consolidated Total Net Debt, Consolidated Senior Secured Net Debt and
Consolidated Total Net Cash Interest Expenses for that Relevant Period shall be
(i) with respect to Financial Indebtedness for which the Group has entered into
interest rate and/or cross currency derivatives, the rate or level at which such
derivative has been entered into and (ii) with respect to all other Financial
Indebtedness, the interest rate and/or exchange rate calculated in accordance
with paragraph (f) below.

 

(f)Subject to paragraph (d) above, for the purposes of the financial
definitions, the financial covenants and the calculation of the Total Net
Leverage Ratio in respect of any Relevant Period, the exchange rates (including
for the purposes of determining any interest rate) used in the calculation of
Consolidated EBIT, Consolidated EBITDA, Consolidated Pro Forma EBITDA and
Consolidated Total Net Cash Interest Expenses shall be the weighted average
exchange rates for the Relevant Period or otherwise consistent with the exchange
rate methodology applied in the financial statements delivered pursuant to the
Senior Facilities Agreement, in each case as selected and determined by the
Company.

 

(g)

 

(i)The financial covenants and financial definitions for all purposes in the
Senior Facilities Agreement (other than to the extent such definitions are used
for the purposes of calculating Consolidated Pro Forma EBITDA and Consolidated
Cash Flow, in each case for the purposes of calculating Excess Cash Flow) shall
be calculated to give pro forma effect to any synergies and cost savings arising
from steps taken or committed to be taken in any Relevant Period (including the
portion thereof occurring prior to the relevant event) in connection with
acquisitions, dispositions or restructurings, reorganisations, synergies or cost
saving or other similar initiatives (such initiatives being “Group Initiatives”)
and taking into account throughout (without double counting any synergies and
cost savings actually achieved) Pro Forma Acquisition Synergies and Cost
Savings, Pro Forma Disposal Synergies and Cost Savings and/or Pro Forma Group
Initiative Synergies and Cost Savings and to give pro forma effect to any
related incurrence, assumption or repayments of Financial Indebtedness.

 

Page 56

 

 

(ii)For the purposes of the calculation of Consolidated Pro Forma EBITDA (other
than to the extent such definitions are used for the purposes of calculating
Excess Cash Flow), the aggregate earnings before interest, tax, depreciation and
amortisation (calculated on the same basis as Consolidated EBITDA but on an
unconsolidated bases (except to the extent that the entity, business or material
fixed asset acquired itself has Subsidiaries) (“EBITDA”) of any entity, business
or material fixed asset that is acquired during a Relevant Period shall be
included for the full Relevant Period (as adjusted by any Pro Forma Acquisition
Synergies and Cost Savings, Pro Forma Disposal Synergies and Cost Savings and/or
Pro Forma Group Initiative Synergies and Cost Savings) and shall exclude any
non-recurring costs and other expenses related to such acquisitions or
investments or Group Initiatives.

 

(iii)For the purposes of calculation of Consolidated Pro Forma EBITDA and (for
the purposes of calculating Excess Cash Flow) Consolidated Cashflow, the EBITDA
and cashflow (calculated on the same basis as Consolidated Cashflow but on an
unconsolidated basis (except to the extent that the entity or business sold
itself has Subsidiaries) (“Cashflow”) of any entity, business or material fixed
asset that is sold (in the case of Consolidated Pro Forma EBITDA) during the
Relevant Period or (in the case of Consolidated Cashflow) at any time shall be
excluded, in the case of EBITDA (as defined in paragraph (ii) above), for the
full Relevant Period and in the case of Cashflow, from the date on which it is
agreed that the Cashflow of the relevant entity, business or material fixed
asset is transferred to or held for the benefit of the buyer (including without
limitation under any lock-box arrangements involving an economic transfer
occurring prior to a legal transfer of the relevant entity, business or assets)
(in the case of Consolidated Pro Forma EBITDA, as adjusted by any Pro Forma
Acquisition Synergies and Cost Savings, Pro Forma Disposal Synergies and Cost
Savings and/or Pro Forma Group Initiative Synergies and Cost Savings) and shall
exclude any non-recurring costs and other expenses related to such sales,
transfers, dispositions or Group Initiatives.

 

(iv)Consolidated Senior Secured Net Debt, Consolidated Total Net Debt and
Consolidated Total Net Cash Interest Expenses shall be adjusted to give pro
forma effect to any incurrence, assumption or repayment of Financial
Indebtedness (including any reduction in Consolidated Senior Secured Net Debt
or, as applicable, Consolidated Total Net Debt from the proceeds of any asset
sales) arising from any acquisitions, investments, dispositions or Group
Initiatives if a related adjustment has been made to Consolidated Pro Forma
EBITDA.

 

(v)To the extent the Total Net Leverage Ratio or any financial definition is
used as the basis (in whole or part) for permitting any transaction or making
any determination under this Agreement (including on a pro-forma basis) at any
time after a Quarter Date, Consolidated Senior Secured Net Debt and Consolidated
Total Net Debt shall be reduced to take into account any repayment of Financial
Indebtedness made on or before the relevant date and shall be increased to take
into account any incurrence or assumption of Financial Indebtedness made on or
before the relevant date.

 

(vi)If the aggregate amount of Pro Forma Acquisition Synergies and Cost Savings,
Pro Forma Disposal Synergies and Cost Savings or Pro Forma Group Initiative
Synergies and Cost Savings taken into account in any applicable calculation are
greater than 15 per cent. of Consolidated Pro Forma EBITDA (after taking into
account such acquisition, disposal or Group Initiative), those Pro Forma
Acquisition Synergies and Cost Savings, Pro Forma Disposal Synergies and Cost
Savings or Pro Forma Group Initiative Synergies and Cost Savings (as the case
may be) shall be commented on as not being unreasonable by any independent
reputable accountancy firm or industry specialist (or such other firm approved
by the Majority Lenders) (which commentary may be provided in any accompanying
accountants’ or industry specialist due diligence report).

 

Page 57

 

 

(vii)The aggregate amount of Pro Forma Acquisition Synergies and Cost Savings,
Pro Forma Disposal Synergies and Cost Savings and Pro Forma Group Initiative
Synergies and Cost Savings taken into account in any Relevant Period shall not
be greater than 20 per cent. of Consolidated Pro Forma EBITDA (after taking into
account such acquisition, disposal or Group Initiative) for that Relevant
Period.

 

(h)Notwithstanding anything to the contrary (including anything in the financial
definitions), when calculating any financial definition or ratio under the
Finance Documents (excluding for the avoidance of doubt, Excess Cash Flow), the
Company shall be permitted to exclude all or any part of any expenditure or
other negative item (and/or the impact thereof) directly or indirectly relating
to or resulting from:

 

(i)the Acquisition;

 

(ii)start-up costs for new businesses and branding or re-branding of existing
businesses; and

 

(iii)Restructuring Costs and/or Acquisition Costs.

 

Page 58

 

 

SCHEDULE 3

 

Conditions Precedent to initial Utilisation

 

1.The Original Obligors

 

(a)In respect of each Original Obligor, a copy of the constitutional documents
(or equivalent).

 

(b)A copy of a resolution of the board of directors or equivalent body of each
Original Obligor:

 

(i)approving the terms of, and the transactions contemplated by, the Transaction
Documents to which it is a party and resolving that it execute the Transaction
Documents to which it is a party;

 

(ii)authorising a specified person or persons to execute the Transaction
Documents to which it is a party on its behalf;

 

(iii)authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices (including, if relevant, any Utilisation
Request) to be signed and/or despatched by it under or in connection with the
Transaction Documents to which it is a party; and

 

(iv)other than in the case of the Company, authorising the Company to act as its
agent in connection with the Finance Documents.

 

(c)A specimen of the signature of each person authorised by the resolution
referred to in (b) above.

 

(d)Other than with respect to the Company, if required under applicable law or
practice or by its constitutional documents, a copy of a resolution signed by
all the holders of all the issued shares of each Original Obligor, approving the
terms of, and the transactions contemplated by, the Transaction Documents to
which each Original Obligor is a party and resolving that it execute the
Transaction Documents to which it is a party.

 

(e)Other than with respect to the Company, if required under applicable law or
practice or by its constitutional documents, a copy of a resolution of the board
of directors of each corporate shareholder of each Original Obligor, approving
the terms of the resolutions referred to in paragraph (d) above.

 

(f)A certificate of each Original Obligor (signed by a director, a manager or an
authorised signatory, as the case may be) confirming that subject to the
guarantee limitations as set out in this Agreement borrowing or guaranteeing or
securing, as appropriate, the Total Commitments would not cause any borrowing,
guarantee, security or similar limit binding on it to be exceeded.

 

(g)A certificate of each Original Obligor (signed by a director, a manager or an
authorised signatory, as the case may be) dated as at the Closing Date and
certifying that each copy document relating to it specified in this Part 1 of
Schedule 3 is correct, complete and (to the extent executed) in full force and
effect and has not been amended or superseded as at a date no earlier than the
Closing Date.

 

(h)Evidence that the Company has cash on balance sheet as required in the
sources & uses.

 

(i)Evidence satisfactory to the Agent that each Lender has carried out and is
satisfied with the results of all “know your client”, anti-money laundering and
other similar checks required by each Lender in relation to each Original
Obligor and, in each case, notified by each Lender to the Company at least 5
Business Days prior to the date of this Agreement.

 

Page 59

 

 

(j)In respect of each member of the Group incorporated in England & Wales whose
shares are the subject of a Transaction Security Document governed by the laws
of England & Wales (a “Charged Company”), either:

 

(i)a certificate of an authorised signatory of the Company certifying that (A)
each member of the Group has complied within the relevant timeframe with any
notice it has received pursuant to Part 21A of the Companies Act 2006 from the
Charged Company; and (B) no “warning notice” or “restrictions notice” (in each
case as defined in Schedule 1B of the Companies Act 2006) has been issued in
respect of those shares, together with a copy of the “PSC register” (within the
meaning of section 790C(10) of the Companies Act 2006) of the Charged Company,
which, in the case of a Charged Company that is a subsidiary of the Company, is
certified by an authorised signatory of the Company to be correct, complete and
not amended or superseded as at a date no earlier that the date of the Senior
Facilities Agreement; or

 

(ii)a certificate of an authorised signatory of the Company certifying that such
Charged Company is not required to comply with Part 21A of the Companies Act
2006.

 

2.Finance Documents

 

A copy of each of the following documents in the agreed form, each duly executed
and delivered by each of the Obligors, in each case to the extent party thereto:

 

(a)the Senior Facilities Agreement;

 

(b)any fee letters and syndication letters;

 

(c)the hedging letter;

 

(d)the Intercreditor Agreement; and

 

(e)a Utilisation Request in relation to any Utilisation to be made on the
Closing Date.

 

3.Transaction Security Documents

 

(a)A copy of each of the following Transaction Security Documents in the agreed
form, each duly executed and delivered by each Obligor, in each case to the
extent party thereto:

 

 

Name of Obligor/Security provider

  Transaction Security Document   Governing law of documents  

Inspired Entertainment Inc

DMWSL 633 Limited

DMWSL 632 Limited

DMWSL 631 Limited

Gaming Acquisitions Limited

Inspired Gaming Group Limited

Inspired Gaming (Holdings) Limited

Inspired Gaming (International) Limited

Inspired Gaming (UK) Limited

Inspired Gaming (Greece) Limited

  English Debenture (in the case of Inspired Entertainment Inc., solely for the
purposes of charging the shares of DMWSL 633 Limited held by it and any bank
accounts maintained by it in England and Wales)   England and Wales            
  Inspired Entertainment Inc.
Inspired Gaming USA Inc.
DMWSL 631 Limited   US Security Agreement   New York law

 

(b)Subject, in each case, to any grace period set out in the relevant
Transaction Security Document and subject to the Agreed Security Principles, a
copy of all notices required to be sent under the relevant Transaction Security
Document as of the Closing Date executed by the relevant Obligor together with
all share certificates and stock transfer forms required to be provided on the
Closing Date under the Transaction Security Documents.

 

4.Legal Opinions

 

(a)An enforceability and capacity legal opinion of White & Case LLP, legal
advisers to the Agent and the Arrangers as to English law, addressed to the
Agent, the Security Agent and the Original Lenders and capable of being relied
upon by any persons who become Lenders pursuant to the primary syndication of
the Facilities, substantially in the form distributed to the Agent prior to
signing this Agreement.

 

(b)A legal opinion of Sidley Austin LLP, legal advisers to the Company with
respect to capacity and validity in connection with the Original Obligors
organized under the laws of the state of Delaware and the enforceability of the
Finance Documents governed by the laws of the state of New York executed by such
Original Obligors, addressed to the Agent, the Security Agent and the Original
Lenders (as defined therein) and capable of being relied upon by any persons who
become Lenders pursuant to the primary syndication of the Facilities,
substantially in the form distributed to the Agent prior to signing this
Agreement..

 

Page 60

 

 

5.Reports

 

(a)A copy of the draft or final form approved by the Arrangers on or prior to
the date of the Senior Facilities Agreement of the following reports (the
“Reports”), provided that this condition precedent shall be satisfied if the
final form of each Report is not different in any manner which is materially
adverse to the interests of the Lenders (taken as whole) compared to the draft
of that Report received by the Arrangers on or prior to the date of the Senior
Facilities Agreement, except for any changes or additions approved by the
Arrangers (acting reasonably):

 

(i)a tax structure memorandum prepared by PricewaterhouseCoopers LLP;

 

(ii)the buyside red flag financial and tax due diligence report prepared by KPMG
LLP;

 

(iii)synergies review report prepared by KPMG LLP;

 

(iv)Q1-19 due diligence report prepared by KPMG; and

 

(v)trading update to fourth Quarter 2018 prepared by KPMG LLP.

 

(b)Reliance letters in respect of the Reports whose providers have not adopted a
general policy of not providing reliance in favour of Finance Parties and only
to the extent that the Arrangers agree the terms of such reliance letters with
the relevatn Report providers prior to entering into the Senior Facilities
Agreement.

 

6.Financial Information

 

(a)The Original Financial Statements.

 

(b)The Base Case Model in the form agreed with the Mandated Lead Arrangers,
provided that this condition precedent shall be satisfied if the final form of
the Base Case Model is not different in any manner which is materially adverse
to the interests of the Lenders compared to the form of the Base Case Model
agreed with the Mandated Lead Arrangers on or prior to the date of this
Agreement, except for any changes or additions approved by the Mandated Lead
Arrangers.

 

7.Acquisition Documents

 

(a)Copies of the executed Acquisition Documents in the form approved by the
Mandated Lead Arrangers on or prior to the date of the Senior Facilities
Agreement (save for any amendments or waivers which are not materially adverse
to the interests of the Finance Parties (taken as a whole) and any other changes
or additions approved by the Lenders (acting reasonably)).

 

(b)A certificate of the Company (signed by a director or an authorised
signatory) dated the Closing Date certifying and confirming that:

 

(i)other than payment of the purchase price under the Acquisition Agreement,
which will be satisfied immediately following utilisation of Facility B, the
Acquisition Documents are unconditional in all respects and that no terms and
conditions of the Acquisition Documents have been amended, waived or terminated
without the consent of the Arrangers (acting reasonably) other than an
amendment, waiver or consent which is not materially adverse to the interests of
the Finance Parties; and

 

(ii)so far as it is aware there has been no material breach of warranty or
otherwise under the Acquisition Documents which would entitle the Company to
rescind the Acquisition Documents and which would be materially adverse to the
interests of the Finance Parties.

 

Page 61

 

 

8.Other Documents and Evidence

 

(a)Evidence that Existing Facilities will be fully discharged on the Closing
Date.

 

(b)The Group Structure Chart.

 

(c)Evidence that all existing Security with respect to the Existing Facilities
will be released on the Closing Date, subject to any local law formalities which
cannot be completed on or prior to the Closing Date but shall be completed as
soon as reasonably practicable thereafter.

 

(d)Evidence that all existing Security which is not Permitted Security will be
released on the Closing Date, subject to any local law formalities which cannot
be completed on or prior to the Closing Date but shall be completed as soon as
reasonably practicable thereafter.

 

(e)Evidence that all existing Financial Indebtedness (including the Existing
Debt) of the Target Group which is not Permitted Financial Indebtedness will be
refinanced or discharged on the Closing Date.

 

(f)Evidence that any process agent appointed in respect of a Finance Document
has accepted its appointment.

 

(g)Confirmation that the fees, costs and expenses then due and payable under the
Senior Facilities Agreement and any Fee Letter have been paid or will be paid on
or by the first Utilisation Date (which such fees shall be deducted from first
Utilisation in accordance with the Utilisation Request delivered in accordance
with paragraph 2 above).

 

(h)A copy of the Funds Flow Statement, provided that this condition precedent
shall be satisfied if the final form of the Funds Flow Statement is not
different in any manner which is materially adverse to the interests of the
Lenders (taken as a whole) compared to the most recent draft of the Funds Flow
Statement that was signed-off by the Arrangers, except for any changes or
additions approved by the Arrangers.

 

(i)Copies of any structural inter-company loans resulting from the on-lending of
Facility B proceeds by Gaming Acquisitions Limited to Inspired Gaming (UK)
Limited.

 

(j)The Approved List.

 

Page 62

 

 

SCHEDULE 4

 

ICA Principles

 

Ranking:

1.    Senior Facilities, Agent Liabilities and Hedging Liabilities to rank pari
passu between themselves; in priority to

 

2.     Second Lien Liabilities; in priority to

 

3.     Subordinated Secured Liabilities; in priority to

 

4.     Subordinated Unsecured Liabilities; in priority to

 

5.    intra-group liabilities of a member of the Group (without preference
between them) and, in each case, subject to the application of enforcement
proceeds.

  

No Hedging Cap:

There shall be no cap with respect to:

 

(a)   any interest rate and foreign exchange hedging entered into with respect
to the Senior Facilities; and

  

(b)   all other hedging entered into in the ordinary course of trade and not for
speculative reasons,

  

which shall, in the case of hedge providers which accede to the ICA in that
capacity, be permitted to rank pari passu with, and share in the Transaction
Security on the same basis as, the Senior Facilities.

 

Application of Proceeds:

All amounts received by the Security Agent from enforcement of the Transaction
Security will be applied in the following order: (a) first, sums owing to the
Security Agent, any Receiver or Delegate; (b) second, security enforcement costs
and expenses incurred Senior Lenders and hedge counterparties in connection with
the Senior Facilities and the Hedging Liabilities respectively; (c) third, the
Senior Facilities and Hedging Liabilities, pro rata; (d) fourth, to any person
to whom payment is required to be made by law; and (e) fifth, debtors.

 

Majority Senior Creditors: 662/3% of the Senior Facilities and Hedging
Liabilities.     Investor Liabilities: No shareholder of Inspired Entertainment
Inc. shall be party to the Intercreditor Agreement in any capacity.    
Intra-Group Liabilities:

Intra-Group Liabilities to be fully subordinated to the Senior Facilities in all
respects. Prior to a Declared Default, members of the Group may make payments
with respect to Intra-Group Liabilities from time to time when due. Following
the occurrence of a Declared Default, such payments may only be made to the
extent made to facilitate payment of the Senior Facilities or with the consent
of the Majority Senior Creditors.

 

Members of the Group which are intra-Group creditors (above a threshold to be
agreed) shall be required to accede to the Intercreditor Agreement as an
intra-group lender.

 

Page 63

 

 

Incremental/ Side Car Debt:

The Intercreditor Agreement shall be pre-wired with respect to the incurrence of
any pari passu or junior secured or unsecured incremental and side car debt
permitted to be incurred under the terms of the Senior Facilities Agreement (the
“Additional Debt”) such that the Additional Debt can be incurred, and the
relevant creditors (the “Additional Debt Creditors”) accede to the Intercreditor
Agreement and share in the Transaction Security in accordance with their
ranking, without the need to effect any amendments with respect to the
Intercreditor Agreement.

  

No consent, sanction, authority or further confirmation from any creditor or
other secured party or finance party shall be required with respect to the
establishment of the Additional Debt or the accession of the Additional Debt
Creditors to the Intercreditor Agreement.

  

Each creditor and other secured party or finance party, by signing the
Intercreditor Agreement, shall expressly pre-authorise the Agent and the
Security Agent to do all such things or acts and execute all documents as may be
necessary or desirable in connection with the establishment of any Additional
Debt and the accession to the Intercreditor Agreement of the Additional Debt
Creditors, including without limitation in order to:

 

(a)   maintain the effectiveness of the Transaction Security, guarantees,
indemnities and other assurance against loss provided to the Senior Creditors;
and

 

(b)   provide the Additional Debt Creditors with the benefit of security,
guarantees, indemnities and other assurance against loss that corresponds to
their ranking.

 

Non-Distressed Disposals:

If a disposal of an asset is a Non-Distressed Disposal, the Security Agent shall
be authorised (without any consent, sanction, authority or further confirmation
from any creditor or other secured party or finance party):

 

(a)    to release the Transaction Security and any other claim over that asset;

  

(b)   where that asset consists of shares in the capital of a member of the
Group or a third party chargor, to release the Transaction Security and any
other claim over that member of the Group or third party chargor or its assets
and (if any) the subsidiaries of that member of the Group or third party chargor
and their respective assets; and

  

(c)   to execute and deliver or enter into any release of the Transaction
Security or any claim described in paragraphs (a) and (b) above and issue any
certificates of non-crystallisation of any floating charge or any consent to
dealing that may be reasonably requested by the Company.

  

“Non Distressed Disposal” shall be defined to mean (i) a disposal of an asset by
a member of the Group18; (ii) a disposal of an asset which is subject to the
Transaction Security19; or (iii) any merger, reorganisation or transaction that
is, in each case, not prohibited under the Senior Facilities Agreement20.

 

Snooze You Loose: Ten (10) Business Days

  

 

 

 

18Ability to release for intragroup transactions TBD.

19Ability to release for intragroup transactions TBD.

20Ability to release for intragroup transactions TBD.

 

Page 64

 

 

SCHEDULE 5

 

Baskets, Events of Default and Certain Other Items21

 

#   Item   Agreed Position     Debt Incurrence     1.   Finance Leases (to
include Sale and Leasebacks)   Greater of £10,000,000 and 16% of Consolidated
Pro Forma EBITDA at any time.           2.  

General debt basket (to include Receivables Financing / Factoring)

 

  Greater of £10,000,000 and 16% of Consolidated Pro Forma EBITDA at any time.  
  Permitted Payments         Management equity plans & repurchase of related
shares  

Deferred compensation indebtedness to employees, directors or consultants not
exceeding the greater of £2,000,000 and 3.2 per cent of Consolidated Pro Forma
EBITDA per Financial Year and the greater of £3,000,000 and 4.7 per cent of
Consolidated Pro Forma EBITDA at any time.

 

   

Repurchase of Subordinated Debt / other payments to shareholders which can be
used for subordinated debt

 

 

To be payable in line with ratio baskets for payment of dividends as set out in
paragraph (b) of Section 5.36 under the heading “Certain Permitteds” in Part 5
(Other Terms) of this Term Sheet.

 

No grower.

 

    Permitted Investments         Loans to management and employees  

Greater of £1,000,000 and 1.6% of Consolidated Pro Forma EBITDA at any time.

  

    Deferred consideration with respect to Permitted Disposals  

25% of the total consideration received in respect of the relevant disposal
(general loans basket may be used in addition).

 

No grower.

 

    General Baskets        

●        Loans

●        Guarantees

●        Security

  Greater of £10,000,000 and 16% of Consolidated Pro Forma at any time for each
item specified.              

Cross Default / Judgment Default / Compulsory acquisitions Events of Default de
minimis amounts

 

        Default de minimis amounts  

£10,000,000 for each of the Events of Default specified.

 

No grower.

 

    Other / Technical Thresholds         Minimum  Facility B and Revolving
Facility transfer amounts  

£1,000,000.

 

No grower.

 

    Revolving Facility minimum amount for utilisation  

£200,000.

 

No grower.

 

 

 

 

21Unless expressly otherwise indicated, all baskets, thresholds and other
numerical amounts included in this table shall be expressed as grower baskets in
the Senior Facilities Agreement.

 

 

Page 65