exv10w5



 






Exhibit 10.5




	 	 	 	 	 
	

	 	DATED January 28, 2005	 	 
	 
	 	 	 	 
	

	 	OILGEAR TOWLER LIMITED AS (1)	 	 
	

	 	BORROWER	 	 
	 
	 	 	 	 
	

	 	and	 	 
	 
	 	 	 	 
	

	 	VENTURE FINANCE PLC AS LENDER (2)	 	 
	 
	 	 	 	 
	

	 	 	 	 
	 	 	 	 	 
	

	 	STOCK LOAN AGREEMENT	 	 
	 
	 	 	 	 
	

	 	 	 	 






 

	 	 	 
	Hammond Suddards Edge

	 	 
	7
Devonshire Square Cutlers Gardens London EC2M 4YH DX 136546
Bishopsgate 2 
	 	 
	Telephone
+44 (0)20 7655 1000 Fax +44 (0)20 7655 1001

	 	www.hammondsuddardsedge.com
	 
	 	 
	Reference
/AJW2

	 	 
	HSE/MAR-JUN02

	 	 












 






CONTENTS




	 	 	 	 	 	 	 
	1

	 	CONSTRUCTION
	 	 	2	 
	 

	 	 
	 	 	 	 
	2

	 	THE FACILITY
	 	 	4	 
	 

	 	 
	 	 	 	 
	3

	 	TERM AND DRAWDOWN
	 	 	5	 
	 

	 	 
	 	 	 	 
	4

	 	CONDITIONS PRECEDENT
	 	 	5	 
	 

	 	 
	 	 	 	 
	5

	 	INTEREST AND FEES
	 	 	6	 
	 

	 	 
	 	 	 	 
	6

	 	REPAYMENT
	 	 	6	 
	 

	 	 
	 	 	 	 
	7

	 	DEFAULT INTEREST
	 	 	6	 
	 

	 	 
	 	 	 	 
	8

	 	PAYMENTS
	 	 	7	 
	 

	 	 
	 	 	 	 
	9

	 	CHANGES IN CIRCUMSTANCES AND INCREASED COSTS
	 	 	7	 
	 

	 	 
	 	 	 	 
	10

	 	REPRESENTATIONS AND WARRANTIES
	 	 	7	 
	 

	 	 
	 	 	 	 
	11

	 	FINANCIAL INFORMATION
	 	 	8	 
	 

	 	 
	 	 	 	 
	12

	 	GENERAL COVENANTS
	 	 	8	 
	 

	 	 
	 	 	 	 
	13

	 	EVENTS OF DEFAULT
	 	 	9	 
	 

	 	 
	 	 	 	 
	14

	 	ASSIGNMENT AND TRANSFER
	 	 	10	 
	 

	 	 
	 	 	 	 
	15

	 	NOTICES
	 	 	10	 
	 

	 	 
	 	 	 	 
	16

	 	WAIVERS
	 	 	10	 
	 

	 	 
	 	 	 	 
	17

	 	INDEMNITY FOR EXPENSES
	 	 	11	 
	 

	 	 
	 	 	 	 
	18

	 	ILLEGALITY
	 	 	11	 
	 

	 	 
	 	 	 	 
	19

	 	SET-OFF
	 	 	11	 
	 

	 	 
	 	 	 	 
	20

	 	DEMANDS AND NOTIFICATION BINDING	 	 	12	 
	 

	 	 
	 	 	 	 
	21

	 	GENERAL
	 	 	12	 
	 

	 	 
	 	 	 	 
	22

	 	GOVERNING LAW


	 	 	12	 
	SCHEDULE PART 1	 	 	1	 
	 
SCHEDULE PART 2 - SECURITY DOCUMENT	 	 	3	 






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	DATE OF STOCK LOAN AGREEMENT
	 	2005






PARTIES





	(1)  	OILGEAR TOWLER LIMITED (Company Number 00565938) whose registered
office is Electraulic Works, Oaklands Road, Rodley, Leeds, West Yorkshire, LS13
1LG (the “Borrower”)
	 
	(2)  	VENTURE FINANCE PLC AS LENDER (Company Number 2281768) whose
registered office is at Sussex House, Perrymount Road, Haywards Heath, West
Sussex, RH16 1DN(“VF”)





WHEREAS




(A) VF and the Borrower are parties to an agreement for the purchase of debts (“the
Agreement for the Purchase of Debts”) which will commence on the Commencement
Date (as defined therein), and



(B) VF has agreed to make available to the Borrower a loan facility upon the terms and
subject to the conditions set out in this Agreement.



IT IS AGREED as follows:-




	1  	CONSTRUCTION
	 
	1.1  	Definitions





In this Agreement, unless the context otherwise requires, the following words and
expressions will have the meaning set out opposite them:-



“Administration Charge” means the charge referred to in clause 5.4;



“Agreement” means this agreement and the Schedule;



“Aggregate Limit” means the amount specified in (or, if appropriate, calculated in
accordance with) paragraph 2 of Part 1 of the Schedule, or such other greater or lesser
amount as VF may notify to the Borrower from time to time, in each case in VF’s absolute
discretion;



“Availability Period” means the period detailed in paragraph 10 of Part 1 of the Schedule;



“Base Rate” means the Base Rate set by Venture’s Bankers.



“Collateral Reporting and Monitoring Requirements” means the reporting and monitoring
requirements of VF in relation to the Eligible Collateral from time to time including
monitoring by way of physical access to premises and access to such Eligible Collateral by
VF or any of its employees servants or agents and shall for the time being be those
detailed in the Schedule;



“Default Rate” means the rate which is 4.5 per cent per annum above the Base Rate;



“Drawdown Period” means the period of three calendar months following the date upon which
the Borrower satisfies the requirements of clause 4;





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“Eligible Collateral” means such of the Borrower’s undertaking property and assets as VF may from
time to time notify to the Borrower as forming part of the Borrower’s Eligible Collateral which
shall until further notice be such of the undertaking, property and assets of the Borrower as
shall be assessed in accordance with the Eligible Collateral Formula;



“Eligible Collateral Formula” means the formula referred to in paragraph 7 of Part 1 of the
Schedule as the same may be varied from time to time (in VF’s absolute discretion) by notice in
writing to the Borrower;



“Event of Default” means any of the events specified in Clause 13;



“Facility” means the loan facility to be made available by VF to the Borrower pursuant to this
Agreement and as more particularly specified in clause 2;



“Facility Fee” means the fee referred to in clause 5.3;



“Finished Goods” means goods manufactured by the Borrower which are fit for sale to third parties;



“Interest Rate” means the rate specified in paragraph 5 of Part 1 of the Schedule charged on the
Loan Account Balance outstanding from day to day, which interest shall be debited to the Loan
Account upon the last Working Day of each calendar month



“Loan” means the principal sum drawn under the Facility pursuant to Clause 3 from time to time or,
as the context requires, the principal amount of such a sum from time to time outstanding under
this Agreement;



“Loan Account” means a loan account or accounts in the name of the Borrower with VF opened in
connection with the Facility;



“Loan Account Balance” means the debit balance of the Loan Account from time to time;



“Maximum Loan Amount” means the maximum principal amount which may be drawn as a Loan hereunder as
detailed in paragraph 1 of Part 1 of the Schedule;



“Security Document” means the document listed in Part 2 of the Schedule and any other documents
for the time being securing (directly or indirectly) all or any of the Borrower’s obligations
under this Agreement and/or all or any other obligations (present or future, actual or contingent)
of the Borrower to VF and references to any such documents shall include the same as varied or
amended in writing by the parties thereto from time to time;



“Schedule” means the schedule to this Agreement consisting of Parts 1 and 2;



“Unencumbered” means not subject to any mortgage, charge, assignment for the purpose of security,
pledge, lien, right of set-off, arrangements for retention of title (other than in favour of the
Borrower), or trust arrangement for the purpose of, or which has the effect of granting security
or any other interest in the nature of security of any kind whatsoever or any agreement, whether
expressed to be conditional or otherwise, to create any of the same;



“Venture’s Bankers” HSBC Bank Plc or such other bank as Venture may from time to time, at its sole
discretion, appoint as its bankers.



“Working Day” means a day upon which VF and clearing Banks in London generally are open for
business of the nature required for the purposes of this Agreement.





3









 









	1.2  	Interpretation






	 	(a)  	Any reference in this Agreement to:-






	 	(i)  	clause, sub-clause or Schedule shall (except where the
context otherwise requires) be construed as a reference to the relevant
clause or sub-clause in or Schedule to (and forming a part of) this
Agreement;
	 
	 	(ii)  	a person shall include a body corporate, individual, firm
or an unincorporated body of persons (as the case may be);
	 
	 	(iii)  	the singular shall include the plural and vice-versa;
	 
	 	(iv)  	any statutory provision shall be deemed to mean and to
include a reference to any modification, consolidation or re-enactment
thereof for the time being in force;
	 
	 	(v)  	“Borrower” and “VF” shall, where the context admits,
include their respective personal representatives, successors in title or
assignees (whether immediate or derivative).
	 
	 	(vi)  	Any reference herein to any document, including to this
Agreement includes such document as amended, novated, supplemented,
substituted, extended, assigned or replaced from time to time and includes
any document which is supplemental hereto or thereto.
	 
	 	(vii)  	The meaning of general words introduced by the word
“other” and the word “otherwise” shall not be limited by reference to any
preceding words or enumeration including a particular class of acts, matters
or things.






	 	(b)  	The headings in this Agreement are inserted for convenience only and
shall not affect its construction or interpretation.
	 
	 	(c)  	Any right or power which may be exercised or any determination which
may be made hereunder by VF may be exercised or made in the absolute
and unfettered discretion of VF who shall not be under any obligation to
give reasons therefor.
	 
	 	(d)  	Unless the context otherwise requires, expressions defined in the
Agreement for the Purchase of Debts shall bear the same meaning
herein.






	2  	THE FACILITY
	 
	2.1  	The Facility shall consist of a loan drawn pursuant to the terms of this Agreement
of a maximum principal amount not exceeding the Maximum Loan Amount.
	 
	2.2  	Unless VF otherwise agrees in writing with the Borrower, the Facility will be used
by the Borrower to fund its working capital requirements. VF shall not be bound to
enquire as to, nor shall it be responsible for, the use or application by the
Borrower of all or any part of the Facility.




4









 






	3  	TERM AND DRAWDOWN
	 
	3.1  	Subject to Clause 4 and to the first drawing hereunder taking place prior to the
expiry of the Drawdown Period, the Facility shall be available for drawing by the
Borrower at any time within the Availability Period. VF shall not, other than in its
absolute discretion, permit drawings to be made under this Agreement more
frequently than the Drawing Frequency detailed in paragraph 8 of Part 1 of the
Schedule.
	 
	3.2  	VF shall not be obliged to permit any drawing hereunder (other than in its
absolute discretion) if following VF’s own assessment of the Borrower’s Eligible
Collateral in accordance with the Eligible Collateral Formula the drawing would
cause the Loan Account Balance to exceed the sum produced by applying such
formula to the Borrower’s Eligible Collateral. If as a consequence of such
assessment the Loan Account Balance is found to be in excess of the sum so
produced, the Borrower shall forthwith upon VF’s demand repay to VF such
amount as shall be required to extinguish such excess.
	 
	3.3  	VF shall not be obliged to permit any drawing hereunder or make any payment to
the Borrower pursuant to the Agreement for the Purchase of Debts (other than in
its absolute discretion) if following VF’s own assessment of the Borrower’s
Eligible Collateral in accordance with the Eligible Collateral Formula, and after a
notional or actual combination of all accounts of the Borrower with VF (including
all actual and/or contingent liabilities of the Borrower to VF at the relevant time)
(“the Account Balance”) the drawing or payment of such amount would cause the
Account Balance to exceed the Aggregate Limit. If as a consequence of such
assessment and/or combination it is found that the Account Balance is at that
time in excess of the Aggregate Limit the Borrower shall forthwith upon VF’s
demand repay to VF such amount as shall be required to extinguish such excess.
	 
	3.4  	VF shall be entitled from time to time and at any time to combine all and any
accounts maintained in the name of the Borrower in the books of VF, such
combination being deemed to have taken place on the happening of any Event of
Default. The Borrower will upon demand in writing from VF pay such amount as
may be required to bring the account of the Borrower within the monetary limits
stated in this Agreement.
	 
	4  	CONDITIONS PRECEDENT





The Facility will only be available for drawing under Clause 3 if:-





	 	(a)  	the Agreement for the Purchase of Debts has commenced and all
conditions precedent to the making of prepayments thereunder by VF
have been satisfied; and
	 
	 	(b)  	the Security Document duly executed by the Borrower has been received
by VF together with copy Board Minutes authorising the entry into and
execution of the same; and
	 
	 	(c)  	there is no Event of Default and no event has occurred which, with the
lapse of time or giving of notice or both, might constitute an Event of
Default; and




5









 






	 	(d)  	the representations and warranties set out in Clause 10 are true and
accurate in all material respects; and
	 
	 	(e)  	the Borrower has notified VF in writing of the amount requested to be
drawn by the Borrower and full details of the account of the Borrower to
which the funds are to be remitted. The Borrower acknowledges that any
notice given in accordance with this clause 4(e) shall be irrevocable and,
unless VF otherwise agrees, shall oblige the Borrower to borrow the
amount specified.






	5  	INTEREST AND FEES
	 
	5.1  	Interest will be charged on the Loan Account Balance at the Interest Rate and
shall accrue from day to day and shall be computed on the basis of a 365 day
year and the number of days elapsed.
	 
	5.2  	The interest accrued on the Loan Account Balance from and including the date
upon which the facility is drawn shall be debited to the Loan Account monthly.
The Borrower and VF hereby agree that for administrative convenience all
interest payable in respect of the Loan Account balance and all other sums
payable by the Borrower pursuant to this Agreement may be debited by VF to the
Current Account of the Borrower maintained by VF pursuant to the Agreement for
the Purchase of Debts. VF reserves the right to require actual payment of all
interest by cheque drawn by the Client or such other form of remittance as VF
may from time to time specify.
	 
	5.3  	The Borrower shall pay to VF the Facility Fee in the amount and at the frequency
stated in paragraph 3 of Part 1 of the Schedule.
	 
	5.4  	The Borrower shall pay to VF the Administration Charge in the amount and at the
frequency specified in paragraph 4 of Part 1 of the Schedule.
	 
	6  	REPAYMENT





The principal amount of the Facility drawn by the Borrower shall (if not repayable at an earlier
date pursuant to the terms of this Agreement) be repaid in accordance with the Repayment Terms set
out in paragraph 9 of Part 1 of the Schedule. Notwithstanding any other term of this Agreement the
Borrower may at any time repay the whole or any part of the Loan Account Balance from time to
time.




	7  	DEFAULT INTEREST
	 
	7.1  	If the Borrower shall fail to pay any amount due under this Agreement on its due date, the
Borrower shall be liable (if VF so requires) for interest on such amount from the date of
such default until the date of actual payment (as well as after as before judgement or
demand) at the Default Rate. The Borrower’s liability under this Clause shall be in
substitution for the liability for interest on such defaulted amount at the Interest Rate.
Such interest shall be payable on demand and, to the extent not actually paid, shall be
compounded monthly in arrears (and debited to the Loan Account or the Current Account as
referred to in clause 5.2 above) and shall be payable before as well as after any judgement.




6









 






	7.2  	VF and the Borrower agree that the Default Rate represents a genuine pre-estimate of VF’s
additional administrative and funding costs in the event of the Borrower’s failure to pay any
sum due to VF and is not a penalty.
	 
	8  	PAYMENTS
	 
	8.1  	The Borrower will make all payments due under this Agreement without set-off,
counterclaim or deduction whatsoever and howsoever arising.
	 
	8.2  	If the Borrower is compelled by law to make any such deduction or withholding,
the Borrower shall forthwith pay to VF such additional amount as shall be
required to ensure that VF shall receive in aggregate the amount it would have
received but for such deduction or withholding.
	 
	9  	CHANGES IN CIRCUMSTANCES AND INCREASED COSTS
	 
	9.1  	If at any time it becomes unlawful or impossible for VF to maintain or fund the
whole or any part of the Loan Account Balance VF may at any time by written
notice to the Borrower require the Borrower to repay the Loan Account Balance
immediately, together with any outstanding interest and all other sums due to VF
under this Agreement, the Agreement for the Purchase of Debts and the Security
Document.
	 
	9.2  	The Borrower shall pay to VF on demand such amount as VF may from time to
time certify as being necessary to compensate it for any increase in the cost of
funding the Loan Account Balance or for any reduction in the rate of return under
this Agreement, incurred by VF as a result of compliance with any official
directives, requirements or requests of any regulatory authority (whether or not
having the force of law) or any law or regulation (including, without limitation,
those relating to reserve assets, special deposits, taxes, capital adequacy and/or
asset ratios).
	 
	10  	REPRESENTATIONS AND WARRANTIES





The Borrower hereby represents and warrants that:-





	10.1  	it has the power to enter into and perform its obligations under this Agreement
and the Security Document and to borrow hereunder and has taken all necessary
action (corporate or otherwise) to authorise the unconditional entry into and
performance of its obligations under this Agreement and the Security Document
and the utilisation of the Facility upon the terms and conditions contained herein
and unconditionally to authorise the execution, delivery and performance of this
Agreement and the Security Document in accordance with their respective terms;
	 
	10.2  	all authorisations, approvals, consents, licences, exemptions, filings, registrations
and other procedures required in connection with the entry into, performance and
validity of this Agreement, the utilisation of the Facility and the execution of the
Security Document have been obtained and are in full force and effect;
	 
	10.3  	this Agreement and the Security Document constitute legal, valid, binding and
enforceable obligations of the Borrower;
	 
	10.4  	the entry into and performance of this Agreement and the Security Document and
the transactions contemplated hereby and thereby do not and will not conflict with




7









 






	  	(i) any law or regulation or any official or judicial order, or (ii) the Memorandum or
Articles of Association of the Borrower; or (iii) any agreement or document to which the
Borrower is a party or which is binding upon the Borrower or its assets;
	 
	10.5  	the financial and other business information and documentation furnished by the
Borrower to VF pursuant to this Agreement;






	 	(a)  	is and was (or shall be) when delivered true and accurate and does not
contain any misstatement or omit any material fact and
	 
	 	(b)  	there has been no material adverse change in the Borrower’s business,
assets, conditions and operation since the delivery of such information to
VF;






	10.6  	save as notified in writing to VF prior to the date of this Agreement all of the
Borrower’s assets are Unencumbered save for the security granted or to be
granted pursuant to the Security Document;
	 
	10.7  	save as disclosed to VF in writing prior to the date of this Agreement, no litigation,
arbitration or administrative proceeding or claim exists which might reasonably be
expected to have by itself or together with any other such proceedings or claims
either:






	 	(a)  	a material adverse effect on the business, assets or condition of the
Borrower; or
	 
	 	(b)  	a material adverse effect on the ability of the Borrower to observe or
perform its obligations under this Agreement or the Security Document is
current or pending or, to the best of the knowledge of the Borrower,
threatened against it.





The representations and warranties set out in this Clause 10 shall be deemed to be repeated on
each day that any amount is or may be outstanding hereunder with reference to the facts and
circumstances then subsisting as if made at each such time.




	11  	FINANCIAL INFORMATION





VF reserves the right during the term of the Facility to require the Borrower to provide VF with
such financial information about the Borrower as VF may from time to time reasonably require.




	12  	GENERAL COVENANTS





During the time of the Facility the Borrower shall:-




	12.1  	not without VF’s prior written consent:-






	 	(a)  	create or permit to subsist any mortgage, charge or other Encumbrance
over any of its assets (except pursuant to the Security Document); or
	 
	 	(b)  	make any loans or otherwise make credit (other than normal trade credit)
available to any person; or




8









 






	 	(c)  	by one or a series of transactions, whether related or not, sell or otherwise
dispose of all or any material part of its property or assets (except in the
normal course of its business).






	12.2  	throughout the duration of this Agreement comply at all times with all provisions
contained within the Agreement for the Purchase of Debts and the Security
Document, and shall provide to VF all such information and physical access to
premises owned or under the control of the Borrower as VF may reasonably
require and the Borrower hereby grants an irrevocable licence to VF for VF (and
any of its employees servants or agents) to enter upon any premises owned or
under the control or authority of the Borrower at any time during normal business
hours for the purposes of this Agreement, for confirming and ensuring the
compliance by the Borrower with the terms hereof, and for the purposes of VF’s
assessment and monitoring from time to time as it may require of the location
state nature and value of any Eligible Collateral at that time;
	 
	12.3  	comply with all the Collateral Reporting and Monitoring Requirements of VF as
detailed in paragraph 6 of Part 1 of the Schedule or as VF may require and may
notify to the Borrower from time to time;
	 
	12.4  	pay all sums due to VF hereunder or otherwise on the due date for payment
thereof;
	 
	12.5  	promptly notify VF if any Event of Default arises under Clause 13 and of anything
which might with the passage of time give rise to an Event of Default.
	 
	13  	EVENTS OF DEFAULT
	 
	13.1  	In the event that:-






	 	(a)  	the Borrower fails to pay on the due date any amount due under this
Agreement or any other agreement between the Borrower and VF; or
	 
	 	(b)  	the Borrower fails to perform any other of its respective obligations under
this Agreement or any other agreement between VF and the Borrower; or
	 
	 	(c)  	any representation, warranty or statement made under or in connection
with this Agreement and/or the Agreement for the Purchase of Debts
and/or the Security Document is or proves to be untrue in any material
respect on the date as of which it was made or deemed to be made or
repeated; or
	 
	 	(d)  	the Agreement for the Purchase of Debts is terminated (or is subject to
notice of termination served by the Borrower on VF) or any event occurs
entitling VF to terminate the Agreement for the Purchase of Debts
(whether or not such right is exercised); or
	 
	 	(e)  	it becomes impossible or unlawful:-






	 	(i)  	for the Borrower to perform any of its respective
obligations contained in this Agreement or the Security Document or any of
them; or




9









 






	 	(ii)  	for VF to exercise any of its rights under this Agreement and/or
the Agreement for the Purchase of Debts and/or the Security Document; or






	 	(f)  	this Agreement and/or the Security Document do not come into or cease
to be in full force and effect or is/are not for any reason valid and binding
upon and enforceable in all respects against the Borrower or VF is of the
reasonable opinion that any security conferred thereby is or may be in
jeopardy; or
	 
	 	(g)  	VF is of the opinion that there has been a material adverse change in the
Borrower’s trading or financial position or condition; or
	 
	 	(h)  	anything is done or permitted or omitted to be done by the Borrower which
VF believes may materially impair the security created by the Security Document
and/or prejudice or detract from the Borrower’s ability to perform the obligations
contained in this Agreement and the Security Document or any of them; or
	 
	 	(i)  	VF is not furnished with all information required to be delivered to it at
the time required,





then, in any such event VF may by notice in writing terminate the Facility and declare the Loan
Account Balance and any other amounts due hereunder immediately due and payable, whereupon the
Borrower will immediately comply with such demand by repaying the Loan Account Balance together
with all outstanding interest and any other amounts due under this Agreement.




	14  	ASSIGNMENT AND TRANSFER
	 
	14.1  	The Borrower may not transfer or assign any of its rights under this Agreement
and/or the Security Document.
	 
	14.2  	VF may, without notice and at any time, transfer or assign all or any part of this
Agreement and/or the Facility and/or the Security Document and the Borrower
hereby irrevocably consents to any such transfer or assignment (and the
disclosure by VF to a transferee or assignee of any information about the
Borrower and the Facility as VF may consider appropriate).
	 
	15  	NOTICES





Any notice from one party to another hereunder shall be sent to the addressee and be deemed
delivered in accordance with the terms of the Agreement for the Purchase of Debts.




	16  	WAIVERS





No failure or delay by VF in exercising any right, power or privilege under this Agreement and/or
the Security Document or any of them shall operate as a waiver thereof nor will any single or
partial exercise of any right, power or privilege preclude any further exercise thereof or
prejudice any other or further exercise by VF of any of its rights or remedies under this
Agreement and/or the Security Document. Such rights and remedies are cumulative and not exclusive
of any right or remedy provided by law.





10









 









	17  	INDEMNITY FOR EXPENSES
	 
	17.1  	The Borrower shall pay to VF on demand on a full indemnity basis whether or not
there is a drawing under the Facility:-






	 	(a)  	all funding breakage costs and/or costs in relation to arrangements
incurred by VF in connection with the funding of the Loan Account
Balance;
	 
	 	(b)  	any stamp documentary registration and other similar duties or taxes in
connection with this Agreement and/or the Security Document;
	 
	 	(c)  	all costs and expenses incurred in connection with the negotiation or
enforcement of this Agreement and/or the Security Document (including
legal fees, charges, disbursements, survey and valuation fees, and value
added tax), and
	 
	 	(d)  	the Facility Fee due upon delivery of this Agreement to VF,






	   	and if the Borrower shall fail to pay when due any of the above amounts VF is entitled to
debit such amounts either to the Loan Account or any other account(s) of the Borrower with
VF.
	 
	17.2  	The Borrower shall also indemnify VF against any loss or expense incurred by it
(including all additional out of pocket expenses (of whatsoever nature and
howsoever arising) and the cost of all additional management time and effort
expended by VF in protecting or enforcing VF’s rights and interests hereunder)as
a consequence of any failure by the Borrower to pay any sum due to VF when
payable. For the purposes of calculating the cost of such additional management
time and effort VF shall apportion the salary costs of its personnel involved on a
pro rata basis according to the time spent by such personnel in managing the
Borrower’s account taking account only of such time as would not have been
spent by such personnel had such failure to pay not occurred.
	 
	18  	ILLEGALITY





If any of the provisions of this Agreement and/or the Security Document become invalid, illegal or
unenforceable in any respect, under any law, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.




	19  	SET-OFF





In addition to any right of set-off or other similar right to which VF may be entitled in law, VF
may at any time and without notice to the Borrower combine and consolidate all or any of the
accounts between the Borrower and VF and/or set-off any moneys and in any currency whatsoever,
which VF may at any time hold for the account of the Borrower, against any liabilities whatsoever
which may be due or accruing due to VF from the Borrower.




11









 









	20  	DEMANDS AND NOTIFICATION BINDING





Any demand notification or certificate given by VF in writing and signed by a duly authorised
officer of VF specifying any rate of interest or any amounts due and payable under or in
connection with any provision of this Agreement and/or the Security Document or any of them shall
(in the absence of manifest error or error in law) be conclusive and binding upon the Borrower and
in any proceedings against the Borrower shall be conclusive evidence of such rate of interest or
amounts so due and payable.




	21  	GENERAL
	 
	21.1  	The contents of any report (whether written or oral) prepared by or on behalf of
VF for the purposes of VF considering whether or not to permit any drawing
under or to continue the Facility shall remain confidential and shall not be
available to the Borrower for any reason or purpose (save for any requirement of
law) in whole or in part and whether in original or copy form.
	 
	21.2  	VF may in its absolute discretion set-off or reserve against any monies due to the
Borrower by VF the amount of any and/or all actual and/or contingent liability of
the Borrower to VF at any time and from time to time howsoever arising (and
whether pursuant to this Agreement or otherwise) upon or following the
occurrence of an Event of Default or in the event of the Aggregate Limit being
exceeded for whatsoever reason.
	 
	21.3  	VF may rely and act upon any instruction or communication received or
purportedly received from or on behalf of the Borrower by facsimile or telex
transmission notwithstanding that no hard original copy of such instruction or
communication has been or is received by VF before so relying or acting,
provided that any such instruction or communication is purportedly from or
transmitted under the direction of an authorised signatory of the Borrower, and
the Borrower hereby agrees to indemnify VF and keep VF indemnified in respect
of all losses, costs, damages, expenses, interest or other liability incurred or
suffered by VF by reason of so relying and/or acting.
	 
	22  	GOVERNING LAW





This Agreement shall be governed by and construed in accordance with English Law and the Borrower
hereby submits to the exclusive jurisdiction of the English Courts.




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THE SCHEDULE




Part 1





	1  	Maximum Loan Amount:- £250,000 (Pounds Sterling Two Hundred and Fifty Thousand)
(clauses 1.1 and 2.1)
	 
	2  	Aggregate Limit:- £2,500,000 (Pounds Sterling Two Million Five Hundred Thousand)
including the £2,000,000 (Pounds Sterling Two Million) Invoice Discounting Facility,
the £250,000 (Pounds Sterling Two Hundred and Fifty) Plant & Machinery Loan and
the £250,000 (Pounds Sterling Two Hundred and Fifty Thousand)
Stock Loan.
(clauses 1.1, 3.3 and 21.2)
	 
	3  	Facility Fee: There will be an Arrangement Fee of 1.0% of the facility limit, plus VAT at
the rate applicable payable in advance. Upon termination of the Agreement for the
Purchase of Debts any outstanding balance will be fully repayable. (clauses 1.1, 5.3 and
17.1(d))
	 
	4  	Administration Charge: N/A (per month or part thereof) (clause 5.3)
	 
	5  	Interest Rate: 2.5% over the Base Rate of Venture’s
Bankers for the time being in force.
(clauses 1.1,5.1 and 7.1)
	 
	6  	Collateral Reporting and Monitoring Requirements:- (clauses 1.1 and 12(c))
	 
	6.1  	Venture will require a detailed stock listing on a weekly basis in respect of stock owned
by Oilgear Towler Limited within 5 working days of each period end to include details of
all categories of stock and preferential liabilities.
	 
	6.2  	Assets - Venture will require an annual valuation of any Fixed Assets detailed within the
Eligible Collateral Formula to be conducted by a valuer acceptable to Venture, the cost of
which is to be met by the Client.
	 
	6.3  	Eligible Collateral Audits - per quarter annum following commencement of this Deed.
	 
	7  	Eligible Collateral Formula: (clauses 1.1, 3.2 and 3.3)
	 
	   	The Collateral Formula for the Stock Facility will be eligible stock x 25% less reserves
in respect of preferential creditors and prescribed part and subject to monthly reporting
and insurance.
	 
	   	Venture will require an acceptable waiver from any Landlord or Leaseholder where any stock
comprising collateral is located.
	 
	   	Venture will require to be named as First Loss Payee and joint insured under the terms of
any stock insurance policies held by the Client. Venture will require copy insurance
policies confirming amounts and terms of cover.
	 
	8  	Drawing Frequency (clause 3.1)
	 
	   	      Daily
	 
	9  	Repayment Terms (clause 6.1)




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	   	      Upon termination of the Facility
	 
	10.  	Availability Period (clause 3.1
	 
	   	The period commencing on the Commencement Date (as defined in the Agreement for the
Purchase of Debts) and terminating on termination of the Agreement.




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THE SCHEDULE




Part 2 - Security Document




An all assets Debenture in such form as VF may require constituting certain fixed charges and
a floating charge over whole of the Borrower’s undertaking and assets.




3









 








IN WITNESS of which the parties have signed this agreement on the date set out above.



SIGNED AND DELIVERED AS A DEED




By OILGEAR TOWLER LIMITED




	 	 	 
	/s/
A. Normington

	 	 
	


	 	 
	a Director
	 	 
	 
	 	 
	/s/ W. D.Whitehead
	 	 
	


	 	 
	*director/company secretary
	 	 






EXECUTED AS A DEED




By /s/ David Richard Kelsey




as Attorney for VENTURE FINANCE PLC




in the presence of:




	 	 	 
	/s/ Paul Apps

	 	 
	


	 	 







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