Document:

Exhibit 10.1

 

Exhibit 10.1

ENPRO INDUSTRIES, INC.

AMENDED AND RESTATED 2002 EQUITY COMPENSATION PLAN

RESTRICTED SHARES AWARD AGREEMENT

	 	 	 	 	 
	GRANTED TO

	 	GRANT DATE
	 	NUMBER OF SHARES
	 

	 	 
	 	 

This Restricted Shares Award Agreement, including all Exhibits hereto (the “Agreement”), is made
between EnPro Industries, Inc., a North Carolina corporation (the “Company”), and you, an employee
of the Company or one of its subsidiaries.

The Company sponsors the EnPro Industries, Inc. Amended and Restated 2002 Equity Compensation Plan
(the “Plan”). A prospectus describing the Plan is enclosed as Exhibit A. The Plan itself
is available upon request, and its terms and provisions are incorporated herein by reference. When
used herein, the terms which are defined in the Plan shall have the meanings given to them in the
Plan, as modified herein (if applicable).

In recognition of the value of your contribution to the Company, you and the Company mutually
covenant and agree as follows:

	1.	 	Subject to the terms and conditions of the Plan and this Agreement, the Company awards to
you the number of shares of Common Stock shown above (the “Shares”).
	 
	2.	 	You acknowledge having read the Prospectus and agree to be bound by all the terms and
conditions of the Plan and this Agreement.
	 
	3.	 	The Shares shall are issued pursuant to this Agreement and the restrictions thereon shall
lapse on the date(s) shown on the enclosed Exhibit B. Until the restrictions lapse,
the Shares shall be held by the Company as custodian pursuant to the terms of this
Agreement. While the Shares are so held by the Company, you shall not have the right to sell
or otherwise dispose of the Shares or any interest therein.
	 
	4.	 	Prior to the restrictions lapsing, you shall have the right to receive dividends on the
Shares and to vote the Shares.
	 
	5.	 	You agree that you shall comply with (or provide adequate assurance as to future
compliance with) all applicable securities laws and income tax laws as determined by the
Company as a condition precedent to the release of any Shares pursuant to this Agreement.
In addition, you agree that, upon request, you will furnish a letter agreement providing
that (i) you will not distribute or resell any of said Shares in violation of the Securities
Act of 1933, as amended, (ii) you will indemnify and hold the Company harmless against all
liability for any such violation and (iii) you will accept all liability for any such
violation.
	 
	6.	 	By executing and returning the Beneficiary Designation Form attached as Exhibit C,
you may designate a beneficiary to receive any Shares awarded hereunder in the event of your
death while in service with the Company. If you do not designate a beneficiary or if your
designated beneficiary does not survive you, then your beneficiary will be your estate.
	 
	7.	 	You acknowledge and agree that upon your termination of employment with the Company and
its subsidiaries resulting in the forfeiture of any restricted Shares in accordance with
paragraph 3 and Exhibit B

Page 1 of 12

 

	 	 	of this Agreement or otherwise in accordance with the Plan, (i) your right to receive cash
dividends on, and all other rights, title or interest in, to or with respect to, restricted
Shares shall automatically, without further act, terminate and (ii) the restricted Shares
shall be forfeited and surrendered to the Company. You hereby irrevocably appoint (which
appointment is coupled with an interest) the Company as your agent and attorney-in-fact to
take any necessary or appropriate action to cause the Shares to be so surrendered to the
Company, including without limitation executing and delivering stock powers and instruments of
transfer, making endorsements and/or making, initiating or issuing instructions or entitlement
orders, all in your name and on your behalf. You hereby ratify and approve all acts done by
the Company as such attorney-in-fact. Without limiting the foregoing, you expressly
acknowledge and agree that any transfer agent for the Shares is fully authorized and protected
in relying on, and shall incur no liability in acting on, any documents, instruments,
endorsements, instructions, orders or communications from the Company in connection with the
Shares or the transfer thereof, and that any such transfer agent is a third party beneficiary
of this Agreement.
	 
	8.	 	The existence of this award shall not affect in any way the right or power of the Company
to make or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference stocks
ahead of or convertible into, or otherwise affecting the Company’s Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.
	 
	9.	 	Any notice which either party hereto may be required or permitted to give to the other shall
be in writing and may be delivered personally, by intraoffice mail, by fax, by electronic
mail or other electronic means, or via a postal service, postage prepaid, to such electronic
mail or postal address and directed to such person as the Company may notify you from time to
time; and to you at your electronic mail or postal address as shown on the records of the
Company from time to time, or at such other electronic mail or postal address as you, by
notice to the Company, may designate in writing from time to time.
	 
	10.	 	Regardless of any action the Company or your employer takes with respect to any or all
income tax, payroll tax or other tax-related withholding (“Tax-Related Items”), you
acknowledge that the ultimate liability for all Tax-Related Items owed by you is and remains
your responsibility and that the Company and/or your employer (i) make no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with any aspect
of this award, including the grant and vesting of the Shares, the subsequent sale of Shares
following vesting and the receipt of any dividends; and (ii) do not commit to structure the
terms of the grant or any aspect of the Shares to reduce or eliminate your liability for
Tax-Related Items.
	 
	 	 	In the event the Company determines that it and/or your employer must withhold any Tax-Related
Items as a result of your participation in the Plan, you agree as a condition of the grant of
the Shares to make arrangements satisfactory to the Company and/or your employer to enable it
to satisfy all withholding requirements, including, but not limited to, withholding any
applicable Tax-Related Items from the vesting and delivery of the Shares. In addition, you
authorize the Company and/or your employer to fulfill its withholding obligations by all legal
means, including, but not limited to: withholding Tax-Related Items from your wages, salary or
other cash compensation your employer pays to you; withholding Tax-Related Items from the cash
proceeds, if any, received upon sale of any Shares following vesting; and at the time of
vesting, withholding Shares sufficient to meet minimum withholding obligations for Tax-Related
Items. The Company may refuse to deliver Shares upon vesting if you fail to comply with any
withholding obligation.
	 
	11.	 	In the event any provision of this Agreement shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the Agreement,
and the Agreement shall be construed and enforced as if the illegal or invalid provision had
not been included. This Agreement constitutes the final understanding between you and the
Company regarding the Shares. Any prior agreements, commitments or negotiations concerning
the Shares are superseded. Subject to the terms of the Plan, this Agreement may only be
amended by a written instrument signed by both parties.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized
officer, and you have hereunto set your hand, all effective as of the Grant Date listed above.

	 	 	 	 	 	 	 	 	 	 	 
	ENPRO INDUSTRIES, INC.	 	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

Page 3 of 12

 

EXHIBIT A

PROSPECTUS

3,600,000 SHARES

ENPRO INDUSTRIES, INC.

COMMON STOCK

 

2002 EQUITY COMPENSATION PLAN

(2005 AMENDMENT AND RESTATEMENT)

 

     This Prospectus relates to the offer and sale of up to 3,600,000 shares of our common stock to
eligible employees under the 2002 Equity Compensation Plan (2005 Amendment and Restatement) (the
“Plan”). The Plan was approved by our Board of Directors at its February 2005 meeting and by our
shareholders at the May 10, 2005 annual meeting. The Plan terminates on May 22, 2012, unless
terminated earlier by our Board of Directors.

     The purpose of the Plan is to promote the interests of the shareholders by providing
stock-based incentives to selected employees and “Outside Directors” to align their interests with
shareholders and to motivate them to put forth maximum efforts toward the continued growth,
profitability and success of our company.

     The Plan is generally administered by the Compensation and Human Resources Committee of our
Board (the “Committee”). See “Administration” below. The Plan is not a qualified pension,
profit-sharing or stock bonus plan within the meaning of Section 401(a) of the Internal Revenue
Code of 1986, as amended (the “Code”). Further, in our view, the Plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974.

     For additional information concerning awards made under the Plan, please contact Steve
Spradling at 704-731-1516.

          This document constitutes part of a prospectus covering securities that have been registered
under the Securities Act of 1933, as amended (the “Securities Act”).

 

The date of this Prospectus is February 15, 2008.

Page 4 of 12

 

SUMMARY OF PLAN

     The following summary of the Plan is subject to, and qualified in its entirety by reference
to, all the provisions of the Plan, a copy of which may be obtained upon request.

Eligibility

     Salaried, full-time employees of us or of our subsidiaries may participate in the Plan. The
Committee, in its discretion, will select the award recipients and the nature and amount of any
awards. The Committee may delegate to our CEO and other senior officers authority to make such
award determinations within certain limits.

     In addition, members of our Board of Directors and any of our subsidiary corporations of which
we own more than 50% of the voting stock, excluding directors who are employees or former employees
of us or our subsidiaries within five years after their termination of employment (“Outside
Directors”) are eligible to receive awards of phantom shares as described below.

Number of Shares

     There are 3,600,000 shares of our common stock available for issuance under the Plan. If an
award made under the Plan terminates, expires, lapses or is canceled, the shares covered by that
award remain available for issuance under the Plan. Likewise, shares used to pay any option
exercise price or to satisfy a tax withholding obligation remain available for issuance under the
Plan. Shares of our common stock issued pursuant to the Plan may be original issue shares or
treasury shares.

Awards to Eligible Employees

     Pursuant to the Plan, the Committee may award eligible employees incentive stock options
(“ISOs”), nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”), performance
shares, restricted stock shares and other awards. Each award will be evidenced by an award
document setting forth the terms and provisions applicable to the award.

     Stock Options and Stock Appreciation Rights. The Plan provides for the grant of options to
purchase shares of our common stock at option prices which are not less than the fair market value
of shares of our common stock at the close of business on the grant date. The Plan also provides
for the grant of SARs, which entitle holders upon exercise to receive shares of our common stock
with a value equal to the difference between (i) the fair market value on the exercise date of the
shares with respect to which an SAR is exercised and (ii) the fair market value of such shares on
the grant date.

     In making an option award, the Committee determines whether the award will be either an ISO or
NQSO. The Committee also establishes all of the other terms and conditions of each option award
and of any SAR at the time of grant, including any vesting requirements.

     The applicable award document will specify the term of the option or SARs (although ISOs may
not have a term exceeding 7 years from the date of grant), the extent to which options and SARs may
be exercised during their respective terms, including in the event of your death, disability or
termination of employment. You may pay the option exercise price either in cash or by tendering
shares of our common stock with a fair market value at the date of the exercise equal to the
portion of the exercise price which you do not pay in cash. In addition, the Committee may from
time to time allow cashless exercises by any means which it determines to be consistent with the
Plan’s purposes and applicable law.

Page 5 of 12

 

     You will have no rights as a shareholder until you become the holder of record of shares of
our common stock issued upon exercise of such stock options.

     Performance Shares. The Committee may make awards of performance shares (which may be actual
shares of our common stock or phantom shares) subject to conditions established by the Committee
that may include attainment of specific performance objectives. Performance share awards may
include the awarding of additional shares upon attainment of the specified performance objectives.

     Restricted Shares. A restricted share is an actual share of our common stock issued in your
name that is subject to certain vesting requirements and which we hold until the applicable vesting
date, at which time the share is released to you. The Committee establishes all of the terms and
conditions of each award at the time of grant, including any vesting requirements, which are set
forth in an award document. Restricted share awards that vest based on continued employment
generally have a minimum three year vesting period. Prior to vesting, you may vote and receive cash
dividends with respect to restricted shares as specified in your award document.

     Other Awards. The Committee may make other awards under the Plan in units or phantom shares,
the value of which is based, in whole or in part, on the value of our common stock. The Committee
may provide that such awards to be paid in cash, in shares, or in a combination of both cash and
shares, under such terms and conditions as the Committee may establish, which are set forth in an
award document.

Awards of Phantom Shares to Outside Directors

     Pursuant to the Plan, each Outside Director receives an annual grant of phantom shares on each
“Grant Date” (as defined below) equal in value to $25,000 (based on the fair market value of the
our common stock as of the date immediately preceding the applicable Grant Date). Such grants take
place at the first meeting of the Board of Directors each year or, if earlier, the date in each
year when stock options or performance share awards are granted to eligible employees (the “Grant
Date”). Each Outside Director receives annual grants commencing in the year following the Outside
Director’s election to the Board and continuing through the Outside Director’s tenth year of
service as a Director. For Outside Directors first elected to the Board of Directors following the
effective date of the Plan, the Outside Director also receives upon initial election to the Board
of Directors a one-time grant of phantom shares equal in value to $30,000 (based on the fair market
value of the our common stock as of such date of initial election to the Board of Directors).

     The terms and provisions of the phantom shares are as follows:

     Vesting. Phantom shares granted to Outside Directors are fully vested at grant.

     Dividend Equivalents. Dividend equivalents accrue on all phantom shares granted to Outside
Directors. Upon the payment date of each dividend declared on the our common stock, that number of
additional phantom shares will be credited to each Outside Director’s award which has an equivalent
fair market value to the aggregate amount of dividends which would be paid if the number of the
Outside Director’s phantom shares were actual shares of the common stock. Dividend equivalents are
vested at the time the dividend is paid.

     Payment. Upon termination of service of an Outside Director as a member of the Board of
Directors (the “termination date”), we will pay to the Outside Director all phantom shares credited
to the Outside Director on the termination date in the form of one share of our common stock for
each whole phantom share, with cash for any fractional phantom share based on the fair market value
of our common stock on the applicable date. The shares of common stock are paid and delivered as
soon as administratively practicable after the termination date.

Page 6 of 12

 

Award Limits

     The following limits apply to awards made under the Plan:

	 	•	 	In no event may any individual receive awards under the Plan for a given calendar
year covering in excess of 500,000 shares of our common stock.
	 
	 	•	 	We will not grant ISOs covering in the aggregate more than 1,000,000 shares of our
common stock during the term of the Plan.
	 
	 	•	 	We will not issue more than 1,000,000 shares of our common stock is respect of
performance share awards or other equity-based awards.
	 
	 	•	 	We will not issue more than 150,000 shares of our common stock is respect of
restricted share awards.

Transferability of Awards

     You may not transfer any award granted under this Plan other than by will or the laws of
descent and distribution or by such other means as the Committee may approve from time to time.

Withholding for Payment of Taxes

     The Committee will have the right to determine the amount of any Federal, state or local
required withholding tax, and may require that any such required withholding tax be satisfied by
withholding shares of our common stock or other amounts which would otherwise be payable under this
Plan.

Changes in Capitalization and Similar Changes

     In the event of any change in the outstanding shares of our common stock by reason of any
stock dividend, stock split, spin-off, recapitalization, merger, consolidation, combination,
exchange of shares or otherwise, the aggregate number of shares of our common stock with respect to
which awards may be made under the Plan, and the terms, types of shares and number of shares of any
outstanding awards under the Plan may be equitably adjusted by the Committee in its discretion to
preserve the benefit of the award for both you and us.

Change in Control

     The Plan provides that, in the event of a change in control of our company (as defined in the
Plan), all options and SARs will be fully exercisable as of the date of the change in control and
will remain exercisable for a period of two years thereafter (not to exceed the original award
term). The Committee may also take actions with respect to outstanding awards of performance
shares or restricted shares or other awards.

Amendment and Termination of Plan

     Our Board of Directors has the power to amend, modify or terminate the Plan on a prospective
basis, provided that the Board of Directors may condition any amendment to the Plan on shareholder
approval if it deems shareholder approval to be necessary or appropriate.

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Administration

     The Plan is administered by the Committee. Under the Plan, the Committee has the authority to
(i) select the employees to receive awards from time to time, (ii) make awards in such amounts as
it determines, (iii) impose limitations, restrictions and conditions upon awards as it deems
appropriate, (iv) establish performance targets and allocation formulas for awards of performance
shares, restricted shares or other awards intended to be “qualified performance-based compensation”
under Code Section 162(m), (v) certify the attainment of performance goals, if applicable, as
required by Code Section 162(m), (vi) interpret the Plan and adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan, (vii) correct any
defect or omission or reconcile any inconsistency in the Plan or any award granted thereunder and
(viii) make all other determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. The Committee may delegate its authority under the
Plan to the extent permitted by applicable law. All determinations and decisions made by the
Committee pursuant to the Plan will be final, conclusive and binding.

Code Section 162(m)

     Because stock options and SARs granted under the Plan must have an exercise price equal at
least to fair market value at the date of grant, compensation from the exercise of stock options
and SARs should be treated as “qualified performance-based compensation” for Code Section 162(m)
purposes.

     In addition, the Plan authorizes the Committee to make awards of performance shares,
restricted shares and other awards that are conditioned on the satisfaction of certain performance
criteria. For awards intended to result in “qualified performance-based compensation,” the
Committee will establish prior to or within 90 days after the start of the applicable performance
period the applicable performance conditions. The Committee may select from the following
performance measures for such purpose: (i) net income, (ii) pretax income, (iii) consolidated
operating income, (iv) segment operating income, (v) return on equity, (vi) operating income return
on net capital employed, (vii) return on assets, (viii) cash flow (with or without regard to
asbestos), (ix) working capital, (x) share appreciation, (xi) total shareholder return, (xii) total
business return (calculated utilizing earnings before interest, taxes, depreciation and
amortization and cash flow) and (xiii) earnings per share of common stock. The Committee will
state the performance conditions in the form of an objective, nondiscretionary formula and will
certify in writing the attainment of such performance conditions prior to any payout with respect
to such awards. The Committee in its discretion may adjust downward the permissible amount of any
such award, even if the performance objective is achieved.

     CERTAIN FEDERAL INCOME TAX CONSEQUENCES

     This section contains only a general discussion of the potential United States federal income
tax consequences to you under the Plan. State or local tax rules, and tax rules applicable in
jurisdictions outside the United Sates, are not discussed. The federal income tax consequences
relating to the Plan are complex. You should consult with your personal tax advisor regarding such
consequences.

     Incentive Stock Options. ISOs granted under the Plan are subject to the applicable provisions
of the Code, including Code Section 422. If shares of our common stock are issued to you upon the
exercise of an ISO, and if you make no “disqualifying disposition” of such shares within one year
after the exercise of the ISO or within two years after the date the ISO was granted, then (i) you
will recognize no income at the time of the grant of the ISO, (ii) you will recognize no income,
for regular income tax purposes, at the date of exercise, (iii) upon sale of the shares acquired by
exercise of the ISO, any amount realized in excess of the option price will be taxed to you, for
regular income tax purposes, as a capital gain and any loss sustained will be a capital loss, and
(iv) we will not be allowed to take any deduction for federal income tax purposes. The applicable
capital gain tax rate will depend on how long the shares were held and on your income tax bracket.
If you make a “disqualifying disposition” of such shares, you will realize taxable ordinary income
in an amount equal to the excess of the fair market value

Page 8 of 12

 

of the shares purchased at the time of exercise over the option price (the “bargain purchase
element”) and we will be entitled to a federal income tax deduction equal to such amount. The
amount of any gain in excess of the bargain purchase element realized upon a “disqualifying
disposition” will be taxable as capital gain to the holder (for which we will not be entitled a
federal income tax deduction). Upon exercise of an ISO, you may be subject to alternative minimum
tax.

     Nonqualified Stock Options. With respect to NQSOs granted under the Plan, (i) you will
recognize no income at the time the NQSO is granted, (ii) at exercise, you will recognize ordinary
income in an amount equal to the difference between the option price and the fair market value of
the shares on the date of exercise, and we will receive a tax deduction for the same amount, and
(iii) on disposition, appreciation or depreciation after the date of exercise is treated as a
capital gain or loss, in which case the applicable capital gain tax rate will depend on how long
you held the shares and on your income tax bracket.

     Stock Appreciation Rights. SARs granted under the Plan are taxed much like NQSOs: (i) you
will recognize no income at the time the SAR is granted, (ii) at exercise, you will recognize
ordinary income in an amount equal to the numbers of shares in respect of which the SAR is
exercised multiplied by the difference between the fair market value of the shares on the date of
exercise and the fair market value of the shares on the date of grant, and we will receive a tax
deduction for the same amount, and (iii) on disposition of shares acquired upon exercise of the
SAR, appreciation or depreciation after the date of exercise is treated as a capital gain or loss,
in which case the applicable capital gain tax rate will depend on how long you held the shares and
on your income tax bracket.

     Performance Shares. Generally, you are not taxed on performance shares until the date on which
you become entitled to a payout of the earned performance shares. On the date you become entitled
to receive the earned shares following completion of a performance cycle, the fair market value of
the shares at that time is considered to be ordinary income and you will be taxed on that amount.
If you hold the shares and later sell them, any appreciation over the market value of the shares
when you received them at the end of the performance cycle will be taxed based on capital gains tax
rules. We generally will be entitled to a deduction equal to the amount that is taxable as
ordinary compensation income to you.

     Restricted Shares. Upon becoming entitled to receive shares at the end of the applicable
restriction period without a forfeiture, you will have ordinary income in an amount equal to the
fair market value of the shares at that time. However, if you make an election under Code Section
83(b) within 30 days of the date of the grant, you will have ordinary taxable income on the date of
the grant equal to the fair market value of the restricted shares as if the shares were
unrestricted and could be sold immediately. If you forfeit the shares subject to such election, you
will not be entitled to any deduction, refund or loss for tax purposes. Upon sale of the shares
after the forfeiture period has expired, the holding period to determine whether you have long-term
or short-term capital gain or loss begins when the restriction period expires, and the tax basis
will be equal to the fair market value of the shares when the restriction period expires. However,
if you timely elect to be taxed as of the date of grant, the holding period commences on the date
of the grant and the tax basis will be equal to the fair market value of the shares on the date of
the grant as if the shares were then unrestricted and could be sold immediately. We generally will
be entitled to a deduction equal to the amount that is taxable as ordinary compensation income to
you.

     Phantom Shares for Outside Directors. Generally, you will have ordinary compensation income
upon payment of the phantom shares in an amount equal to the fair market value of the shares of
common stock delivered (plus cash for any fractional phantom shares). As an Outside Director, this
will be self-employment income subject to self-employment taxes. The holding period to determine
whether you have long-term or short-term capital gain or loss for a subsequent sale of the shares
of common stock received in payment of the phantom shares begins when the shares are delivered, and
the tax basis in the shares will be equal to the fair market value of the shares on the payment
date. We

Page 9 of 12

 

generally will be entitled to a deduction equal to the amount that is taxable as ordinary
compensation income to you.

     RESTRICTIONS ON RESALE

     If you are one of our “affiliates” as defined in Rule 405 under the Securities Act, resales of
shares of our common stock that you acquire under awards under the Plan will be subject to the
volume, manner of sale and reporting requirements of Rule 144 under the Securities Act unless we
register your shares under the Securities Act for resale pursuant to a separate prospectus. If you
have been designated as one of our reporting officers for purposes of Section 16(b) of the
Securities Exchange Act of 1934 (the “Exchange Act”), resales of shares of our common stock that
you acquire under awards pursuant to the Plan may be “matched” with nonexempt purchases of our
common stock within the previous or following six months for purposes of the “short-swing profits”
recovery provisions of Section 16(b). Further, in no event may you sell shares of our common
stock, whether acquired pursuant to the Plan or otherwise, if you are in possession of material
information regarding our company that has not been publicly disclosed.

     You are advised to consult with counsel regarding your status as an affiliate and as a Section
16(b) reporting officer and the application of other federal and state securities laws to resales
of shares of our common stock that you acquire pursuant to the Plan.

     ADDITIONAL INFORMATION

     We have filed a registration statement with respect to the shares of our common stock offered
under the Plan with the Securities and Exchange Commission under the Securities Act. This
registration statement incorporates by reference certain documents including our most recent Annual
Report on Form 10-K and all subsequent reports on Form 10-K, Form 10-Q and Form 8-K, our proxy
statements, and a description of our common stock filed under the Exchange Act, which documents are
also incorporated by reference in this Prospectus.

     We will promptly furnish, without charge, on your request, a copy of any of the documents
incorporated by reference in the registration statement and in this Prospectus (other than exhibits
to such documents which are not specifically incorporated by reference in such documents), as well
as our most recent Annual Report to Shareholders, if any, and any and all documents supplementing
or updating the information contained in this Prospectus (including Plan information previously
delivered, if requested). Such requests should be addressed to: EnPro Industries, Inc., 5605,
Carnegie Boulevard, Suite 500, Charlotte, North Carolina, 28209-4674, Attn: Norma Wheeler.

Page 10 of 12

 

Exhibit B

ENPRO INDUSTRIES, INC.

AMENDED AND RESTATED 2002 EQUITY COMPENSATION PLAN

RESTRICTED SHARES AWARD AGREEMENT

Restrictions on Shares

     (a) Restrictions on Transfer. Prior to the date(s) specified in paragraph (b) below,
you may not sell, transfer, pledge, grant a security interest in or otherwise encumber the Shares.

     (b) Lapse of Restrictions. Subject to the provisions of paragraphs (c) and (d) below,
the restrictions on one-third of the Shares shall lapse on                    , the restrictions on another
one-third shall lapse on                     , and the restrictions on the remaining one-third shall lapse on
                    if you remain employed with the Company and its subsidiaries through such dates.

     (c) Termination of Employment. If your employment with the Company and its
subsidiaries terminates prior to                     , then any Shares that have not already become
unrestricted shares shall be forfeited as of the date of termination and surrendered to the
Company; provided, however, that all restrictions shall lapse immediately in the event of: (i)
your death, (ii) your becoming totally disabled under the Company’s Long-Term Disability Plan or
(iii) your retirement under the Company’s Salaried Retirement Plan.

     (d) Change of Control. All restrictions shall lapse immediately in connection with a
Change of Control (as such term is defined in the Plan).

Page 11 of 12

 

Exhibit C

ENPRO INDUSTRIES, INC.

AMENDED AND RESTATED 2002 EQUITY COMPENSATION PLAN

RESTRICTED SHARES AWARD AGREEMENT

Beneficiary Designation Form

Please complete this form only if you haven’t already designated a beneficiary for your Shares
granted under the Plan or if you wish to change your current beneficiary designation. Completed
forms should be returned to                      at                     .

************************************************************************************

With respect to the above described award of Shares under the EnPro Industries, Inc. Amended and
Restated 2002 Equity Compensation Plan (the “Plan”), I hereby designate the following person or
entity as my beneficiary with respect to any delivery of Shares in the event of my death.

If my beneficiary named below predeceases me, any such payment will be made to my estate.

	 	 	 	 	 
	Name and Address	 	 	 	Relationship
	of Beneficiary	 	Social Security #	 	to Participant
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 

I understand that I may change this designation at any time by executing a new form and delivering
it to the Human Resources Department. This designation supersedes any prior beneficiary designation
made by me under the Plan with respect to the Shares.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Employee’s Name (Please print)
	 	 
	Witness:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Signature of Employee
	 	 

	 	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 

	 	 

Received by the Human Resources Department this                     day of                     ,                     .

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 

Page 12 of 12Ex-10.1 Second Amendment and Restatement Agreement

 

Exhibit 10.1

28 December 2007

SALTON HOLDINGS LIMITED, SALTON EUROPE LIMITED AND OTHERS

AND

BURDALE FINANCIAL LIMITED

(as an Arranger, Agent and Security Trustee)

SECOND AMENDMENT AND RESTATEMENT AGREEMENT

McDERMOTT WILL & EMERY UK LLP

7 Bishopsgate

London

EC2N 3AR

Tel: 020 7577 6900

Fax: 020 7577 6950

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	1.

	 	INTERPRETATION
	 	 	3	 
	 
	 	 	 	 	 	 
	2.

	 	EFFECTIVE DATE
	 	 	3	 
	 
	 	 	 	 	 	 
	3.

	 	REPRESENTATIONS
	 	 	4	 
	 
	 	 	 	 	 	 
	4.

	 	COSTS AND EXPENSES
	 	 	4	 
	 
	 	 	 	 	 	 
	5.

	 	ASSIGNMENTS AND TRANSFERS
	 	 	4	 
	 
	 	 	 	 	 	 
	6.

	 	ASSIGNMENTS AND TRANSFERS BY THE FINANCE PARTIES
	 	 	4	 
	 
	 	 	 	 	 	 
	7.

	 	GUARANTORS
	 	 	4	 
	 
	 	 	 	 	 	 
	8.

	 	COUNTERPARTS AND DELIVERY
	 	 	4	 
	 
	 	 	 	 	 	 
	9.

	 	INCORPORATION BY REFERENCE
	 	 	5	 
	 
	 	 	 	 	 	 
	10.

	 	GOVERNING LAW
	 	 	5	 
	 
	 	 	 	 	 	 
	SCHEDULE 1 THE OBLIGORS	 	 	6	 
	 
	 	 	 	 	 	 
	SCHEDULE 2 CONDITIONS PRECEDENT FOR 2nd AMENDED AND RESTATED FACILITY AGREEMENT	 	 	7	 
	 
	 	 	 	 	 	 
	SCHEDULE 3 SECOND AMENDED AND RESTATED FACILITY AGREEMENT	 	 	8	 
	 
	 	 	 	 	 	 
	EXECUTION PAGES	 	 	9	 

2

 

THIS AGREEMENT IS DATED 28 DECEMBER 2007 AND MADE BETWEEN:

	(1)	 	SALTON HOLDINGS LIMITED (the “Company”);
	 
	(2)	 	THE AFFILIATES of the Company listed in Schedule 1 as Borrower and Guarantors (together with
the Company the “Obligors” and each an “Obligor”); and
	 
	(3)	 	BURDALE FINANCIAL LIMITED (Registered in England and Wales No.2656007) as agent for the
Finance Parties (“Agent” and in its capacity as security trustee “Security Trustee”).

RECITALS

	(A)	 	On 23 December 2005 the Company and the other Obligors entered into a facility
agreement with Burdale Financial Limited as Agent, Security Trustee and an Original Lender and
Wachovia Bank, National Association as an Original Lender which was amended and restated on 10
October 2006 (as amended from time to time, the “Facility Agreement”).
	 
	(B)	 	The purpose of this Agreement is to amend and restate the Facility Agreement.

IT IS AGREED as follows:

	1.	 	INTERPRETATION
	 
	1.1	 	Unless otherwise defined in this Agreement, terms defined in the Facility Agreement,
as amended, have the same meaning in this Agreement.
	 
	1.2	 	Subject to the amendments set out in this Agreement, all the provisions of the
Finance Documents shall remain in full force and effect in accordance with their terms and all
references in the Facility Agreement and the other Finance Documents (each as amended pursuant
to this Agreement) or any derivative terms shall, unless the context otherwise requires, be
taken as references to the Facility Agreement as amended pursuant to this Agreement.
	 
	2.	 	EFFECTIVE DATE

	2.1	 	With effect from the date on which the Agent has received all of the documents or other
evidence specified in Schedule 2 (Condition Precedent Documents for 2nd Amended and
Restated Facility Agreement) of this Agreement in form and substance reasonably satisfactory
to it or has waived receipt of any such document or evidence, the Facility Agreement shall be
amended and restated so that the Facility Agreement is as set out in Schedule 3 (Amended and
Restated Facility Agreement) to this Agreement. The Agent shall promptly notify the Company
of the date on which those conditions have been satisfied (the “Effective Date”).
	 
	2.2	 	This Agreement is a Finance Document.

3

 

	3.	 	REPRESENTATIONS
	 
	3.1	 	For the purposes of this Agreement and the Facility Agreement, on the Effective Date, but
without prejudice to or derogation from the representations made by the Obligors in respect of
the Facility Agreement prior to the Effective Date, the Obligors make the Repeating
Representations by reference to the facts and circumstances as at each Effective Date and as
if references therein to “Agreement” or “Finance Documents” and any derivative terms were
references to (a) the Facility Agreement as the same shall be amended by this Agreement on the
Effective Date and, separately, (b) this Agreement.
	 
	3.2	 	The Obligors represent the Repeating Representations on the Effective Date.
	 
	4.	 	COSTS AND EXPENSES
	 
	 	 	The Company shall, from time to time on demand of the Agent reimburse Finance Parties the
amount of all reasonable and proper costs and expenses (including legal expenses) incurred
by them in connection with the negotiation, preparation and execution of this Agreement and
the completion of the transactions contemplated by this Agreement.
	 
	5.	 	ASSIGNMENTS AND TRANSFERS
	 
	 	 	No Obligor may assign or transfer all or any of its rights, benefits and obligations under
this Agreement.
	 
	6.	 	ASSIGNMENTS AND TRANSFERS BY THE FINANCE PARTIES
	 
	 	 	The Agent may, on behalf of each Finance Party, at any time assign or transfer all or any
of its rights, benefits and/or obligations under this Agreement to any person to whom it
transfers or assigns its interests under the Facility Agreement.
	 
	7.	 	GUARANTORS
	 
	 	 	Each Guarantor, by executing this Agreement, acknowledges and agrees to all of the
arrangements contemplated by this Agreement and confirms that the guarantee contained
within the Facility Agreement remains in full force and effect.
	 
	8.	 	COUNTERPARTS AND DELIVERY
	 
	 	 	This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and which together shall constitute one and the same agreement.

4

 

	9.	 	INCORPORATION BY REFERENCE
	 
	 	 	The provision of clause 1.3 (Third Party Rights) and clause 35 (Enforcement) shall
apply to this Agreement as if set out in full herein and references to the Facility
Agreement were references to this Agreement.
	 
	10.	 	GOVERNING LAW
	 
	 	 	This Agreement shall be governed by and construed in accordance with English law.

IN WITNESS WHEREOF the parties to this Agreement have caused this Agreement to be duly executed on
the date written at the beginning of this Agreement.

5

 

EXECUTION PAGES

	 	 	 	 	 	 	 
	THE COMPANY
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	/s/ Chris Berry
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	THE ORIGINAL BORROWERS
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SALTON EUROPE LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets

6

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	THE ORIGINAL GUARANTORS
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	/s/ Chris Berry
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	SALTON EUROPE LIMITED

	 	 	)	 	 	/s/ Chris Berry
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	/s/ Andrew Streets
	Attention: The Company Secretary

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	PIFCO LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	HEADSTART LIMITED

	 	 	)	 	 	/s/ Chris Berry
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	OPTEC ELEMENTS LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	MOUNTAIN BREEZE LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	BEST PRODUCTS LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets

7

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	RUSSELL HOBBS TOWER LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	HI-TECH INDUSTRIES LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	D.H. HADEN LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	CARMEN LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	PIFCO DISTRIBUTION LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	HI-TECH BATTERIES LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets
	 
	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	ESALTONEUROPE LIMITED

	 	 	)	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	/s/ Chris Berry
	Fax No: 0161 682 1708

	 	 	)	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	/s/ Andrew Streets

8

 

THE AGENT FOR ITSELF AS AGENT, SECURITY TRUSTEE AND ORIGINAL LENDER, AND AS AGENT ON BEHALF OF THE
FINANCE PARTIES

	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 
	BURDALE FINANCIAL LIMITED

	 	 	)	 	 	/s/ Steven Osborne
	Address: 53 Queen Anne Street, London W1G 9HP

	 	 	)	 	 	 
	Fax No: 020 7935 5445

	 	 	)	 	 	/s/ Robin Aldridge
	Attention: Mr N Clark, Finance Director

	 	 	)	 	 	 

9

 

SCHEDULE 1

THE OBLIGORS

	 	 	 	 	 
	Name of Original Borrower

	 	Registration number
(or equivalent, if any)

	SALTON HOLDINGS LIMITED

	 	00114036	 
	SALTON EUROPE LIMITED

	 	00073700	 
	 
	 	 	 	 
	Name of Original Guarantor

	 	Registration number

	 

	 	(or equivalent, if any)

	SALTON HOLDINGS LIMITED

	 	000114036	 
	SALTON EUROPE LIMITED

	 	00073700	 
	PIFCO LIMITED

	 	01713199	 
	HEADSTART LIMITED

	 	01753485	 
	OPTEC ELEMENTS LIMITED

	 	02920706	 
	MOUNTAIN BREEZE LIMITED

	 	00539169	 
	BEST PRODUCTS LIMITED

	 	00316436	 
	RUSSELL HOBBS TOWER LIMITED

	 	00765557	 
	HI-TECH INDUSTRIES LIMITED

	 	01749436	 
	D.H. HADEN LIMITED

	 	00617666	 
	CARMEN LIMITED

	 	00834782	 
	PIFCO DISTRIBUTION LIMITED

	 	00194751	 
	HI-TECH BATTERIES LIMITED

	 	02199387	 
	ESALTONEUROPE LIMITED

	 	01936735	 

10

 

SCHEDULE 2

CONDITIONS PRECEDENT FOR 2nd AMENDED AND RESTATED FACILITY AGREEMENT

	1.	 	A certified copy of the constitutional documents of each Obligor.
	 
	2.	 	A certified copy of a resolution of the board of directors of each Obligor approving
the execution of this Amendment and Restatement Agreement and the taking of any action
required or permitted pursuant thereto.
	 
	3.	 	A specimen of the signature of each person authorised to give notices on behalf of
each Obligor.
	 
	4.	 	A certificate of each Obligor (signed by a director) confirming that the execution and
performance of this Agreement does not cause any borrowing, guaranteeing or similar limit
binding on any Obligor to be exceeded.
	 
	5.	 	Satisfactory company searches against each Obligor showing no charges registered
against any Obligor other than pursuant to the Finance Documents.
	 
	6.	 	Satisfactory results of telephone searches at the Central Registry for each Obligor
confirming that no winding-up or other administrative action has been commenced against any
Obligor.
	 
	7.	 	A copy of the Group Structure Chart as at the Effective Date certified by a director
of the Company.
	 
	8.	 	Evidence that the merger set out in the merger agreement dated as of 1 October
2007 between Salton Inc. SPF Merger Sub and APN Holding Co Inc. has been consummated.
	 
	9.	 	Executed copy of the Replacement Fee Letter.
	 
	10.	 	A copy of any other Authorisation or other document, opinion or assurance which the
Agent reasonably considers to be necessary or desirable in connection with the entry into and
performance of the transactions contemplated by this Agreement or for the validity and
enforceability of this Agreement.

11

 

SCHEDULE 3

SECOND AMENDED AND RESTATED FACILITY AGREEMENT

12

 

£40,000,000

AMENDED AND RESTATED FACILITY AGREEMENT as at            December 2007

amending a Facility Agreement originally dated 23 December 2005

for

(1) SALTON HOLDINGS LIMITED

(2) SALTON EUROPE LIMITED

Provided by

(3) THE LENDERS LISTED HEREIN AND

(4) BURDALE FINANCIAL LIMITED AS AGENT AND

(5) BURDALE FINANCIAL LIMITED AS SECURITY TRUSTEE

McDERMOTT WILL & EMERY UK LLP

7 Bishopsgate

London

EC2N 3AR

Tel: 020 7577 6900

Fax: 020 7577 6950

 

 

CONTENTS

	 	 	 	 	 	 	 
	CLAUSE	 	PAGE
	1.

	 	Definitions and Interpretation
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	The Facilities
	 	 	18	 
	 
	 	 	 	 	 	 
	3.

	 	Purpose
	 	 	19	 
	 
	 	 	 	 	 	 
	4.

	 	Conditions Of Utilisation
	 	 	19	 
	 
	 	 	 	 	 	 
	5.

	 	Utilisation
	 	 	20	 
	 
	 	 	 	 	 	 
	6.

	 	Restrictions Applicable to Individual Facilities
	 	 	21	 
	 
	 	 	 	 	 	 
	7.

	 	Receivables Finance
	 	 	22	 
	 
	 	 	 	 	 	 
	8.

	 	Provisions Concerning L/Cs
	 	 	24	 
	 
	 	 	 	 	 	 
	9.

	 	Cure Rights
	 	 	25	 
	 
	 	 	 	 	 	 
	10.

	 	Repayment
	 	 	26	 
	 
	 	 	 	 	 	 
	11.

	 	Illegality, Prepayment and Cancellation
	 	 	29	 
	 
	 	 	 	 	 	 
	12.

	 	Interest and Purchase Commission
	 	 	31	 
	 
	 	 	 	 	 	 
	13.

	 	Fees
	 	 	32	 
	 
	 	 	 	 	 	 
	14.

	 	Set-Off and Tax Gross Up
	 	 	32	 
	 
	 	 	 	 	 	 
	15.

	 	Increased Costs
	 	 	34	 
	 
	 	 	 	 	 	 
	16.

	 	Other Indemnities
	 	 	35	 
	 
	 	 	 	 	 	 
	17.

	 	Costs and Expenses
	 	 	36	 
	 
	 	 	 	 	 	 
	18.

	 	Guarantee and Indemnity
	 	 	37	 
	 
	 	 	 	 	 	 
	19.

	 	Representations and Warranties
	 	 	39	 
	 
	 	 	 	 	 	 
	20.

	 	Information and Financial Undertakings
	 	 	42	 
	 
	 	 	 	 	 	 
	21.

	 	General Undertakings
	 	 	42	 
	 
	 	 	 	 	 	 
	22.

	 	Events of Default
	 	 	47	 
	 
	 	 	 	 	 	 
	23.

	 	Changes to the Lenders
	 	 	50	 
	 
	 	 	 	 	 	 
	24.

	 	Changes to the Obligors
	 	 	50	 
	 
	 	 	 	 	 	 
	25.

	 	Role of the Agent
	 	 	51	 
	 
	 	 	 	 	 	 
	26.

	 	Conduct of business by the Finance Parties
	 	 	57	 
	 
	 	 	 	 	 	 
	27.

	 	Sharing among the Finance Parties
	 	 	57	 
	 
	 	 	 	 	 	 
	28.

	 	Payment Mechanics
	 	 	58	 
	 
	 	 	 	 	 	 
	29.

	 	Set-Off
	 	 	60	 
	 
	 	 	 	 	 	 
	30.

	 	COMALA System
	 	 	60	 
	 
	 	 	 	 	 	 
	31.

	 	Notices
	 	 	64	 
	 
	 	 	 	 	 	 
	32.

	 	Miscellaneous Provisions
	 	 	64	 
	 
	 	 	 	 	 	 
	33.

	 	Remedies and Waivers
	 	 	66	 
	 
	 	 	 	 	 	 

i

 

	 	 	 	 	 	 	 
	CLAUSE	 	PAGE
	 
	 	 	 	 	 	 
	34.

	 	Counterparts
	 	 	66	 
	 
	 	 	 	 	 	 
	35.

	 	Governing law
	 	 	66	 
	 
	 	 	 	 	 	 
	36.

	 	Enforcement
	 	 	66	 
	 
	 	 	 	 	 	 
	SCHEDULE 1 The Original Obligors	 	 	67	 
	 
	 	 	 	 	 	 
	SCHEDULE 2 Conditions precedent for initial utilisation	 	 	68	 
	 
	 	 	 	 	 	 
	SCHEDULE 3  Reporting And Financial Undertakings	 	 	72	 
	 
	 	 	 	 	 	 
	SCHEDULE 4 Forms of Request	 	 	82	 
	 
	 	 	 	 	 	 
	SCHEDULE 5 Part 1	 	 	88	 
	 
	 	 	 	 	 	 
	Form of Accession Letter	 	 	88	 
	 
	 	 	 	 	 	 
	SCHEDULE 5 Part 2	 	 	89	 
	 
	 	 	 	 	 	 
	Form of Resignation Letter	 	 	89	 

ii

 

THIS
AGREEMENT is dated 23 December 2005 as amended and restated on
10 October 2006 and 28 December 2007 and made between:

	(1)	 	SALTON HOLDINGS LIMITED (the “Company”);
	 
	(2)	 	SALTON EUROPE LIMITED (“SEL”);
	 
	(3)	 	THE AFFILIATES of the Company listed in Part I of Schedule 1 as original borrowers
(together with the Company the “Original Borrowers”, and each an “Original Borrower”);
	 
	(4)	 	THE AFFILIATES of the Company listed in Part II of Schedule 1 as original guarantors
(together with the Company the “Original Guarantors”, and each an “Original Guarantor”);
	 
	(5)	 	THE FINANCIAL INSTITUTIONS listed under the heading “Original Lenders” on the
execution pages of this Agreement (the “Original Lenders”); and
	 
	(6)	 	BURDALE FINANCIAL LIMITED (Registered in England and Wales No 2656007) (together with
its successors and assigns) in its capacity as agent (the “Agent”) and in its capacity as the
security trustee (“Security Trustee”).

IT IS AGREED as follows:

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement:
	 
	 	 	“AMAP” means Amalgamated Appliances Pty Limited.
	 
	 	 	“AMAP Disposal Proceeds” means amounts received by the Company in respect of the sale of the
entire issued share capital of AMAP that are to be distributed in the manner as shall be
agreed between the Company and their tax advisors.
	 
	 	 	“Accession Letter” means a document substantially in the form set out in Schedule 5 (Form of
Accession Letter).
	 
	 	 	“Actual Date of Payment” means in relation to a Purchased Receivable, the date on which full
payment in respect of that Purchased Receivable is made into a Blocked Account by the
relevant account debtor or the relevant Borrower.
	 
	 	 	“Additional Borrower” means a company which becomes an Additional Borrower in accordance
with Clause 24.2 (Additional Borrowers).
	 
	 	 	“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance
with Clause 24.4 (Additional Guarantors).
	 
	 	 	“Additional Obligor” means an Additional Borrower or an Additional Guarantor.
	 
	 	 	“Affiliate” means in relation to any person, a Subsidiary of that person or a Holding
Company of that person or any other Subsidiary of that Holding Company.

1

 

	 	 	“Amazon Terms” means the trading terms entered into by SEL with Amazon.co.uk Ltd (having
its principal place of business at Patriot Court 1-9 The Grove, Slough, Berkshire SL1 1QP)
from time to time.
	 
	 	 	“Amendment Fee” has the meaning set out in Clause 13.5 (Amendment Fee).
	 
	 	 	“Appraisal” means the method agreed between the Company and the Agent for the Assessment of
Stock.
	 
	 	 	“Argos Terms” means the trading terms entered into by SEL with Argos Limited (having its
principal place of business at Avebury, 489 — 499 Avebury Boulevard, Saxon Gate West,
Central Milton Keynes, MK9 2NW) from time to time.
	 
	 	 	“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption,
filing, notarisation or registration.
	 
	 	 	“Available Headroom” means, at any relevant time:

	 	(a)	 	the Total Availability;

	 	LESS 	 	 

	 	(b)	 	the amounts outstanding in respect of the Revolving Credit Facility
and the Receivables Finance Facility.

	 	 	“Availability Limit” means each of the limits on the utilisation of the Facilities
established or referred to in Clause 6 (Restrictions applicable to Individual Facilities).
	 
	 	 	“Availability Period” means:

	 	(a)	 	in relation to the IP Loan, the period from and including the date of
this Agreement to and including the date falling five Business Days after such
date;
	 
	 	(b)	 	in relation to the Revolving Credit Facility and the Receivables
Finance Facility, the period from and including the date of this Agreement to
and including the date falling five Business Days prior to the Final Repayment
Date or (in each case) such later date as the Lenders may allow; and
	 
	 	(c)	 	in relation to the Second Drawing of the Property Loan, the period
from and including the Effective Date of the Second Amendment and Restatement
Agreement to and including 30 days after such date.

	 	 	“Bank of Ireland Base Rate” means the base rate of the Bank of Ireland from time to time.
	 
	 	 	“Beaumark Contract” means the terms of trade entered into between SEL and Beaumark Limited
(having its principal place of business at L1 Ballymount Drive, Walkinstown, Dublin 12
Ireland) from time to time.

2

 

	 	 	“BDC Contract” means the terms of trade entered into between SEL and BRIDISCO Limited
(having its principal place of business at of Devonshire House, 550 White Hart Lane, London
N17 7RQ) from time to time.
	 
	 	 	“Blocked Accounts” has the meaning given to it in the Debenture.
	 
	 	 	“Borrower” means an Original Borrower or an Additional Borrower.
	 
	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for
general business in London and in any country in which a transfer or payment of funds is
required to be made on that day.
	 
	 	 	“Cash Request” means a request in the form set out in Part II of Schedule 4 (Forms of
Request).
	 
	 	 	“Charged Accounts” means the Blocked Accounts and the Other Accounts.
	 
	 	 	“Commitment” means:

	 	(a)	 	in relation to an Original Lender, the amount stated as such in relation to that Original Lender on the execution pages of this Agreement; and
	 
	 	(b)	 	in relation to any other Lender, the amount of any Commitment
transferred to it under this Agreement, to the extent not cancelled, reduced
or transferred by it under this Agreement,

provided however, that for so long as Wachovia Bank, National Association is a
Lender, Burdale Financial Limited undertake that its percentage of such Commitments
shall at all times be equal to or greater than the Commitment of Wachovia Bank,
National Association.

	 	 	“Constitutional Documents” means the certificate of incorporation, memorandum of association
and articles of association of each Obligor (or if not a company incorporated in England and
Wales the equivalent thereof in its jurisdiction of incorporation).
	 
	 	 	“Control” means:

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

	 	(i)	 	cast, or control the casting of, more than 50% of the maximum
number of votes that might be cast at a general meeting of the Company;
	 
	 	(ii)	 	appoint or remove all, or the majority, of the directors or
other equivalent officers of the company; or
	 
	 	(iii)	 	give directions with respect to the operating and financial
policies of the Company with which the directors or other equivalent
officers of the Company are obliged to comply; or

3

 

	 	(b)	 	the holding beneficially of more than 50% of the issued share
capital of the Company (excluding any part of that issued share capital that
carries no right to participate beyond a specified amount in a distribution of
either profits or capital).

	 	 	“Core Brands” means the following trademarks:

	 	(i)	 	Carmen,
	 
	 	(ii)	 	Haden; and
	 
	 	(iii)	 	Russell Hobbs

	 	 	including in each case, without limitation, all other indicia associated with these brands
and all rights in relation to any of the foregoing from time to time (whether registered or
unregistered including applications of any of them and the rights to apply for them) in any
part of the world.
	 
	 	 	“Debenture” means the first-ranking debenture executed or to be executed by the Obligors in
favour of the Agent in its capacity as Security Trustee.
	 
	 	 	“Deed of Accession” has the meaning given to it in the Debenture.
	 
	 	 	“Default” means an Event of Default or any event or circumstance which would (with the
expiry of a grace period, the lapse of time, the giving of notice, the making of any
determination under the Finance Documents or any combination of any of the foregoing) be an
Event of Default.
	 
	 	 	“Dilution Rate” means the monthly value of credit notes (including journal entries) issued
or made by a Borrower as a percentage of the monthly value of sales of such Borrower.
	 
	 	 	“Documents” means (i) in the case of a trade or commercial L/C issued in connection with the
purchase of any Goods, any and all documents which represent or relate to those Goods and/or
the possession of and/or ownership of and/or insurance of and/or warehousing of and/or any
other dealing in or with those Goods and (ii) in the case of a standby L/C issued in order
to secure the performance of an obligation or any liability arising in respect of a breach
of an obligation, a demand and any other document required under such L/C to be presented by
the beneficiary of such L/C.
	 
	 	 	“Dormant Subsidiary” means each of the following:

	 	(i)	 	Pifco Limited (CRN:01713199);
	 
	 	(ii)	 	Headstart Limited (CRN: 01753485);
	 
	 	(iii)	 	Optec Elements Limited (CRN: 02920706);
	 
	 	(iv)	 	Mountain Breeze Limited (CRN:00539169);
	 
	 	(v)	 	Best Products Limited (CRN:00316436);
	 
	 	(vi)	 	Russell Hobbs Tower Limited (CRN:00765557);

4

 

	 	(vii)	 	Hi-Tech Industries Limited (CRN:01749436);
	 
	 	(viii)	 	D.H. Haden Limited (CRN:00617666);
	 
	 	(ix)	 	Carmen Limited (CRN:00834782);
	 
	 	(x)	 	Pifco Distribution Limited (CRN:00194751);
	 
	 	(xi)	 	Hi-Tech Batteries Limited (CRN:02199387); and
	 
	 	(xii)	 	EsaltonEurope Limited (CRN:01936735).

	 	 	“Effective Date” has the meaning given to it in the Second Amendment and Restatement
Agreement.
	 
	 	 	“Eligible Receivables” has the meaning given to it in Schedule 3 Part I (Reporting and
Financial Undertakings).
	 
	 	 	“Eligible Stock” has the meaning given to it in Schedule 3 Part I (Reporting and Financial
Undertakings).
	 
	 	 	“Environmental Reports” means the reports prepared by Environmental Resources Management in
form and substance satisfactory to the Agent.
	 
	 	 	“European Subsidiaries” means each of (i) Salton Deutschland GmBH, (ii) Salton Productos
Espana S.A., (iii) Salton France S.A. and (iv) Salton Italia S.r.l.
	 
	 	 	“Event of Default” means any event or circumstance specified as such in Clause 22 (Events of
Default).
	 
	 	 	“European Sales Entity” means any European Subsidiary.
	 
	 	 	“Exchange Rate” means the prevailing spot rate of exchange of such bank as the Agent may
select for the purpose, at or around 11 am on the date on which any conversion of or
calculation in any currency is to be made under this Agreement.
	 
	 	 	“Existing Indebtedness” means amounts owing to HSBC Invoice Finance and HSBC Bank plc
pursuant to a facility letter dated 22 July 2004.
	 
	 	 	“Existing Inter-Company Loans” means the Salton Deutschland Loan, the Salton France Loan,
the Salton Espana Loan and the Salton Italia Loan as each is adjusted in any financial year
provided however, that the maximum total amount outstanding under all Existing
Inter-Company Loans shall not exceed £18,800,000 at the date of this Agreement.
	 
	 	 	“Expiry Date” means, in relation to an L/C, the last day of its Term.
	 
	 	 	“Facility” means the Property Loan Facility, the IP Loan Facility, the Receivables Finance
Facility and the Revolving Credit Facility.
	 
	 	 	“Facility Limit” means £40,000,000.

5

 

	 	 	“Final Repayment Date” means the date falling 60 months after the Effective Date of of the
Second Amendment and Restatement Agreement.
	 
	 	 	“Finance Document” means this Agreement, any Replacement Fee Letter, the Security Documents,
any Accession Letter, any Utilisation Request, the Hong Kong Waiver and Amendment Letter and
any other document designated as a “Finance Document” in writing by the Agent and the
Company.
	 
	 	 	“Finance Party” means the Agent, the Lenders and the Security Trustee.
	 
	 	 	“Financial Indebtedness” means any indebtedness for or in respect of:

	 	(a)	 	moneys borrowed;
	 
	 	(b)	 	any amount raised by acceptance under any acceptance credit 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;
	 
	 	(d)	 	the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with GAAP, be treated as a finance or
capital lease;
	 
	 	(e)	 	receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);
	 
	 	(f)	 	any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a borrowing;
	 
	 	(g)	 	any derivative transaction entered into in connection with protection
against or benefit from fluctuation in any rate or price (and, when
calculating the value of any derivative transaction, only the marked to market
value shall be taken into account);
	 
	 	(h)	 	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; and
	 
	 	(i)	 	(without double counting) the amount of any liability in respect of
any guarantee or indemnity for any of the items referred to in paragraphs (a)
to (h) above.

	 	 	“Forex Exposure” means, in relation to any unmatured Forex Transaction, the Forex Percentage
of such transaction.
	 
	 	 	“Forex Limit” means £2,000,000 (or such higher limit as the Lenders may from time to time
agree).
	 
	 	 	“Forex Percentage” means (i) 10 per cent. in relation to euros and US dollars and (ii) 20
per cent. in relation to any other currency or (in each case) such higher percentage as the
Agent may determine having regard to the nature of the currencies involved in any Forex
Transaction.

6

 

	 	 	“Forex Request” means a request in the form set out in Part IV of Schedule 4 (Forms of
Request).
	 
	 	 	“Forex Transaction” means a foreign exchange transaction entered into as a result of a
Utilisation of the Revolving Credit Facility.
	 
	 	 	“GAAP” means generally accepted accounting principles policies, standards and practices in
the United Kingdom or other country of incorporation where applicable at the date of this
Agreement and approved or adopted by the Accounting Standards Board.
	 
	 	 	“Goods” means all Stock, produce, inventory and/or other goods and in respect of which an
L/C has been issued.
	 
	 	 	“Group” means the Company and its Subsidiaries as at the date of this Agreement (which for
the avoidance of doubt shall include the European Subsidiaries and The Dormant
Subsidiaries).
	 
	 	 	“Group Structure Chart” means the group structure chart prepared by the Company and provided
to the Agent in the agreed form detailing the group structure for the Ultimate Parent and
its Subsidiaries.
	 
	 	 	“Guarantor” means an Original Guarantor or an Additional Guarantor.
	 
	 	 	“Hardman Contract” means the terms of trade entered into between SEL and Hardman Isherwood
Limited (having its principal place of business at Express Way, Whitwood, Nr Wakefield, West
Yorkshire WF10 5QJ) from time to time.
	 
	 	 	“Holding Company” means, in relation to a company or corporation, any other company or
corporation in respect of which it is a Subsidiary.
	 
	 	 	“Hong Kong Waiver and Amendment Letter” means the letter dated on or about the date hereof
between Salton Hong Kong Limited, SEL and Burdale Financial Limited as Agent.
	 
	 	 	“IP Loan” means a loan made in respect of the IP Loan Facility.
	 
	 	 	“IP Loan Facility” has the meaning given to it in Clause 2.1(d).
	 
	 	 	“IP Loan Facility Limit” shall be the maximum amount made available in Clause 2.1(d).
	 
	 	 	“IP Valuation” means a valuation of the Mortgaged IP, prepared by valuers and on a basis
acceptable to the Agent.
	 
	 	 	“L/C” means a letter of credit, performance bond, guarantee or similar assurance which is
from time to time either (i) opened or issued by the Agent or a Lender for the account of a
Borrower or (ii) with respect to which the Agent or a Lender has agreed to indemnify the
issuer or to guarantee the obligations of a Borrower to such issuer.

7

 

	 	 	“L/C Exposure” means:

	 	(a)	 	in relation to an L/C opened and in issue for the purpose of
purchasing Eligible Stock, the face amount of such L/C less the aggregate of
(i) the relevant Stock Percentage of the cost of such Eligible Stock covered
by that L/C and (ii) all freight, taxes, duties and other amounts estimated by
the Agent to be payable in order to ensure the delivery of such Eligible Stock
to the premises of the relevant Borrower or its nominee in the United Kingdom;
and
	 
	 	(b)	 	in relation to any other L/C, the face amount of such L/C in issue
and other commitments assumed by the Agent or a Lender with respect thereto
(other than in relation to the BACS Indemnity up to an amount of £400,000
where, provided there is no Default which is continuing, such Exposure shall
not be treated as LC Exposure).

	 	 	“L/C Limit” means £2,000,000 (or such higher limit as the Lenders may from time to time
agree).
	 
	 	 	“L/C Request” means a request in the form set out in Part III of Schedule 4 (Forms of
Request).
	 
	 	 	“Lender” means:

	 	(a)	 	any Original Lender; and
	 
	 	(b)	 	any person who has become a Party to this Agreement in accordance
with Clause 23 (Changes to the Lenders)

	 	 	which in each case has not ceased to be a Party in accordance with the terms of this
Agreement;
	 
	 	 	“Loan” means an outstanding loan (including any Property Loan, IP Loan, Receivables Loan or
Revolving Loan) made in respect of any of the Facilities (whether made pursuant to the terms
of any Utilisation Request or deemed to be made pursuant to Clause 6.6 (Deemed
Utilisations).
	 
	 	 	“Majority Lenders” means:

	 	(a)	 	if there are no Loans outstanding, a Lender or Lenders whose
Commitments aggregate more than 66 per cent of the Total Commitments (or, if
the Total Commitments have been reduced to zero, aggregated more than 66 per
cent of the Total Commitments immediately prior to the reduction);
	 
	 	(b)	 	at any other time, a Lender or Lenders whose participations in the
Loans then outstanding aggregate 66 per cent of all the Loans then
outstanding; or

8

 

	 	(c)	 	notwithstanding anything to the contrary contained herein, in the
event that there are only two (2) Lenders, then “Majority Lenders” shall mean
both of such Lenders and if there are more than two (2) Lenders but one (1)
Lender has more than sixty six and two thirds (66 2/3%) per cent of the
aggregate of the Commitments of the Lenders then “Majority Lenders” shall mean
such Lender and one other Lender.

	 	 	“Mandatory Cost” means the cost (calculated as a percentage rate per annum) of the London
branch of any bank from which the Lenders obtain funding for their provision of the
Facilities, or the direct cost to the Lenders, of complying with the requirements of the
Bank of England and/or the Financial Services Authority and/or any other applicable
regulatory authority in the UK in respect of monetary control, liquidity or otherwise.
	 
	 	 	“Margin” has the meaning set out in the Replacement Fee Letter.
	 
	 	 	“Marketing Re-Charge” means payments in any financial year by the Company to the Ultimate
Parent in an aggregate amount not exceeding £700,000 in respect of marketing support.
	 
	 	 	“Market Value” has the meaning given to the term “market value” in the RICS red book from
time to time (which includes a reasonable marketing period).
	 
	 	 	“Material Adverse Effect” means an effect which (in the reasonable opinion of the Majority
Lenders) results in or is likely to result in a material adverse change in (i) the ability
of any Obligor to perform any of its respective financial obligations under any of the
Finance Documents; or (ii) in the legality, validity, priority or enforceability of any
obligations or security created by or arising under any Finance Document.
	 
	 	 	“Maturity Date” means, in relation to a Receivable, the Business Day which is, or
immediately succeeds, the date which is the earlier of (i) 60 days after the contractual due
date for payment in respect of such Receivable and 90 days after the date of the invoice in
respect of such Receivables, (ii) 60 days after the contractual due date for payment in
respect of such Receivable if such Receivable arises under the BDC Contract, the Hardman
Contract or the Powerforce Contract or 120 days after the date of the invoice in respect of
such Receivable if such Receivable arises under the BDC Contract, the Hardman Contract or
the Powerforce Contract and (iii) 60 days after the contractual due date for payment in
respect of such Receivable if such Receivable arises under the Beaumark Contract or 150 days
after the date of the invoice in respect of such Receivable if such Receivable arises under
the Beaumark Contract.
	 
	 	 	“Mortgaged IP” means any intellectual property which is from time to time charged in favour
of the Finance Parties by way of first fixed charge pursuant to any of the Security
Documents.
	 
	 	 	“Mortgaged Property” means any real property which is from time to time charged in favour of
the Finance Parties by way of first legal mortgage.
	 
	 	 	“Net Stock Value” means the net value of Eligible Stock as determined by the relevant
Obligor in accordance with its customary practices and procedures (as disclosed to the
Agent prior to the date of this Agreement and as may be varied from time to time with the
Agent’s prior written consent).

9

 

	 	 	“Obligor” means a Borrower or a Guarantor.
	 
	 	 	“Original Obligor” means an Original Borrower or an Original Guarantor.
	 
	 	 	“Other Accounts” has the meaning given to it in the Debenture.
	 
	 	 	“Outstanding Purchase Price” means the aggregate amount from time to time outstanding in
respect of the Purchase Prices paid or deemed to be paid by the Lenders under this
Agreement.
	 
	 	 	“Overage Agreement” means each of:

	 	(a)	 	the overage agreement dated 31 January 2007 between Clearwater
Properties (Cannock) Limited and D.H. Haden Limited in relation to certain
property in Burntwood, Staffordshire; and
	 
	 	(b)	 	the overage agreement between Salton Europe Limited and Mercian
Developments Limited in relation to certain property in Womborne,
Staffordshire which is uncompleted as at the date of the Second Amendment and
Restatement Agreement.

	 	 	“Overall Group” means the Ultimate Parent and its Subsidiaries.
	 
	 	 	“Party” means a party to this Agreement.
	 
	 	 	“Permitted Currency” means Sterling, US $        and Euro.
	 
	 	 	“Permitted Disposals” means:

	 	(i)	 	the Wombourne Disposal;
	 
	 	(ii)	 	disposal of the lighting and general batteries business carried
on under the Pifco Trademark; and
	 
	 	(iii)	 	licencing or sub-licencing of any trademarks for Obligors for
trademarks that do not relate to the Core Brands.

	 	 	“Permitted Security Interest” means:

	 	(a)	 	any Security Interest granted in favour of the Agent; and
	 
	 	(b)	 	any Security Interest which arises by operation of law in the
ordinary course of business.

	 	 	“Personal Care Inventory” means the inventory described as such in the Company’s business
practice as at 28 September 2006.
	 
	 	 	“Powerforce Contract” means the terms of trade entered into between SEL and Powerforce
Distribution Limited (having its principal place of business at Bute Street, Fenton, Stoke
on Trent, Staffs ST4 3PR) from time to time.

10

 

	 	 	“Property Loan Facility” has the meaning given to it in Clause 2.1(c).
	 
	 	 	“Property Loan Facility Limit” shall be the maximum amount made available in Clause 2.1(c).
	 
	 	 	“Property Valuation” means a valuation of the Mortgaged Property carried out by a valuer
appointed or approved by the Agent on the basis of Market Value.
	 
	 	 	“Purchase Commission” means the purchase commission payable pursuant to Clause 12.1
(Calculation of Interest and Purchase Commission).
	 
	 	 	“Purchase Percentage” means:

	 	(a)	 	in relation to an Eligible Receivable which is owing by an account
debtor established and carrying on business in the United Kingdom 85 per cent;
and
	 
	 	(b)	 	in relation to an Eligible Receivable which is owing by an account
debtor and which is credit insured under arrangements or which are otherwise
acceptable to the Agent in its complete discretion 85 per cent;

	 	 	“Purchase Price” means, in respect of an Eligible Receivable, the amount produced by (i)
deducting from the face amount of such Eligible Receivable the maximum discounts, credits
and allowances of any nature which may be taken by or granted to such account debtor or any
other person in connection with such Eligible Receivable and (ii) multiplying the resultant
balance by the Purchase Percentage.
	 
	 	 	“Purchase Request” means a request in the form of Part I of Schedule 4 (Forms of Request).
	 
	 	 	“Purchased Receivable” means a Receivable purchased by the Agent under this Agreement.
	 
	 	 	“Qualifying Lender” means a bank or financial institution which is beneficially entitled to
interest payable to it in respect of an advance under a Finance Document and which is
either:

	 	(i)	 	a company resident in the United Kingdom for United Kingdom tax purposes; or
	 
	 	(ii)	 	a company not so resident in the United Kingdom which carries on a trade in the
United Kingdom through a permanent establishment and which brings into account in
computing its chargeable profits (for the purposes of section 11(2) of the Income and
Corporation Taxes Act 1988 (“ICTA”)) the whole of any share of interest payable in
respect of that advance that falls to it by reason of sections 114 and 115 of ICTA; or
	 
	 	(iii)	 	a Treaty Lender.

	 	 	“Quarantine Report” means a report produced by the Company on Goods which have been put into
quarantine by the Company and have remained in quarantine for a period of more than 15
Business Days.

11

 

	 	 	“Receivable” means any debt owing to a Borrower, together with all connected rights, claims,
deposits and payments.
	 
	 	 	“Receivables Finance Facility” means the receivables finance facility made available under
this Agreement as described in Clause 2.1(a).
	 
	 	 	“Receivables Loan” means a loan made in respect of the Receivables Finance Facility.
	 
	 	 	“Receivables Limit” means £30,000,000.
	 
	 	 	“Repeating Representations” has the meaning set out in Clause 19.15 (Repetition).
	 
	 	 	“Replacement Fee Letter” means any letter or letters dated on or about the date of the
Second Amendment and Restatement Agreement between the Agent and the Company (or the
Security Trustee and the Company) setting out any of the fees referred to in Clause 13
(Fees).
	 
	 	 	“Reserves” means reserves from time to time established by the Agent and notified by the
Agent to the Borrower to reflect (i) the full amount of any liabilities or amounts which may
(by virtue of any Security Interest granted to any person other than the Agent, the
provisions of the Enterprise Act 2002, any other statutory provision or otherwise) rank
equally with or in priority to the Security Interests granted to the Agent under the Finance
Documents other than for any holiday pay and accrued unpaid pension deductions where such
Reserve shall only be made for amounts in excess of £100,000 in total or to reflect any
amounts secured by the Security Interests intended to be created pursuant to the Finance
Documents and which may be unavailable to the Agent in the event of an insolvency, (ii) the
amounts believed by the Agent (acting reasonably) to be necessary to provide for possible
inaccuracies in any report or in any information provided to the Agent in connection with
this Agreement, (iii) the amounts believed by the Agent to represent three months of all
third party warehouse costs in relation to warehouses where Eligible Stock is for the time
being stored and similar liabilities and (iv) any Reserve arising by virtue of the operation
of Clause 7.3(d) (Order of Application).
	 
	 	 	“Review Period” means:

	 	(a)	 	each period (i) beginning on the date of this Agreement and (ii)
ending on the last day of each fiscal month during the Company’s present
financial year; and
	 
	 	(b)	 	each twelve month period ending on the last day of each subsequent
fiscal month.

	 	 	“Revolving Credit Facility” means the revolving credit facility made available under this
Agreement as described in Clause 2.1(b).
	 
	 	 	“Revolving Credit Limit” means £30,000,000.
	 
	 	 	“Revolving Loan” means a Loan made in respect of the Revolving Credit Facility.

12

 

	 	 	“Salton Deutschland Loan” means a £6,500,000 loan made by SEL to Salton Deutschland GmBH.
	 
	 	 	“Salton Espana Loan” means a £4,700,000 loan made by SEL to Salton Productos Espana S.A.
	 
	 	 	“Salton France Loan” means a £4,250,000 loan made by SEL to Salton France S.A.
	 
	 	 	“Salton Italia Loan” made by £3,400,000 loan made by SEL to Salton Italia s.r.l.
	 
	 	 	“Second Amendment and Restatement Agreement” means the second amendment and restatement
agreement dated [ ] December 2007 between the Obligors and the Agent amending and restating
this Agreement.
	 
	 	 	“Second Drawing of the Property Loan” means the additional Utilisation of the Property Loan
Facility in accordance with Clause 5.5 (Second Drawing of the Property Loan).
	 
	 	 	“Security Documents” includes (i) the Debenture, and (ii) any other document from time to
time executed by any person by way of security for the obligations of any Obligor pursuant
to this Agreement.
	 
	 	 	“Security Interest” means a mortgage, charge, pledge, lien or other security interest
securing any obligation of any person, or any arrangement having similar effect.
	 
	 	 	“Security Trustee” means the Agent acting in its capacity as a security trustee pursuant to
the Security Documents.
	 
	 	 	“SEL” means Salton Europe Limited a company incorporated in England and Wales and Company
Registration Number 00073700.
	 
	 	 	“Sterling” means the currency for the time being of the United Kingdom.
	 
	 	 	“Sterling Equivalent” means, in relation to any amount outstanding denominated or expressed
in a currency other than Sterling, the amount in Sterling which can be purchased with such
amount at the Exchange Rate on any relevant day.
	 
	 	 	“Stock” means each Borrower’s stock and inventory at any time.
	 
	 	 	“Stock Limit” means £30,000,000.
	 
	 	 	“Stock Percentage” means with respect to Stock which constitutes finished goods
constituting:

	 	(i)	 	Personal Care Inventory, 41%;
	 
	 	(ii)	 	goods in transit within the definition set out in paragraph (j)(ii) of
“Eligible Stock” in Schedule 3 (Reporting and Financial Undertakings), 70%; and
	 
	 	(iii)	 	all other finished goods landed in the UK (excluding Personal Care
Inventory), 67%.

13

 

	 	 	“Subsidiary” means a subsidiary within the meaning of Section 736 of the Companies Act 1985.
	 
	 	 	“System” means the electronic information system operated by the Agent and known as Comala.
	 
	 	 	“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).
	 
	 	 	“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.
	 
	 	 	“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment
under a Finance Document.
	 
	 	 	“Tax Payment” means an increased payment made by an Obligor to the Agent under Clause 14.2
(Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).
	 
	 	 	“Term” means each period determined under this Agreement for which the Agent or a Lender is
under a liability under or with respect to an L/C,
	 
	 	 	“Term Loan” means any IP Loan and any Property Loan.
	 
	 	 	“Term Loan Request” means a request in the form set out in Part V of Schedule 4 (Forms of
Request).
	 
	 	 	“Total Availability” means at any relevant time, (i) the Total Receivables Availability;
PLUS (ii) the Total Stock Availability LESS (iii) the amount of the Reserves.
	 
	 	 	“Total Commitments” means the aggregate of the Commitments of all of the Lenders.
	 
	 	 	“Total Receivables Availability” means at any time the aggregate of the Purchase Prices of
all of the Eligible Receivables.
	 
	 	 	“Total Stock Availability” means at any time, the Stock Percentage of the Net Stock Value of
Eligible Stock at such time.
	 
	 	 	“Trading Cashflow” means in relation to any Review Period or any other period, the
consolidated profit before tax on ordinary activities of the Company and its Subsidiaries
for that period:

	 	(c)	 	adding back any depreciation or amortisation;
	 
	 	(d)	 	deducting any unrealised currency gains;
	 
	 	(e)	 	excluding any extraordinary or exceptional profits;
	 
	 	(f)	 	deducting any capital expenditure; and
	 
	 	(g)	 	making such other adjustments as the Agent may from time to time
reasonably require or approve in writing.

14

 

	 	 	“Treaty Lender” means a Lender which:

	 	(a)	 	is treated as a resident of a Treaty State for the purposes of the
Treaty; and
	 
	 	(b)	 	does not carry on a business in the United Kingdom through a
permanent establishment with which that Lender’s participation in any part of
the Facility is effectively connected

	 	 	“Treaty State” means a jurisdiction having a double taxation on agreement (a “Treaty”) with
the United Kingdom which makes provision for full exemption from tax imposed by the United
Kingdom on interest.
	 
	 	 	“Ultimate Parent” means Salton Inc, a corporation incorporated in the State of Delaware.
	 
	 	 	“Ultimate Parent Change of Control” means the Ultimate Parent ceasing to Control the Company
by virtue of a sale to a third party that is not a part of the Overall Group at the date of
this Agreement;
	 
	 	 	“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance
Documents.
	 
	 	 	“UK Change of Control” means a change in the Control of the Company as such is existing at
the date of this Agreement;
	 
	 	 	“US Debt Documents” means:

	 	(i)	 	the Amended and Restated Credit Agreement dated as of May 9,
2003 and amended and restated as of June 15, 2004, as further amended
(the “First Lien Credit Agreement”), among the financial institutions
named therein the (“First Lien Lenders”, Wells Fargo Foothill, Inc., as
administrative agent and collateral agent (the “First Lien Agent”),
Silver Point Finance, LLC, as the co-agent, syndication agent,
documentation agent (the “First Lien Co-Agent”), arranger and book
runner, Salton Inc, each of its subsidiaries that are signatories
thereto as the borrowers and each of its other subsidiaries that are
signatories thereto as guarantors;
	 
	 	(ii)	 	the Credit Agreement dated as of August 26, 2005, as amended,
among the financial institutions named therein, as the lenders, The Bank
of New York, as the agent, Salton Inc., each of its subsidiaries that
are signatories thereto, as the borrowers, and each of its other
subsidiaries that are signatories thereto, as guarantors;
	 
	 	(iii)	 	the Indenture, dated as of December 16, 1998, as supplemented,
among Salton Inc., the guarantors (as defined therein) and SunTrust
Bank, as successor in interest to Norwest Bank Minnesota National
Association, as Trustee;

15

 

	 	(iv)	 	the Indenture dated as of April 23, 2001, as supplemented,
among Salton Inc, the Guarantors (as defined therein) and SunTrust Bank,
as successor in interest to Wells Fargo Bank Minnesota N.A., as Trustee;
	 
	 	(v)	 	the Waiver and Consent Under Amended and Restated Credit
Agreement dated on or about the date hereof , among the First Lien
Lenders, the First Lien Agent, the First Lien Co-Agent, Salton Inc.,
each of its subsidiaries that are signatories thereto as the borrowers
and each of its other subsidiaries that are signatories thereto as
guarantors, relating to the Facility Agreement; and
	 
	 	(vi)	 	the Notice to the Second Lien Agent dated on or about the date
hereof , relating to the Facility Agreement executed by the Company, the
First Lien Agent and the First Lien Co-Agent.

	 	 	“Utilisation” means a utilisation of a Facility.
	 
	 	 	“Utilisation Date” means the date on which a Utilisation is made.
	 
	 	 	“Utilisation Request” includes (as the context may require) a Purchase Request, a Cash
Request, an L/C Request, a Forex Request and a Term Loan Request.
	 
	 	 	“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature.
	 
	 	 	“Wombourne Disposal” means the sale by SEL of the freehold land described as “Land and
buildings on the east side of Heath Mill Road, Wombourne” with title number SF327891.
	 
	 	 	“Wombourne Sale and Leaseback” means the sale and leaseback transaction entered into between
Matrix Properties (I) Limited , Matrix Properties (II) Limited and SEL dated 31st January
2005 in relation to the leasehold property with title number SF497550 and described as “Land
on the east side of Heath Mill Road, Wombourne”.
	 
	 	 	“Year 1 Additional Inter Company Loans” means in the first twelve months from the date of
this Agreement the maximum amount of Euro 5,200,000.
	 
	1.2	 	Construction

	 	(a)	 	Unless a contrary indication appears, any reference in this Agreement
to:

	 	(i)	 	the Lender or to any Obligor shall be construed so as to include
its successors in title, permitted assigns and permitted transferees;
	 
	 	(ii)	 	“assets” includes present and future properties, revenues and
rights of every description;
	 
	 	(iii)	 	a “Finance Document” or any other agreement or instrument is a
reference to that Finance Document or other agreement or instrument as
amended or novated;

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	 	(iv)	 	a document being “in the agreed form” means that document which
has endorsed on it the words “in the agreed form” and which is
initialled by or on behalf of the Agent and the Company;
	 
	 	(v)	 	“indebtedness” includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money, whether
present or future, actual or contingent;
	 
	 	(vi)	 	a “person” includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or
partnership (whether or not having separate legal personality) or two or
more of the foregoing;
	 
	 	(vii)	 	a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law)
of any governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
	 
	 	(viii)	 	a “month” means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month but (i) if such numerically corresponding day is not a
Business Day, then such period shall end on the preceding Business Day
and (ii) if there is no numerically corresponding day, then such period
shall end on the last Business Day in that month;
	 
	 	(ix)	 	the singular includes the plural and vice versa;
	 
	 	(x)	 	a provision of law is a reference to that provision as amended
or re-enacted; and
	 
	 	(xi)	 	a time of day is a reference to London time.

	 	(b)	 	Clause and Schedule headings are for ease of reference only.
	 
	 	(c)	 	A Default (other than an Event of Default) is continuing if it has
not been remedied or waived and an Event of Default is continuing if it has
not been waived.

	1.3	 	Third party rights
	 
	 	 	A person who is not a party to this Agreement has no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
	 
	1.4	 	Currency Equivalents
	 
	 	 	Where there is a reference in this Agreement to any amount, limit or threshold
expressed in a currency other than Sterling, in ascertaining whether or not that amount,
limit or threshold has been attained, exceeded or achieved, an amount denominated in a
currency other than Sterling shall be taken into account at its Sterling Equivalent.

17

 

	1.5	 	Intra-Group Arrangements
	 
	 	 	Where, under the terms of this Agreement, any amount owing to a Finance Party by one
Obligor is in fact paid or repaid (wholly or in part) out of amounts which constitute the
property of another Obligor, then (i) the first Obligor shall thereby become indebted to the
second Obligor in an amount equal to the amount so paid or repaid and (ii) the amount so
owing shall, as between those Obligors, be repayable on demand (but without prejudice to any
provision of this Agreement which prohibits such repayments).
	 
	1.6	 	Cross-Collateral
	 
	 	 	Each Obligor acknowledges that:

	 	(a)	 	the obligations of each Obligor are cross-collateralised to the
extent stated in the Finance Documents; and
	 
	 	(b)	 	in consequence, moneys and assets owned by that Obligor may be
applied in or towards the discharge of moneys owing under the Finance
Documents by another Obligor.

	2.	 	THE FACILITIES
	 
	2.1	 	The Facilities
	 
	 	 	Subject to the terms of this Agreement, and during the Availability Period, the Lenders
make available:

	 	(a)	 	to the Borrowers, a Permitted Currency receivables finance facility
(the “Receivables Finance Facility”) up to the Receivables Limit pursuant to
which the Agent on behalf of the Lenders will from time to time during the
Availability Period purchase Receivables from the Borrowers;
	 
	 	(b)	 	to the Borrowers, a Permitted Currency revolving credit facility (the
“Revolving Credit Facility”) up to the Revolving Credit Limit pursuant to
which the Lenders will from time to time (i) make Revolving Loans to the
Borrowers, (ii) issue or procure the issue of L/Cs for the account of the
Borrowers and (iii) buy or sell foreign currencies (acceptable to the Lenders)
spot and/or forward for delivery at a future date on behalf of the Borrowers;
	 
	 	(c)	 	to the Borrowers, a Property Loan denominated in Sterling of up to
the lesser of (x) 85 per cent of the Property Valuation delivered to the Agent
prior to the date of the Second Amendment and Restatement Agreement and (y)
£3,500,000 (the “Property Loan Facility”); and
	 
	 	(d)	 	to the Borrowers, a single IP Loan denominated in Sterling of up to
£5,845,000 (the “IP Loan Facility”).

	2.2	 	Finance Parties’ rights and obligations

	 	(a)	 	The obligations of each Finance Party under the Finance Documents are
several. Failure by a Finance Party to perform its obligations under the
Finance Documents does not affect the obligations of any other Party under the
Finance Documents. No Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents.

18

 

	 	(b)	 	The rights of each Finance Party under or in connection with the
Finance Documents are separate and independent rights and any debt arising
under the Finance Documents to a Finance Party from an Obligor shall be a
separate and independent debt.
	 
	 	(c)	 	A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.

	3.	 	PURPOSE
	 
	3.1	 	Purpose
	 
	 	 	Each Borrower shall apply all amounts borrowed or raised by it in respect of the
Facilities:

	 	(a)	 	to refinance the Existing Indebtedness; and
	 
	 	(b)	 	for its general corporate and working capital purposes.

	3.2	 	Monitoring
	 
	 	 	No Finance Party is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement. A contravention of Clause 3.1 shall not affect the obligations
of the Obligors under the Finance Documents.
	 
	4.	 	CONDITIONS OF UTILISATION
	 
	4.1	 	Initial conditions precedent
	 
	 	 	No Borrower may deliver the initial Utilisation Request in respect of any Facility
unless the Agent has received all of the documents and other evidence listed in Schedule 2
Part I (Initial Conditions precedent) in form and substance satisfactory to the Agent.
	 
	4.2	 	Further conditions precedent
	 
	 	 	The Lenders will only be obliged to comply with the terms of a Utilisation Request if
on the date on which it is given and on the proposed Utilisation Date:

	 	(a)	 	no Default is continuing or would result from the proposed
Utilisation; and
	 
	 	(b)	 	the representations and warranties set out in Clause 19
(Representations and Warranties) are true in all material respects with
reference to the facts and circumstances then subsisting.

	4.3	 	Conditions for Requesting Utilisations Relating to Stock located in European
Jurisdictions
	 
	 	 	No Borrower may deliver a Utilisation Request for Loans to be made in relation to Stock
located in any European jurisdiction unless the Agent has received all of the documents and
other evidence for the relevant European Sales Entity incorporated in such European
Jurisdiction listed at Schedule 2 Part II (Additional Conditions Precedent for Lending in
Relation to Stock in European Jurisdictions). For the avoidance of doubt the provisions of
this Clause 4.3 shall not apply to Stock that is in transit to an Obligor and where the
conditions of paragraph 12 sub-paragraph (k) of the definition of Eligible Stock set out in
Schedule 3 have been complied with.

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	5.	 	UTILISATION
	 
	5.1	 	Delivery of a Utilisation Request

	 	(a)	 	A Borrower may utilise a Facility by delivery to the Agent of a duly
completed Utilisation Request with respect to the relevant Facility not later
than 11.00 a.m. on the Business Day preceding the proposed Utilisation Date.
The relevant Borrower will deliver the form of Utilisation Request appropriate
to the desired form of Utilisation.
	 
	 	(b)	 	If the Company delivers a Utilisation Request via the System then any
such request for a cash advance through the System shall be deemed to be a
Cash Request and each Borrower making such a Utilisation Request shall be
deemed to have given the confirmation in the final paragraph of the form of
Cash Request set out in Part II of Schedule 4 (Forms of Request).

	5.2	 	Completion of a Utilisation Request

	 	(a)	 	Each Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:

	 	(i)	 	the proposed Utilisation Date is a Business Day within the
Availability Period applicable to the Facility in question;
	 
	 	(ii)	 	the Utilisation Request complies with the terms of Clause 6
(Restrictions Applicable to Individual Facilities) and with all
other relevant provisions of this Agreement; and
	 
	 	(iii)	 	the Utilisation Request is expressed in a Permitted Currency
and it otherwise complies with (and contains the information and
enclosures required by) the applicable form of Utilisation Request.

	 	(b)	 	Only one Utilisation may be requested in each Utilisation Request.

	5.3	 	Lender’s Participation
	 
	 	 	If the conditions set out in this Agreement have been met, then:

	 	(a)	 	the Agent will promptly notify each Lender of any proposed
Utilisation and of that Lender’s participation in it;
	 
	 	(b)	 	each Lender shall make its participation in each Loan or other
Utilisation available to the Borrower on the proposed Utilisation Date in
accordance with the terms of this Agreement;
	 
	 	(c)	 	the amount of each Lender’s participation in each Loan or other
Utilisation will be the proportion which its Commitment bears to the Total
Commitments immediately prior to the making of the Loan or Utilisation (as the
case may be).

	5.4	 	Reutilisation
	 
	 	 	Subject to the terms of this Agreement, the Revolving Credit Facility is of a revolving
nature and amounts recovered or repaid in respect of the Revolving Credit Facility may
accordingly be redrawn. For this purpose, amounts received in respect of the Revolving
Credit Facility will be applied in reduction of the relevant Obligor’s liabilities on the
Business Day of actual receipt by the Agent.

20

 

	5.5	 	Second Drawing of the Property Loan
	 
	 	 	Subject to the terms of this Agreement, during the Availability Period for the Property
Loan the Company may submit a Utilisation Request for an additional tranche of the Property
Loan. When the additional tranche of the Property Loan has been drawn the two tranches of
Property Loan shall be treated as if they form one single Property Loan. That Property Loan
is a Term Loan and all the other provisions of this Agreement shall apply to that Property
Loan.
	 
	6.	 	RESTRICTIONS APPLICABLE TO INDIVIDUAL FACILITIES
	 
	6.1	 	Property Loan Facility/IP Loan Facility
	 
	 	 	The Property Loan Facility and the IP Loan Facility must each be drawn down in full in
one amount before the end of the applicable Availability Period. The amount which may be
drawn down in respect of the Property Loan Facility and the IP Loan Facility may not exceed
the limits established pursuant to Clauses 2.1(c) and (d) (The Facilities).
	 
	6.2	 	Overall Facility Limit
	 
	 	 	The aggregate amount of (i) the Outstanding Purchase Price, (ii) all Revolving Loans,
(iii) all L/C Exposures, (iv) all Forex Exposures, (v) the Property Loan and (vi) the IP
Loan shall not at any time exceed the Facility Limit.
	 
	6.3	 	Specific Facility Limits

	 	(a)	 	The aggregate amount of (i) the Outstanding Purchase Price, (ii) all
Revolving Loans, (iii) all L/C Exposures and (iv) all Forex Exposures shall
not at any time exceed the Total Availability.
	 
	 	(b)	 	The aggregate amount of (i) all Revolving Loans, (ii) all L/C
Exposures and (iii) all Forex Exposures shall not at any time exceed the
Revolving Credit Limit.
	 
	 	(c)	 	The Outstanding Purchase Price shall not at any time exceed the
Receivables Limit.
	 
	 	(d)	 	The aggregate amount of outstanding Revolving Loans shall not at any
time exceed the Revolving Credit Limit.
	 
	 	(e)	 	The aggregate amount of all L/C Exposures shall not at any time
exceed the L/C Limit.
	 
	 	(f)	 	The aggregate amount of all Forex Exposures shall not at any time
exceed the Forex Limit.

21

 

	6.4	 	Adjustments
	 
	 	 	The Agent may (after consultation with the Company and acting reasonably) from time to
time:

	 	(a)	 	reduce the Purchase Price to reflect the fact that the Dilution Rate
(taking into consideration any adjustments in relation to co-op advertising or
rebates) has increased to more than 5%;
	 
	 	(b)	 	reduce the Total Stock Availability (or any component of it) to
reflect (i) any reduction in the rate of turnover, quality, liquidation value
or other matter affecting patterns of sale or (ii) any reduction in any
applicable Availability Limit pursuant to any provision of this Agreement;
	 
	 	(c)	 	allocate the Reserves among the Borrowers in such proportions as the
Agent may deem appropriate save that in the case of Borrowers incorporated in
the United Kingdom the Agent shall allocate Reserves to SEL; and
	 
	 	(d)	 	establish, in relation to each Borrower, such sub-limits with respect
to the Utilisation of the Facilities (whether by reference to the Total
Availability attributable to the assets of particular Borrowers or otherwise)
as the Agent may deem appropriate.

	6.5	 	Prohibition on Utilisations
	 
	 	 	No Utilisation may be made if it would cause any of the limits referred to in the
foregoing provisions of this Clause 6 to be exceeded.
	 
	6.6	 	Deemed Utilisations
	 
	 	 	If the Agent makes any payment (i) pursuant to or in respect of any L/C or (ii) upon
the maturity of any Forex Transaction, then (and in each such case) the Obligor for whose
account such payment was made shall be deemed on the date of such payment to have received
the proceeds of a Utilisation. A Utilisation so deemed to be made shall, at the option of
the Agent, be deemed to be either a payment of the Outstanding Purchase Price or a Revolving
Loan and the other provisions of this Agreement (as to Purchase Commission, interest,
repayment and otherwise) shall apply to such Utilisation accordingly. The Agent may give
effect to the provisions of this Clause 6.6 even though this may cause any of the limits
referred to in this Clause 6 to be exceeded. If it can do so, the Agent shall allocate such
Utilisation in such manner as not to cause a Default.
	 
	7.	 	RECEIVABLES FINANCE
	 
	7.1	 	Sale of Receivables

	 	(a)	 	Each Borrower shall offer to sell all of its present and future
Receivables to the Agent by delivery to the Agent of the first Purchase
Request on the Business Day following the date on which the conditions
specified in Clause 4 (Initial Conditions Precedent) are first satisfied.
	 
	 	(b)	 	Each offer made by a Borrower to sell Receivables to the Agent made
pursuant to (a) above shall be deemed to be accepted by the Agent upon receipt
of the first Purchase Request from the Borrower concerned.
	 
	 	(c)	 	Acceptance of an offer of Receivables in accordance with (b) above
shall (without further act or document) suffice to constitute the assignment
of
all of the relevant Borrower’s present and future Receivables in favour of
the Agent.

22

 

	 	(d)	 	Each Borrower shall deliver to the Agent on behalf of the Lenders
duly completed Purchase Requests (which may be in physical form or via the
System) by no later than the fifth Business Day of each month (or more often
if requested to do so by the Agent) in order to enable the Agent to monitor
the Receivables which have been sold to the Lenders pursuant to (a) above.
	 
	 	(e)	 	Payment of the Purchase Price of any Receivables shall be made by the
Lenders against delivery of a Cash Request and in accordance with and subject
to the provisions of Clause 7.3 (Order of Application).
	 
	 	(f)	 	The Borrowers acknowledge that payments made by the account debtors
will flow through the Blocked Accounts and that they will receive credit for,
or payment in respect of, such Receivables in the manner and to the extent set
out in Clause 10.2 (Application from Blocked Accounts).

	7.2	 	Determination of Purchase Price
	 
	 	 	The Agent (acting reasonably and in accordance with the other provisions of this
Agreement) shall determine the Purchase Price for the Receivables specified in a Purchase
Request and will (upon determination thereof) advise the relevant Borrower of such
determination. For the avoidance of doubt the Agent shall not have the authority to
increase the Purchase Percentage.
	 
	7.3	 	Order of Application

	 	(a)	 	Any amounts paid by the Lenders pursuant to a Cash Request shall be
deemed to be applied (firstly) in the payment of any outstanding and unpaid
Purchase Price and (secondly) in the drawing of a Revolving Loan.
	 
	 	(b)	 	The Lenders’ obligation to pay the Purchase Price of any Receivable
(or any unpaid portion of it) shall terminate on the earlier of (i) the date
on which the relevant account debtor pays such Receivable and (ii) the
Maturity Date.
	 
	 	(c)	 	If a Borrower delivers a Cash Request in an amount which exceeds the
Total Availability attributable to the Borrower, then the Agent may in their
discretion nevertheless agree to make the requested Utilisation available. In
that event, the Agent shall impose an equivalent Reserve against other
Borrowers in such order and manner as it may reasonably see fit.
	 
	 	(d)	 	Where, as a result of the application of sub-clause (c) above, any
moneys paid by the Lenders to a Borrower (the “Debtor Company”) represent
payment of Purchase Price in relation to the Purchased Receivables of another
Obligor (the “Creditor Company”) then (without double counting with the
provisions of Clause 6.6 (Deemed Utilisations)) the Creditor Company shall be
deemed to have made an on-demand loan (an “Intercompany Loan”) to the Debtor
Company in an amount equal to
the amount of such payment by the Lenders. Nothing in this Clause 7.3(d)
shall derogate from or affect the Agent’s right to establish sub-limits or to
take any other action pursuant to Clause 6.4 (Adjustments).

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	8.	 	PROVISIONS CONCERNING L/CS
	 
	8.1	 	Delivery of L/C Requests.
	 
	 	 	No L/C Request may be delivered unless the form and content of the requested L/C has previously been approved by the
Agent.
	 
	8.2	 	Payment of L/Cs against demand.
	 
	 	 	A Borrower which requests the Agent to issue or to arrange the issue of an L/C:

	 	(a)	 	acknowledges that the Agent may at its option arrange for the issue
of such L/C through another institution selected by it and, in that event, (i)
such Borrower authorises the Agent to provide such counter-indemnities and
other undertakings as the issuing institution may reasonably require but on
terms no more onerous than the indemnities and other protections granted to
the Agent by this clause 8.2 and (ii) the indemnities and other protections
granted to the Agent pursuant to this Clause 8.2 shall apply equally to the
counter-indemnities and other undertakings so given by the Agent to the
issuing institution;
	 
	 	(b)	 	authorises the Agent and the Lenders to pay any claim made or
purported to be made under such L/C and which appears on the face of it to be
in order (a “claim”);
	 
	 	(c)	 	undertakes immediately and unconditionally on demand (i) to pay to
the Agent an amount equal to the amount of any claim and (ii) to indemnify the
Agent and the Lenders against any cost, loss or liability incurred by the
Agent or the Lenders in arranging for the issue of any L/C;
	 
	 	(d)	 	acknowledges that (i) the Agent is not obliged to carry out any
investigation or to seek any confirmation from such Borrower or any other
person before paying a claim, (ii) the Agent will deal in Documents only and
will thus not be concerned with any matters concerning any Goods or other
issues relating to the underlying transaction or underlying obligation (as the
case may be) and (iii) such Borrower will be bound by any action taken by the
Agent in good faith in relation to any L/C (including any decision to amend or
extend the L/C and any interpretation of the terms or effect of any L/C); and
	 
	 	(e)	 	acknowledges that its obligations of payment and reimbursement under
this Clause 8.2 will not be in any way prejudiced, affected or diminished by
(i) any unenforceability of, or amendment to or extension of, any L/C or any
other document or security, (ii) the validity, legitimacy or accuracy of any
document or claim submitted pursuant to any L/C or any action taken or omitted
with respect thereto or (iii) any other matter or thing which (but for this
provision) might otherwise have the effect of
diminishing or extinguishing the Borrower’s liability pursuant to this Clause
8.2.

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	8.3	 	Pledge
	 
	 	 	All Goods and Documents are hereby and shall upon despatch from the supplier of any
Goods be deemed to be pledged by the relevant Borrower to the Security Trustee and the Goods
and the proceeds of all insurances in relation to them and all sales of them and all of the
relevant Borrower’s rights as unpaid seller of them shall be a continuing security for the
payment and discharge in full of all of the obligations of the relevant Borrower under the
Finance Documents.
	 
	8.4	 	Perfection of Pledge
	 
	 	 	The Security Trustee shall be entitled at its option to obtain possession of the Goods
in order to perfect the pledge made by Clause 8.3 (Pledge). The relevant Borrower assigns
to the Security Trustee its right, title and interest in and to the Documents and all claims
and rights arising from them and the relevant Borrower irrevocably and unconditionally
authorises the Security Trustee to sign all documents and do all such other things as may be
necessary to obtain possession of and to realise the Goods, and to apply the proceeds in
reduction of amounts owing under this Agreement.
	 
	8.5	 	Trust Receipts
	 
	 	 	The Goods and the Documents shall only be released to the relevant Borrower by the
Agent against receipt by the Agent of a duly executed trust receipt from the relevant
Borrower in the Agent’s standard form at the time or (failing such execution) shall be
deemed to be subject to a trust receipt in such form.
	 
	8.6	 	Separation
	 
	 	 	Each Borrower undertakes to keep the Documents and the Goods separate and distinct from
any other bills of lading, documents of title or goods.
	 
	8.7	 	Lenders’ Indemnity
	 
	 	 	Each Lender shall (in the proportion which its Commitment bears to the Total
Commitments) immediately on demand indemnify the Agent against any loss, cost or liability
incurred by it in issuing or arranging any L/C.
	 
	9.	 	CURE RIGHTS
	 
	9.1	 	Cure Defaults
	 
	 	 	The Agent (acting in the name of and on behalf of, the relevant Obligor) may, at its
option and upon notice to the Company to that effect:

	 	(a)	 	cure any default by any Obligor under any agreement with respect to a
Receivable or under any other agreement with a third party as the Agent may
consider necessary to facilitate the collection of Receivables or to
facilitate access to any security under any of the Security Documents upon the
same becoming unenforceable;
	 
	 	(b)	 	make any payment, reach any settlement or compromise, issue, make or
pay any bond, appeal any judgment against an Obligor or take any other action
it may deem necessary to prevent any repossession, seizure,
execution, attachment or similar process against any plant, machinery or
other asset of an Obligor which might impair the security (or the enforcement
of any security) granted to the Security Trustee under any Security Document;
and

25

 

	 	(c)	 	discharge any Taxes and any other Security Interests from time to
time subsisting with respect to any asset of any Obligor.

	10.	 	REPAYMENT
	 
	10.1	 	Receivables Finance

	 	(a)	 	If the Agent determines that it has not received (in accordance with
Schedule 3 Part I paragraph 8) full payment in respect of a Purchased
Receivable on the applicable Maturity Date, then the relevant Borrower shall
on demand pay to the Agent an amount equal to the Outstanding Purchase Price
in respect of such Purchased Receivable.
	 
	 	(b)	 	Nothing in paragraph (a) above shall prevent the Agent from pursuing
payment in respect of the relevant Purchased Receivable from the account
debtor or from receiving payment of such Purchased Receivable to the credit of
a Blocked Account. Each Obligor shall render such assistance as the Agent may
reasonably require for that purpose.
	 
	 	(c)	 	The Agent may deduct from payments in respect of Purchased
Receivables made by account debtors or any of the Obligors into a Blocked
Account the then Outstanding Purchase Price in respect of such Purchased
Receivables. Any balance remaining after such deduction shall be applied in
accordance with Clause 10.2 (Application from Blocked Accounts).

	10.2	 	Application from Blocked Accounts
	 
	 	 	Subject to the other provisions of this Agreement, all amounts standing to the credit
of the Blocked Accounts shall be applied in the following order:

	 	(a)	 	in or towards payment of any Outstanding Purchase Price;
	 
	 	(b)	 	in repayment of the outstanding principal amount of any Loans in such
order and manner as the Agent may determine;
	 
	 	(c)	 	in payment of any fees, costs and expenses due from any Obligor to
the Agent under any Finance Document;
	 
	 	(d)	 	in payment of (i) all interest due on any Loans made or deemed to be
made under this Agreement and (ii) all Purchase Commission outstanding or
falling due for payment on the last Business Day of the then current month;
	 
	 	(e)	 	in or towards payment of any other amounts owing by any Obligor under
any Finance Document; and

26

 

	 	(f)	 	(by way of refund of amounts paid by account debtors in respect of
Receivables and which remain due to the relevant Borrower following the
application of paragraphs (a) — (e) above), in payment to the relevant
Borrower by credit to such Other Account as it may specify.

	10.3	 	Revision of Order of Application

	 	(a)	 	If an Event of Default is continuing, Clause 10.2 (Application from
Blocked Accounts) shall not apply and all amounts standing to the credit of a
Blocked Account shall be applied to the liabilities of the Obligors under the
Finance Documents in such order and manner as the Majority Lenders may
determine.
	 
	 	(b)	 	If any amount standing to the credit of one Borrower’s Blocked
Account is applied in discharge of the liabilities of another Obligor, then
such Obligor shall become indebted to the relevant Borrower on the basis set
out in Clause 7.3(d) (Order of Application) with necessary adaptations.

	10.4	 	Currencies
	 
	 	 	Where (i) any amount is held or is to be applied by the Agent in reduction of amounts
owing under this Agreement and (ii) the relevant amounts are denominated in different
currencies, the Agent may apply the amounts so held or to be applied in the purchase of the
latter currency at the Exchange Rate (including commissions). Alternatively, the Agent may
hold those funds pending receipt of the Company’s instructions.
	 
	10.5	 	Repayment of Term Loans

	 	(a)	 	The relevant Borrower shall repay the IP Loan in full on the Final
Repayment Date.
	 
	 	(b)	 	With effect from the Effective Date of the Second Amendment and
Restatement Agreement the Property Loan shall not be amortising and no
Borrower shall be required to make scheduled repayments of monthly
instalments. This provision does not alter any other provision of this
Agreement which may require a prepayment or repayment of the Property Loan
under any other circumstances. The relevant Borrower shall repay the Property
Loan in full on the Final Repayment Date.

	10.6	 	Repayments and Facility Limits

	 	(a)	 	The relevant Borrower shall from time to time on demand of the Agent
make such prepayments as may be necessary to ensure that the IP Loan at no
time exceeds 20 per cent of the then most recent IP Valuation.
	 
	 	(b)	 	The relevant Borrower shall from time to time on demand of the Agent
make such prepayments as may be necessary to ensure that the Property Loan at
no time exceeds 85 per cent of the Market Value set out in the then most
recent Property Valuation.
	 
	 	(c)	 	Any amounts repaid pursuant to (a) or (b) above shall be applied
against the relevant repayment instalments under Clause 10.5 (Repayment of
Term Loans) in reverse order of maturity.

27

 

	 	(d)	 	If at any time and for any reason (whether by reason of any
Receivables ceasing to be Eligible Receivables, any Stock ceasing to be
Eligible Stock, by reason of any fluctuation in the rate of exchange of any
currency as against sterling, whether affecting the Sterling Equivalent of any
outstanding Utilisations, the Sterling Equivalent value of any Receivable or
of any Stock or otherwise howsoever) any outstanding Utilisations cause any
Availability Limit to be exceeded, then the Company will immediately repay or
procure the repayment of such amounts (together with accrued interest on such
amounts) as may be necessary to remedy the position. If necessary for that
purpose, the Company shall also provide or procure the provision of cash cover
to the Agent in respect of any Outstanding Purchase Price and/or any
contingent obligations assumed by the Agent or the Lenders pursuant to this
Agreement.

	10.7	 	Final Repayment
	 
	 	 	On the Final Repayment Date, the Borrower will pay (or procure payment) to the Lenders:

	 	(a)	 	in full all outstanding amounts and unpaid liabilities under the
Finance Documents (whether by way of principal, interest, commission, fees,
costs, expenses or otherwise); and
	 
	 	(b)	 	such amount as is necessary to provide full cash collateral for any
Outstanding Purchase Price and any outstanding obligations (contingent or
otherwise) assumed by the Agent or a Lender pursuant to the terms of this
Agreement.

	10.8	 	Business Days
	 
	 	 	If any payment under any Finance Document would otherwise be due on a day which is not
a Business Day, it will be due on the next Business Day or (if that Business Day falls in
the following month) on the preceding Business Day.
	 
	10.9	 	Calculation of Interest
	 
	 	 	All interest, commitment fee and Purchase Commission under this Agreement shall be
calculated on the basis of actual days elapsed and a 365 day year (in the case of sterling)
or a 360 day year (in any other case). For the purposes of calculating interest and
Purchase Commission, any repayments received in respect of the Facilities concerned shall be
credited to the relevant Facility two Business Days following receipt by the Lender.
	 
	10.10	 	Cash Collateral
	 
	 	 	Any amount to be provided under this Agreement by way of cash collateral in respect of
any contingent liability shall stand charged to the Security Trustee by way of cash cover in
respect of such obligation and shall be held by the Security Trustee in a blocked interest
bearing account for application against such contingent liability. Withdrawals from such
account may only be made in order to pay amounts owing to the Security Trustee or a Lender
in respect of the liability concerned and (if so requested by the Security Trustee) the
relevant Borrower shall execute a charge over such account in such form as the Security
Trustee may require. After such liability has expired or has been
settled to the satisfaction of the Agent any remaining balance shall be applied (i) in
settlement of any other amounts then owing to the Agent or the Lenders under any Finance
Documents and (ii) in repayment to the Obligor which provided such cash collateral.

28

 

	11.	 	ILLEGALITY, PREPAYMENT AND CANCELLATION
	 
	11.1	 	Illegality
	 
	 	 	If after the date of this Agreement it becomes unlawful in any applicable jurisdiction
for a Lender to perform or maintain any of its obligations as contemplated by this Agreement
then:

	 	(a)	 	that Lender shall promptly notify the Agent upon becoming aware of
that event;
	 
	 	(b)	 	upon the Agent notifying the relevant Borrowers, the Commitment of
that Lender shall be immediately cancelled;
	 
	 	(c)	 	the Borrowers to which outstanding Utilisations have been made shall
upon demand (i) pay to that Lender all amounts then owing by them under this
Agreement (including any accrued interest, Purchase Commission, fees and other
amounts) and (ii) provide cash cover to that Lender in respect of all L/Cs or
other contingent obligations assumed at the request of that Borrower or in
respect of which that Lender is subject to a reimbursement obligation under
the terms of this Agreement.

	11.2	 	Mandatory Prepayment or Repayment

	 	(a)	 	Upon the occurrence of the sale or other disposal (including transfer
or lease) of any asset relating to either the IP Loan or the Property Loan the
Company shall ensure that the proceeds of such sale, disposal, transfer or
lease are applied in reduction of any outstanding Loans for the relevant
Facility. Upon such prepayment the IP Loan Facility Limit or the Property Loan
Facility Limit shall be reduced by the corresponding amount so prepaid and the
amount of the IP Loan Facility or the Property Loan Facility so reduced shall
be cancelled and shall not be available to be re-drawn or re-borrowed provided
that if any such proceeds of the sale, disposal, transfer or lease of any
assets when applied in reduction of any outstanding Loans result in either the
IP Loan or the Property Loan being reduced to zero and cancelled, the Company
shall be permitted to retain the balance of any such proceeds upon
confirmation by the Agent that the relevant Facility has been repaid in full
and cancelled.
	 
	 	(b)	 	Upon a UK Change of Control or an Ultimate Parent Change of Control
the Facilities will be cancelled and all outstanding Loans, together with
accrued interest, and all other amounts accrued under the Finance Documents,
shall become immediately due and payable.
	 
	 	(c)	 	In the event that the Company re-finances the whole of the Facility
it shall repay all amounts outstanding under the Finance Documents together
with accrued interest and the Facilities shall be reduced to zero and
cancelled.

29

 

	11.3	 	Voluntary Prepayment

	 	(a)	 	A Borrower to which a Revolving Loan has been made may, if it gives
to the Agent not less than 10 Business Day’s prior written notice, prepay the
whole or any part of that Loan (but, if in part, being an amount that reduces
the amount of any Revolving Loan by a minimum amount of £200,000).
	 
	 	(b)	 	A Borrower to which a Term Loan has been made may, if it gives to the
Agent not less than 10 Business Day’s prior written notice, prepay the whole
or any part of that Loan in multiples of £100,000. Any amount so prepaid may
not be re-drawn. The IP Loan Facility (in respect of prepayments of the IP
Loan) and the Property Loan Facility (in respect of prepayments of the
Property Loan) shall be cancelled by the amount of any such voluntary
prepayment. No prepayment and cancellation fee will be payable under clause
11.5 (Prepayment and Cancellation Fee) in respect of any such voluntary
prepayment.
	 
	 	(c)	 	Any amounts payable to an Obligor under an Overage Agreement
(“Overage Receipts”) are required to be paid into a Blocked Account and the
order of application set out in Clause 10.2 shall apply to such Overage
Receipts unless and to the extent that the relevant Obligor elects to make a
voluntary prepayment under this paragraph (c). An Obligor may, if it gives to
the Agent not less than 10 Business Day’s prior written notice, prepay the
whole or any part of a Revolving Loan, a Receivables Loan, the Property Loan
or the IP Loan in an amount equal to an Overage Receipt. Such prepayments may
be made on each occasion that an Obligor has an Overage Receipt. The IP Loan
Facility (in respect of prepayments of the IP Loan) and the Property Loan
Facility (in respect of prepayments of the Property Loan) shall be cancelled
by the amount of any such voluntary prepayment. No prepayment and
cancellation fee will be payable under clause 11.5 (Prepayment and
Cancellation Fee) in respect of any voluntary prepayment from an Overage
Receipt.

	11.4	 	Voluntary cancellation
	 
	 	 	The Company may, if it gives the Agent not less than 10 Business Days’ prior written
notice, cancel the whole or any part of a Facility whereupon such Facility shall be
cancelled to the extent stated in such notice. Any such cancellation shall reduce the
Commitments of the Lenders rateably. No cancellation notice may be given in respect of
amounts represented by outstanding Utilisations.

30

 

	11.5	 	Prepayment and Cancellation Fee
	 
	 	 	If the whole or any part of a Facility is pre-paid or cancelled as a result of (i) any
refinancing of any of the Facilities by any person and whether by way of debt or equity or
any combination of them or (ii) an Event of Default under Clause 22.6 (Insolvency
Proceedings) then and in each such case the relevant Borrower shall pay to the Lenders on
the effective date of such pre-payment or cancellation a pre-payment or cancellation fee
calculated as a percentage of the amount of the Facilities so prepaid or cancelled, as
follows (save that, subject always to Clause 11.4 (Voluntary Cancellation), in the case of
a partial pre-payment of any Term Loan the Facility Limit shall remain the same and only the
IP Loan Facility Limit or the Property Loan Facility Limit (as the case may be) shall
reduce):

	 	 	 
	(1) 

Number of Months 

from Effective Date of the Second 

Amendment and Restatement Agreement
	 	(2)

Applicable Percentage
	 	 	 
	0 — 12
	 	0.75 per cent
	 	 	 
	12 — Final Repayment Date
	 	zero

	11.6	 	Restrictions and conditions

	 	(a)	 	Any notice of cancellation or prepayment given pursuant to this
Clause 11 shall be irrevocable and, shall specify the date or dates upon which
the relevant cancellation or prepayment is to be made and the amount of that
cancellation or prepayment.
	 
	 	(b)	 	Any repayment or prepayment under this Agreement shall be made
together with accrued interest, Purchase Commission, and any other amounts
owing in respect of the amount repaid or prepaid.
	 
	 	(c)	 	No amount of any Facility which is cancelled may subsequently be
reinstated. Save as provided by Clause 5.4 (Reutilisation) no amount repaid
or prepaid may be redrawn.
	 
	 	(d)	 	The Borrowers shall not repay, prepay or cancel the Facilities or any
part of them except at the times and in the manner expressly provided for in
this Agreement.
	 
	 	(e)	 	If the Agent receives a notice under this Clause 11 it shall promptly
forward that to the relevant Lender.

	12.	 	INTEREST AND PURCHASE COMMISSION
	 
	12.1	 	Calculation of interest and Purchase Commission
	 
	 	 	The rate of interest on each Loan and the rate of Purchase Commission payable in
respect of the Outstanding Purchase Price for each Purchased Receivable shall be the
percentage rate per annum which is the aggregate of:

	 	(a)	 	the Margin;
	 
	 	(b)	 	the Bank of Ireland Base Rate; and
	 
	 	(c)	 	the Mandatory Cost.

	12.2	 	Payment of interest and Purchase Commission

	 	(a)	 	Each Borrower to which a Loan has been made shall pay accrued
interest on that Loan on the last Business Day of each month.

31

 

	 	(b)	 	Each Borrower which has sold a Receivable to the Agent shall on the
last Business Day of each month pay accrued Purchase Commission with respect
to the Purchase Price thereof calculated from the date on which the Purchase
Price was paid in response to the applicable Cash Request until the Actual
Date of Payment.

	12.3	 	Default interest
	 
	 	 	If an Event of Default has occurred and so long as the same is continuing, interest or
Purchase Commission (as the case may be) shall accrue on all amounts owing under the Finance
Documents at a rate which is two per cent. higher than the rate ascertained pursuant to
Clause 12.1 (Calculation of interest and Purchase Commission). Any interest or Purchase
Commission accruing under this Clause 12.3 shall be payable on demand and may be compounded
on such basis as the Agent deems appropriate.
	 
	13.	 	FEES
	 
	13.1	 	Commitment fee
	 
	 	 	The Company shall pay to the Agent on behalf of the Lenders in
respect of their Commitment a fee as set out in the Replacement
Fee Letter in relation to the daily undrawn/unutilised amount of
the Facility Limit. The accrued commitment fee is payable on the
last day of each calendar month which ends during the relevant
Availability Period, on the last day of the Availability Period
for the relevant Facility and, if cancelled in full, on the
effective date of such cancellation.
	 
	13.2	 	Arrangement fee
	 
	 	 	The Company shall pay to the Agent on the date of this Agreement an arrangement fee as
set out in the Replacement Fee Letter.
	 
	13.3	 	Monitoring Fee
	 
	 	 	The Company shall pay to the Agent a monitoring fee as set out in the Replacement Fee
Letter.
	 
	13.4	 	L/C Fee
	 
	 	 	Each Borrower shall pay to the Agent on behalf of the Lenders in respect of their
Commitment a fee as set out in the Replacement Fee Letter in relation to the face amount of
each L/C issued at the request of that Borrower in respect of the period from the date of
issue until the expiry of such L/C. Such fee shall be paid monthly in arrears and on the
Expiry Date of such L/C.
	 
	13.5	 	Amendment Fee
	 
	 	 	The Company shall pay the Agent a fee of £300,000 for the account of the Lenders on the
Effective Date of the Second Amendment and Restatement Agreement (the “Amendment Fee”).
	 
	14.	 	SET-OFF AND TAX GROSS UP
	 
	14.1	 	No Set-Off by Obligors
	 
	 	 	All payments to be made by an Obligor under the Finance Documents shall be calculated
and be made without (and free and clear of any deduction for) any set-off or counterclaim.

32

 

	14.2	 	Tax gross-up

	 	(a)	 	Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
	 
	 	(b)	 	The Company shall promptly upon becoming aware that an Obligor must
make a Tax Deduction (or that there is any change in the rate or the basis of
a Tax Deduction) notify the Agent accordingly.
	 
	 	(c)	 	If a Tax Deduction is required by law to be made by an Obligor, the
amount of the payment due from that Obligor 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.
	 
	 	(d)	 	If an Obligor is required to make a Tax Deduction, that Obligor shall
make that Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by law.
	 
	 	(e)	 	Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making that Tax
Deduction shall deliver to the Agent for the relevant Finance Party evidence
reasonably satisfactory to that Finance Party that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the relevant taxing
authority.

	14.3	 	Tax Indemnity

	 	(a)	 	The Company shall (within three Business Days of demand by the Agent)
pay to the relevant Finance Party an amount equal to the loss, liability or
cost which a Finance Party determines will be or has been (directly or
indirectly) suffered for or on account of Tax by that Finance Party in respect
of a Finance Document.
	 
	 	(b)	 	Paragraph (a) above shall not apply to any Tax assessed on a Finance
Party if that Tax is imposed on or calculated by reference to the net income
received or receivable (but not any sum deemed to be received or receivable)
by that Finance Party.

	14.4	 	Excluded Claims
	 
	 	 	If a Lender is not or ceases to be a Qualifying Lender, no Obligor shall be liable to
pay to the Agent under Clause 14.2 (Tax Gross-up) or 14.3 (Tax Indemnity) any amount in
respect of losses levied or imposed in excess of the amount that on Obligor would have been
obliged to pay if that Lender had been or had not ceased to be a Qualifying Lender save to
the extent that such increase is a result of a change in any law after the date hereof.
	 
	14.5	 	Tax Credit
	 
	 	 	If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

	 	(a)	 	a Tax Credit is attributable to that Tax Payment; and

33

 

	 	(b)	 	that Finance Party has obtained, utilised and retained that Tax
Credit,

	 	 	that Finance Party shall pay an amount to the Obligor which it determines will leave it
(after that payment) in the same after-Tax position as it would have been in had the Tax
Payment not been made by the Obligor. An Obligor may, upon reasonable written request,
require the Agent promptly to produce reasonable evidence as to whether or not the criteria
in this clause 14.5 are satisfied.
	 
	14.6	 	Stamp taxes
	 
	 	 	The Company shall pay and, within three Business Days of demand, indemnify each Finance
Party against any cost, loss or liability that Finance Party incurs in relation to all stamp
duty, registration and other similar Taxes payable in respect of or in order to register or
enforce any Finance Document.
	 
	14.7	 	Value added tax

	 	(a)	 	All consideration expressed to be payable under a Finance Document by
an Obligor to Finance Party shall be deemed to be exclusive of any VAT. If
VAT is chargeable on any supply made by that Finance Party to an Obligor in
connection with a Finance Document, that Obligor shall pay to that Finance
Party (in addition to and at the same time as paying the consideration) an
amount equal to the amount of the VAT and the Agent shall issue a VAT invoice
in respect of such amount to the extent that it is reasonably able to do so.
	 
	 	(b)	 	Where a Finance Document requires an Obligor to reimburse a Finance
Party for any costs or expenses, that Obligor shall also at the same time pay
and indemnify a Finance Party against all VAT incurred by the Agent in respect
of the costs or expenses to the extent that a Finance Party reasonably
determines that it is not entitled to credit or repayment of the VAT.

	15.	 	INCREASED COSTS
	 
	15.1	 	Increased costs

	 	(a)	 	Subject to Clause 15.3 (Exceptions) the Company shall, within three
Business Days of a demand by the Agent, pay for the account of a Finance Party
the amount of any Increased Costs incurred by that Finance Party or any of its
Affiliates as a result of (i) the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation in
each case which arises after the date hereof or (ii) compliance with any law
or regulation applicable to each Lender or its Affiliate made after the date
of this Agreement.
	 
	 	(b)	 	In this Agreement “Increased Costs” means:

	 	(i)	 	a reduction in the rate of return from the Facility or on a
Finance Party’s (or its Affiliate’s) overall capital;
	 
	 	(ii)	 	an additional or increased cost; or

34

 

	 	(iii)	 	a reduction of any amount due and payable under any Finance
Document,

	 	 	which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that
it is attributable to that Finance Party having entered into this Agreement or funding or
performing its obligations under any Finance Document.
	 
	15.2	 	Increased cost claims
	 
	 	 	If a Finance Party intends to make a claim pursuant to Clause
15.1 (Increased costs) it shall notify the Company and the Agent
of the event giving rise to the claim.
	 
	15.3	 	Exceptions
	 
	 	 	Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:

	 	(a)	 	attributable to a Tax Deduction required by law to be made by an
Obligor;
	 
	 	(b)	 	compensated for by Clause 14.3 (Tax indemnity) (or would have been
compensated for under Clause 14.3 (Tax indemnity) but was not so compensated
solely because the exclusion in paragraph (b) of Clause 14.3 (Tax indemnity)
applied);
	 
	 	(c)	 	compensated for by the payment of the Mandatory Cost; or
	 
	 	(d)	 	attributable to the wilful breach or default or negligence by a
Finance Party or its Affiliates of any law or regulation.

	16.	 	OTHER INDEMNITIES
	 
	16.1	 	Currency indemnity
	 
	 	 	If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order,
judgment or award given or made in relation to a Sum, has to be converted from the currency
(the “First Currency”) in which that Sum is payable into another currency (the “Second
Currency”) for the purpose of:

	 	(a)	 	making or filing a claim or proof against that Obligor;
	 
	 	(b)	 	obtaining or enforcing an order, judgment or award in relation to any
litigation or arbitration proceedings,

	 	 	that Obligor shall as an independent obligation, within three Business Days of demand,
indemnify the relevant Finance Party against (i) any cost, loss or liability arising out of
or as a result of the conversion including any discrepancy between (A) the rate of exchange
used to convert that Sum from the First Currency into the Second Currency and (B) the rate
or rates of exchange available to that person at the time of its receipt of that Sum and
(ii) the costs involved in effecting any such currency conversion.
	 
	16.2	 	Foreign Exchange Indemnity
	 
	 	 	Each Obligor agrees to assume all risks associated with any Forex Transaction entered
into at its request. Accordingly each Obligor shall on demand indemnify each Finance Party
against any cost, loss, liability or expense which a Finance Party may suffer or incur as a
result of or in connection with the conclusion, execution or performance of any Forex
Transaction.

35

 

	16.3	 	Other indemnities
	 
	 	 	The Company shall (or shall procure that an Obligor will), within three Business Days
of demand, indemnify each Finance Party against any cost, loss or liability (including loss
of Margin and redeployment costs) incurred by that Finance Party as a result of:

	 	(a)	 	the occurrence of any Event of Default;
	 
	 	(b)	 	a failure by an Obligor to pay any amount due under a Finance
Document on its due date;
	 
	 	(c)	 	funding, or making arrangements to fund, a Utilisation requested by a
Borrower in a Utilisation Request but not made by reason of the operation of
any one or more of the provisions of this Agreement; or
	 
	 	(d)	 	a Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment given by a Borrower or the Company.

	16.4	 	Indemnity to the Agent
	 
	 	 	The Company shall promptly indemnify the Agent against any cost, loss or liability
incurred by the Agent (acting reasonably) as a result of:

	 	(a)	 	investigating any event which it reasonably believes is a Default; or
	 
	 	(b)	 	acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately authorised.

	17.	 	COSTS AND EXPENSES
	 
	17.1	 	Transaction expenses
	 
	 	 	The Company shall on demand pay the Agent for the account of the Finance Parties the
amount of all costs and expenses (including legal and valuation fees) reasonably incurred by
it in connection with the negotiation, preparation, printing and execution of:

	 	(a)	 	this Agreement, the Second Amendment and Restatement Agreement and
any other documents referred to in this Agreement;
	 
	 	(b)	 	any other Finance Documents executed after the date of this
Agreement; and
	 
	 	(c)	 	any Property Valuation, any IP Valuation and any Appraisal delivered
pursuant to the terms of any Finance Document, if and to the extent to which
the Agent has paid, or has agreed with the valuer to pay, the costs thereof.

	17.2	 	Amendment costs
	 
	 	 	If an Obligor requests an amendment, waiver or consent, the Company shall, within three
Business Days of demand, reimburse the Agent for the account of the Finance Parties for the
amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in
responding to, evaluating, negotiating or complying with that request or requirement.

36

 

	17.3	 	Collection Costs
	 
	 	 	The Company shall on demand pay the Agent for the account of the Finance Parties the
amount of all costs and expenses (including legal fees) incurred by the Agent in connection
with:

	 	(a)	 	the remission of loan proceeds, collection of cheques and other
items, the issue, maintenance and renewal of L/Cs, establishing and
maintaining Charged Accounts, together with the Agent’s associated and
customary fees; and
	 
	 	(b)	 	all out of pocket expenses and costs from time to time (including
those incurred prior to the date of this Agreement) during the course of
periodic field examinations and appraisals of the Obligor’s assets and
operations plus a daily charge at the rate of £650 for the Agent’s
examinations in the field and office for up to four such specific field
examinations in any 12 month period prior to a Default and for any other or
additional such examinations following a default.

	17.4	 	Enforcement and other costs
	 
	 	 	The Company shall, within three Business Days of demand, pay to the Agent for the
account of the Finance Parties the amount of all costs and expenses (including legal fees)
incurred by any Finance Party in connection with the exercise or enforcement of, or the
preservation of any rights or discretions under, any Finance Document (including, without
limitation, any payments made to third parties in accordance with the terms of the Finance
Documents to preserve, protect or enhance any Security Interest granted to the Agent).
	 
	17.5	 	Stamp Duty on Transfers
	 
	 	 	No obligor shall be liable for any stamp duty payable in relation to any transfer of
any Loan or any part thereof from one to another Finance Party.
	 
	18.	 	GUARANTEE AND INDEMNITY
	 
	18.1	 	Guarantee and indemnity
	 
	 	 	Each Guarantor irrevocably and unconditionally jointly and severally:

	 	(a)	 	guarantees to each Finance Party punctual performance by each
Borrower of all that Borrower’s obligations under the Finance Documents;
	 
	 	(b)	 	undertakes with each Finance Party that whenever a Borrower does not
pay any amount when due under or in connection with any Finance Document, that
Guarantor shall immediately on demand pay that amount as if it was the
principal obligor; and
	 
	 	(c)	 	indemnifies each Finance Party immediately on demand against any
cost, loss or liability suffered by each Finance Party if any obligation
guaranteed by it is or becomes unenforceable, invalid or illegal. The amount
of the cost, loss or liability shall be equal to the amount which each Finance
Party would otherwise have been entitled to recover.

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	18.2	 	Continuing guarantee
	 
	 	 	This guarantee is a continuing guarantee and will extend to the ultimate balance of
sums payable by any Obligor under the Finance Documents, regardless of any intermediate
payment or discharge in whole or in part.
	 
	18.3	 	Reinstatement
	 
	 	 	If any payment by an Obligor or any discharge given by each Finance Party (whether in
respect of the obligations of any Obligor or any security for those obligations or
otherwise) is avoided or reduced as a result of insolvency or any similar event:

	 	(a)	 	the liability of each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
	 
	 	(b)	 	that Finance Party shall be entitled to recover the value or amount
of that security or payment from each Obligor, as if the payment, discharge,
avoidance or reduction had not occurred.

	18.4	 	Waiver of defences
	 
	 	 	The obligations of each Guarantor under this Clause 18 will not be affected by an act,
omission, matter or thing which, but for this Clause, would reduce, release or prejudice any
of its obligations under this Clause 18 (without limitation and whether or not known to it
or a Finance Party) including:

	 	(a)	 	any time, waiver or consent granted to, or composition with, any
Obligor or other person;
	 
	 	(b)	 	the release of any other Obligor or any other person under the terms
of any composition or arrangement with any creditor of any Obligor;
	 
	 	(c)	 	the taking, variation, compromise, exchange, renewal or release of,
or refusal or neglect to perfect, take up or enforce, any rights against, or
security over assets of, any Obligor or other person or any non-presentation
or non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;
	 
	 	(d)	 	any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any other
person;
	 
	 	(e)	 	any amendment (however fundamental) or replacement of a Finance
Document or any other document or security;
	 
	 	(f)	 	any unenforceability, illegality or invalidity of any obligation of
any person under any Finance Document or any other document or security; or
	 
	 	(g)	 	any insolvency or similar proceedings.

	18.5	 	Immediate recourse
	 
	 	 	Each Guarantor waives any right it may have of first requiring a Finance Party (or any
trustee or agent on its behalf) to proceed against or enforce any other rights or security
or
claim payment from any person before claiming from that Guarantor under this Clause 18.
This waiver applies irrespective of any law or any provision of a Finance Document to the
contrary.

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	18.6	 	Appropriations
	 
	 	 	Until all amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full, each Finance Party (or any
trustee or agent on its behalf) may:

	 	(a)	 	refrain from applying or enforcing any other moneys, security or
rights held or received by the agent (or any trustee or agent on its behalf)
in respect of those amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or otherwise) and no
Guarantor shall be entitled to the benefit of the same; and
	 
	 	(b)	 	hold in an interest-bearing suspense account any moneys received from
any Guarantor or on account of any Guarantor’s liability under this Clause 18.

	18.7	 	Deferral of Guarantors’ rights
	 
	 	 	Until all amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise
directs, no Guarantor will exercise any rights which it may have by reason of performance by
it of its obligations under the Finance Documents:

	 	(a)	 	to be indemnified by an Obligor;
	 
	 	(b)	 	to claim any contribution from any other guarantor of any Obligor’s
obligations under the Finance Documents; and/or
	 
	 	(c)	 	to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties under the
Finance Documents or of any other guarantee or security taken pursuant to, or
in connection with, the Finance Documents by any Finance Party.

	18.8	 	Additional security
	 
	 	 	This guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by any Finance Party.
	 
	19.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 	Each Obligor makes the representations and warranties set out in this Clause 19 to each
Finance Party on the date of this Agreement.
	 
	19.1	 	Status

	 	(a)	 	It is a corporation, duly incorporated and validly existing under the
law of its jurisdiction of incorporation.
	 
	 	(b)	 	It has the power to own its assets and carry on its business as it is
being conducted.

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	19.2	 	Binding obligations
	 
	 	 	The obligations expressed to be assumed by it in each Finance Document are legal,
valid, binding and enforceable obligations.
	 
	19.3	 	Non-conflict with other obligations
	 
	 	 	The entry into and performance by it of, and the transactions contemplated by, the
Finance Documents do not and will not conflict with:

	 	(a)	 	any law or regulation applicable to it;
	 
	 	(b)	 	its Constitutional Documents; or
	 
	 	(c)	 	any agreement or instrument binding upon it or any of its assets.

	19.4	 	Power and authority
	 
	 	 	It has the power to enter into, perform and deliver, and has taken all necessary action
to authorise its entry into, performance and delivery of, the Finance Documents to which it
is a party and the transactions contemplated by those Finance Documents.
	 
	19.5	 	Validity and admissibility in evidence
	 
	 	 	All Authorisations required or desirable:

	 	(a)	 	to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party; and
	 
	 	(b)	 	to make the Finance Documents to which it is a party admissible in
evidence in its jurisdiction of incorporation,

	 	 	have been obtained or effected and are in full force and effect.
	 
	19.6	 	No filing or stamp taxes
	 
	 	 	Under the law of its jurisdiction of incorporation it is not necessary that the Finance
Documents be filed, recorded or enrolled with any court or other authority in that
jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the
Finance Documents or the transactions contemplated by the Finance Documents.
	 
	19.7	 	No default

	 	(a)	 	No Event of Default is continuing or might reasonably be expected to
result from the making of any Utilisation.
	 
	 	(b)	 	No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it or any
of its Affiliates or to which its (or its Affiliates’) assets are subject
which might have a Material Adverse Effect.

	19.8	 	No misleading information

	 	(a)	 	Any information provided by the Company or any of its Affiliates (i)
in connection with the negotiation of the Facilities and the Finance Documents
and (ii) in connection with any valuations or reports required to be prepared
for the purposes of this Agreement was (in each case) true and accurate in all
material respects as at the date it was provided or as at the date (if any) at
which it is stated.

40

 

	 	(b)	 	Nothing has occurred since the date on which such information was
provided which would render it untrue or misleading as at the date it was
provided or as at the date at which it is stated in any material respect.

	19.9	 	Financial statements

	 	(a)	 	Its latest audited financial statements were prepared in accordance
with GAAP consistently applied.
	 
	 	(b)	 	Its latest audited financial statements fairly represent its
financial condition and operations (consolidated in the case of the Company)
during the relevant financial year.
	 
	 	(c)	 	There has been no material adverse change in its business or
financial condition (consolidated in the case of the Company) since the date
to which its latest audited financial statements were made up.

	19.10	 	Pari passu ranking
	 
	 	 	Its payment obligations under the Finance Documents rank at least pari passu with the
claims of all its other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
	 
	19.11	 	No proceedings pending or threatened
	 
	 	 	No litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency which, if adversely determined, might reasonably be expected to have
a Material Adverse Effect have (to the best of its knowledge and belief) been started or
threatened against it or any of its Affiliates.
	 
	19.12	 	Retention of Title
	 
	 	 	Any list provided to the Agent prior to the date of this Agreement and which provides
details of those suppliers whose terms of business include retention of title provisions is
complete and accurate in all material respects and (apart from those named in any such
list), there are no suppliers which impose such provisions.
	 
	19.13	 	Bank Accounts
	 
	 	 	All the accounts maintained or used by any Obligor at any bank or financial institution
have been included within the definition of Charged Accounts.
	 
	19.14	 	Dormant Subsidiaries
	 
	 	 	Each of the companies listed as a Dormant Subsidiary has not traded in the last
financial year.
	 
	19.15	 	Repetition
	 
	 	 	The representations and warranties in this Clause 19 (other than those set out in
Clause 19.6 (No filings or stamp duty) (the “Repeating Representations”) are deemed to be
made by each Obligor by reference to the facts and circumstances then existing on the date
of each Utilisation Request and on each Utilisation Date.

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	20.	 	INFORMATION AND FINANCIAL UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 20 remain in force from the date of this Agreement for
so long as any amount is outstanding under the Finance Documents or any Facility remains
available for utilisation.
	 
	20.1	 	Notification of default
	 
	 	 	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.
	 
	20.2	 	Reporting and Financial Undertakings

	 	(a)	 	Each Obligor will comply with each of the undertakings set out in
Schedule 3 (Reporting and Financial Undertakings).
	 
	 	(b)	 	Upon the accession of any Additional Obligor each Obligor will comply
with the Additional Reporting and Financial Undertakings for an Additional
Obligor as set out in Schedule 3 Part II (Additional Reporting and Financial
Undertakings from Additional Obligors).

	21.	 	GENERAL UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 21 remain in force from the date of this Agreement for
so long as any amount is outstanding under the Finance Documents or any Facility remains
available for utilisation.
	 
	21.1	 	Authorisations
	 
	 	 	Each Obligor shall promptly:

	 	(a)	 	obtain, comply with and do all that is necessary to maintain in full
force and effect; and
	 
	 	(b)	 	supply certified copies to the Agent of,

	 	 	any Authorisation required under any law or regulation of its jurisdiction of incorporation
to enable it to perform its obligations under the Finance Documents and to ensure the
legality, validity, enforceability or admissibility in evidence in its jurisdiction of
incorporation of any Finance Document.
	 
	21.2	 	Compliance with laws
	 
	 	 	Each Obligor shall comply in all respects with all laws to which it may be subject, if
failure so to comply would materially impair its ability to perform its obligations under
the Finance Documents.
	 
	21.3	 	Negative pledge

	 	(a)	 	No Obligor shall create or permit to subsist any Security Interest
(other than a Permitted Security Interest) over any of its assets.
	 
	 	(b)	 	No Obligor shall:

	 	(i)	 	sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by an Obligor;

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	 	(ii)	 	enter into any arrangement under which money or the benefit of
a bank or other account may be applied, set-off or made subject to a
combination of accounts; or
	 
	 	(iii)	 	enter into any other preferential arrangement having a similar
effect,

	 	 	in circumstances where the arrangement or transaction is entered into primarily as a
method of raising Financial Indebtedness or of financing the acquisition of an asset.
	 
	21.4	 	Disposals

	 	(a)	 	No Obligor shall enter into a single transaction or a series of
transactions (whether related or not) and whether voluntary or involuntary to
sell, lease, transfer or otherwise dispose of any asset.
	 
	 	(b)	 	Paragraph (a) above does not apply to any sale, lease, transfer or
other disposal:

	 	(i)	 	that is a Permitted Disposal;
	 
	 	(ii)	 	relating to the disposal of Stock and made in the ordinary
course of business;
	 
	 	(iii)	 	of assets in exchange for other assets comparable or superior
as to type, value and quality;
	 
	 	(iv)	 	relating to the application of cash in the acquisition of goods
and services in the ordinary course of trading and in a manner
consistent with the Finance Documents;
	 
	 	(v)	 	relating to the disposal of obsolete assets where any proceeds
of sale are paid into a Blocked Account;
	 
	 	(vi)	 	relating to any disposal of any asset (other than Eligible
Equipment) where the higher of the market value or consideration
receivable (when aggregated with the higher of the market value or
consideration receivable for any other sale, lease, transfer or other
disposal, other than any permitted under paragraphs (i) to (iii) above)
does not exceed £100,000 (or its equivalent in another currency or
currencies) in any financial year and the proceeds are paid into a
Blocked Account;
	 
	 	(vii)	 	relating to the transfer of shares or other ownership
interests in the Company or an Original Borrower by a member of the
Group to another member of the Group;
	 
	 	(viii)	 	that is made on an intra-Group basis to another Obligor; or
	 
	 	(ix)	 	which has been approved in writing by the Majority Lenders.

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	21.5	 	Mergers and Acquisitions

	 	(a)	 	No Obligor shall enter into any amalgamation, demerger, merger or
corporate reconstruction or acquire any business, undertaking or (except in
the ordinary course of business) other assets of any kind (other than as part
of a reconstruction, amalgamation or reorganisation on terms previously agreed
with the Majority Lenders).
	 
	 	(b)	 	Paragraph (a) above does not apply to any amalgamation, demerger,
merger, striking off or corporate reconstruction of any Dormant Subsidiary
carried out as part of an administrative reorganisation of the Group carried
out with the consent of the Agent, such consent not to be unreasonably
withheld or delayed.

	21.6	 	Change of business
	 
	 	 	The Company shall procure that no substantial change is made to the general nature of
the business of the Company or any Obligor from that carried on at the date of this
Agreement.
	 
	21.7	 	Intra-Group Arrangements

	 	(a)	 	No Obligor will, without obtaining the Agent’s prior written consent:

	 	(i)	 	pay any dividend or make any other distribution of any of its
assets to its shareholders or any of them other than in respect of AMAP
Disposal Proceeds; or
	 
	 	(ii)	 	pay any other moneys, whether by way of interest, management
fees or otherwise howsoever, to any Affiliate, Subsidiary (including any
Dormant Subsidiary) or any shareholder, director or employee except for
payments in the ordinary course of, and pursuant to the reasonable
requirements of, trading and on arms length commercial terms; or
	 
	 	(iii)	 	redeem any of its ordinary or preference share capital.

	 	(b)	 	Notwithstanding the foregoing provisions of this Clause 21.7, the
Company may pay the Marketing Re-Charge.
	 
	 	(c)	 	The Parties agree that if royalties are at customary and reasonable
commercial rates and they comply with the other requirements of paragraph
(a)(ii) above then they may be paid intra-Group.

	21.8	 	Financial Indebtedness
	 
	 	 	No Obligor will incur any Financial Indebtedness other than:

	 	(a)	 	under the Finance Documents;
	 
	 	(b)	 	normal trade credit granted to it in the ordinary course of business;

44

 

	 	(c)	 	equipment, vehicle and operating leases and hire purchase
transactions entered into in the ordinary course of business where the total
annual Financial Indebtedness for such leases and transactions for the Obligors as a
whole does not exceed £500,000 at any one time;
	 
	 	(d)	 	the Wombourne Sale and Leaseback;
	 
	 	(e)	 	with respect to loans made to it by another Obligor which is a
Chargor under the Debenture and loans permitted pursuant to paragraph (c) of
Clause 21.9 (Making Loans); or
	 
	 	(f)	 	Financial Indebtedness is incurred in the ordinary course of, and
pursuant to the reasonable requirements of, trading and on arms’ length
commercial terms in connection with the Group’s trade payables or the Group’s
Hong Kong sourcing operations.

	21.9	 	Making Loans
	 
	 	 	No Obligor will be a creditor with respect to any Financial Indebtedness except for:

	 	(a)	 	the grant of normal trade credit in the ordinary course of its trade;
	 
	 	(b)	 	loans made by it to another Obligor which is a Chargor under the
Debenture;
	 
	 	(c)	 	from the date of this Agreement for a period of twelve months
Existing Inter-Company Loans PLUS Year 1 Additional Inter Company Loans; and
	 
	 	(d)	 	after the expiry of twelve months from the date of this Agreement an
Obligor shall be permitted to incur an increase in the amount of Existing
Inter-Company Loans and the Additional Inter Company Loans by an amount not
greater than Net Trading Cashflow minus Fixed Charge for the immediately
preceding 12 month period.

Any amounts referred to in (d) above shall be adjusted to reflect any Stock that is
considered for Utilisations made in relation to Stock in European Jurisdictions
where a European Sales Entity has satisfied the conditions of Schedule 2 part II
(Additional Conditions Precedent for Lending in Relation to Stock in European
Jurisdictions).

	21.10	 	Bank Accounts
	 
	 	 	No Obligor will open or maintain any account of any type with
any bank or financial institution providing like services other
than the Charged Accounts.
	 
	21.11	 	Insurance
	 
	 	 	Each Obligor will:

	 	(a)	 	as regards all its assets and property of any kind (i) arrange and
maintain in full force and effect insurances (including consequential loss,
business interruption and public liability and damage and other insurances
usually maintained by companies carrying on the same type of business under
similar circumstances and generally available in the market) in such amounts,
on such terms and with such insurers as the Agent may approve
and (ii) arrange and maintain such further and other insurances as the Agent
may reasonably request;

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	 	(b)	 	procure that the Agent’s interest is noted on the following policies:
(i) RKK 270407 held with Royal and Sun Alliance, (ii) NK/14465575 held with
Allianz Cornhill Engineering and (iii) 2002/5/000002493 held with CAN Maritime
Insurance Company Limited in such manner as the Agent may in its absolute
discretion require and will use all reasonable endeavours to ensure that the
Agent is named as sole loss payee (but without having any obligation for
premiums);
	 
	 	(c)	 	ensure that every policy of insurance contains a standard mortgagee
clause, whereby such insurance will not be invalidated, vitiated or avoided as
against a mortgagee (or such other terms as the Agent may agree);
	 
	 	(d)	 	supply to the Agent copies of all such policies of insurance and all
endorsements and renewals of such policies, together with receipts for
premiums;
	 
	 	(e)	 	duly and punctually pay all premiums in respect of its insurances and
not do or omit to do any act, matter or thing whereby any such insurance may
be or becomes void or voidable at the option of the insurers or settle any
claim in respect of those insurances except for claims not exceeding £5,000
without the prior written consent of the Agent, such consent not to be
unreasonably withheld or delayed;
	 
	 	(f)	 	comply with, enforce and not waive, release, terminate or vary (or
agree so to do) any material obligations arising under all policies of
insurance and in particular, but without limitation, it shall notify the Agent
immediately upon receiving notice from any insurer that the details of any
insurance policy are to change in any way and upon receiving notice from any
insurer terminating any insurance policies;
	 
	 	(g)	 	in the event that it receives from any insurer notice that such
insurer is terminating any insurance policy, it shall use all reasonable
endeavours to enter into a corresponding policy with an insurer approved by
the Agent and procure that such steps are taken as may be necessary to ensure
that such policy complies in all respects with the terms of this Agreement;
and
	 
	 	(h)	 	immediately give notice to the Agent of any occurrence which gives
rise, or might give rise, to a single claim exceeding £50,000 under any policy
of insurance.

If any Obligor at any time fails to perform any of its obligations contained in this
Clause, 21.11 the Agent may effect or renew such insurance as it thinks fit and such
Obligor shall reimburse the Agent for the costs thereby incurred on demand.

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	21.12	 	Financial Year End/Change of Auditors
	 
	 	 	No Obligor will alter its financial year end or replace its auditors without (in each
case) the prior written consent of the Agent unless such another is ranked in the top ten of
auditors as determined by the Society of Chartered Accountants.
	 
	21.13	 	Taxes
	 
	 	 	Each Obligor will promptly pay all Taxes as and when they fall due (except where the
Agent agrees that any relevant amounts are subject to a bona fide dispute).
	 
	21.14	 	Change of Name
	 
	 	 	No Obligor will change its name without giving the Agent 30 days’ prior written notice
of the proposed new name and will supply a copy of the relevant certificate of incorporation
on change of name to the Agent as soon as it becomes available.
	 
	21.15	 	Realisation of Credit Terms
	 
	 	 	Each Obligor shall in a timely manner collect and pursue the collection of all
Receivables owing to it by all account debtors and shall ensure that such sums are paid into
the relevant Blocked Account in accordance with the terms of Schedule 3 Part I paragraph 9
(Reporting and Financial Undertakings).
	 
	21.16	 	Comala
	 
	 	 	The Company shall use all reasonable endeavours to ensure that within 180 days after
the Effective Date of the Second Amendment and Restatement Agreement each Obligor shall have
completed all forms and procedures necessary for the use of the System by the Obligors to
deliver Utilisation Requests and other information required to be delivered to the Agent
under this Agreement.
	 
	22.	 	EVENTS OF DEFAULT
	 
	 	 	Each of the events or circumstances set out in this Clause 22 is an Event of Default.

	 
	22.1	 	Non-payment
	 
	 	 	An Obligor does not pay on the due date any amount payable pursuant to a Finance
Document at the place at and in the currency in which it is expressed to be payable unless
(i) its failure to pay is caused by administrative or technical or other manifest error (not
attributable to an Obligor) and (ii) payment is made within two Business Days of its due
date.
	 
	22.2	 	Other obligations

	 	(a)	 	An Obligor does not comply with the provisions of Clauses 21.3
(Negative Pledge), 21.4 (Disposals), 21.8 (Financial Indebtedness), 21.9
(Making Loans), 21.11 (Insurance) or any of the undertakings set out in
Schedule 3 Parts I and II (as applicable) (Reporting and Financial
Undertakings) and where such non-compliance if capable of remedy, such Obligor
fails to remedy the same within five Business Days thereof; or
	 
	 	(b)	 	An Obligor does not comply with any other provision of the Finance
Documents and, where such non-compliance is capable of remedy, such Obligor
fails to remedy same within ten Business Days of becoming aware thereof.

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	22.3	 	Misrepresentation
	 
	 	 	Any representation, warranty or statement made or deemed to be made by an Obligor in
the Finance Documents or any other document delivered by or on behalf of any Obligor under
or in connection with any Finance Document is or proves to have been incorrect or misleading
in any material respect when made or deemed to be made.
	 
	22.4	 	Cross default

	 	(a)	 	Any Financial Indebtedness of any Obligor (other than Financial
Indebtedness of an Obligor to Salton Hong Kong Limited) exceeding £100,000 (or
its equivalent in other currencies) in the aggregate is not paid when due and
such sum is not to be challenged by the Obligor with a bona fide claim.
	 
	 	(b)	 	An event of default (however described) occurs under any document
relating to Financial Indebtedness of any Obligor exceeding £50,000 (or its
equivalent in other currencies).
	 
	 	(c)	 	Any Security Interest with respect to any Financial Indebtedness of
any Obligor becomes enforceable.
	 
	 	(d)	 	An amount in excess of £1,000,000 in aggregate owed to trade
creditors of any Obligor (other than Salton Hong Kong Limited) remains
outstanding following the expiry of any customary trade credit period and such
sum is not to be challenged by the Obligor with a bona fide claim.

	22.5	 	Insolvency

	 	(a)	 	An Obligor is unable or admits inability to pay its debts as they
fall due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or more
of its creditors with a view to rescheduling any of its indebtedness.
	 
	 	(b)	 	The value of the assets of any Obligor is less than its liabilities
(taking into account contingent and prospective liabilities).
	 
	 	(c)	 	A moratorium is declared in respect of any indebtedness of any
Obligor.

	22.6	 	Insolvency proceedings
	 
	 	 	Any corporate action, legal proceedings or other procedure or step is taken in relation
to:

	 	(a)	 	the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of any Obligor;
	 
	 	(b)	 	a composition, compromise, assignment or arrangement with any
creditor of any Obligor;
	 
	 	(c)	 	the appointment of a liquidator, receiver, administrative receiver,
administrator compulsory manager or other similar officer in respect of any
Obligor or any of its assets; or

48

 

	 	(d)	 	enforcement of any Security Interest over any assets of any Obligor,
or any analogous procedure or step is taken in any jurisdiction,

other than a members voluntary winding up or striking off of a Dormant Subsidiary carried
out with the prior written consent of the Agent (such consent not to be unreasonably
withheld or delayed).

	22.7	 	Cessation of Business
	 
	 	 	Any Obligor ceases or threatens to cease, to carry on all or a substantial part of its
business.
	 
	22.8	 	Creditors’ process
	 
	 	 	Any expropriation, attachment, sequestration, distress or execution affects any asset
of any Obligor and is not discharged within 10 Business Days.
	 
	22.9	 	Charged Account Arrangements
	 
	 	 	Any bank repudiates or purports to terminate the arrangements set out in the Debenture
in relation to any Charged Account or a cash-sweep or payment required to be made under any
Finance Document from a Charged Account is not made in the amount and manner required other
than as a result of administrative error which is remedied within 2 Business Days of
becoming aware thereof.
	 
	22.10	 	Material adverse change
	 
	 	 	An event or series of events occurs which, in the reasonable opinion of the Majority
Lenders, could be reasonably expected to have a Material Adverse Effect.
	 
	22.11	 	Acceleration
	 
	 	 	On and at any time after the occurrence of an Event of Default which is continuing the
Agent may, by notice to the Company:

	 	(a)	 	declare that an Event of Default has occurred; and/or
	 
	 	(b)	 	cancel the Facilities whereupon they shall immediately be cancelled;
and/or
	 
	 	(c)	 	declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued or outstanding under the Finance
Documents be immediately due and payable, whereupon they shall become
immediately due and payable; and/or
	 
	 	(d)	 	declare that all or part of the Loans be payable on demand, whereupon
they shall immediately become payable on demand by the Lenders; and/or
	 
	 	(e)	 	declare that the Company shall immediately pay or procure the payment
of cash cover in respect of the Outstanding Purchase Price, the L/Cs and the
Forex Transactions, whereupon such amounts shall become immediately due and
payable. The provisions of Clause 10.10 (Cash collateral) shall apply to any
cash cover to be provided under this Clause 22.11(e).

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	22.12	 	Agent’s Rights following Default
	 
	 	 	Without prejudice to the other provisions of this Clause 22 or any of its other rights
under any Finance Documents, the Agent may, at any time while a Default is continuing (and
without incurring any liability for the exercise or non-exercise of any such power):

	 	(a)	 	require each Obligor immediately to deliver to it all original
documents relating to the Receivables and the contracts giving rise to them;
and/or
	 
	 	(b)	 	give notice (or require the relevant Obligors to give notice) to the
account debtors to the effect that the Receivables have been assigned to the
Agent and requiring that payment be made to such account as the Agent may
specify; and/or
	 
	 	(c)	 	extend the time for payment of any Receivable or otherwise enter into
any arrangements for the settlement, compromise, release or discharge of any
receivable; and/or
	 
	 	(d)	 	generally take such action as it may deem fit for the protection of
any rights, remedies or security conferred upon it by any of the Finance
Documents.

	23.	 	CHANGES TO THE LENDERS
	 
	23.1	 	Assignments and transfers by the Lenders
	 
	 	 	The consent of the Company is required for (i) an assignment or transfer by an Original
Lender (unless such transfer is to an Affiliate of such Lender) resulting in more than two
Lenders existing at any time under this Agreement and (ii) an assignment or transfer by
Burdale Financial Limited (unless such transfer is to an Affiliate of Burdale Financial
Limited) (such consent not to be unreasonably withheld or delayed) provided that no such
consent is required following the occurrence of any Default which is continuing.
	 
	24.	 	CHANGES TO THE OBLIGORS
	 
	24.1	 	Assignments and transfer by Obligors
	 
	 	 	No Obligor may assign any of its rights or transfer any of its rights or obligations
under the Finance Documents.
	 
	24.2	 	Additional Borrowers
	 
	 	 	The Company may request that any of its Subsidiaries becomes an Additional Borrower.
That Subsidiary shall become an Additional Borrower if:

	 	(a)	 	the Agent approves the addition of that Subsidiary;
	 
	 	(b)	 	the Company delivers to the Agent a duly completed and executed
Accession Letter and Deed of Accession;
	 
	 	(c)	 	the Company confirms that no Default is continuing or would occur as
a result of that Subsidiary becoming an Additional Borrower; and

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	 	(d)	 	the Agent has received with respect to the Additional Borrower,
documentation corresponding to that listed in paragraphs (A) and (B) of
Schedule 2 Part I (Initial Conditions precedent) in relation to that
Additional Borrower, together with the additional conditions listed in
Schedule 2 Part II (Additional Conditions Precedent for Lending in Relation
to Stock in European Jurisdictions) each in form and substance satisfactory
to the Agent.

	24.3	 	Acknowledgement and Authorisation by Obligors

	 	(a)	 	Without limiting the other provisions of this Clause 24, the Obligors
acknowledge that any Subsidiary which becomes an Additional Borrower will
become bound by, and entitled to the benefit of all provisions of this
Agreement applicable as between the Obligors themselves (including, without
limitation, Clause 7.3(d) (Order of Application)) and 10.3(b) (Revision of
Order of Application).
	 
	 	(b)	 	Each Obligor irrevocably authorises the Company to execute any Letter
of Accession and Deed of Accession on its behalf and without further reference
to it.

	24.4	 	Additional Guarantors
	 
	 	 	The Company shall procure that each of its Subsidiaries is a
Guarantor. If any company becomes a Subsidiary after the date
of this Agreement, the Company shall procure that such
Subsidiary becomes an Additional Guarantor by delivering to the
Agent:

	 	(a)	 	a duly completed and executed Accession Letter and Deed of Accession;
and
	 
	 	(b)	 	all of the corresponding documents and other evidence listed in
paragraphs (A) and (B) of Schedule 2 Part I (Initial Conditions precedent) in
relation to that Additional Guarantor each in form and substance satisfactory
to the Agent.

	24.5	 	Repetition of Representations
	 
	 	 	Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary
that the representations and warranties contained in Clause 19 (Representations and
Warranties) are true and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances existing at the time of such delivery.
	 
	24.6	 	Resignation of Obligors
	 
	 	 	If an Obligor which is a Dormant Company is resigning in accordance with a consent
given by the Agent in accordance with either Clause 21.5(b) or Clause 22.6 (Insolvency
Proceedings) of this Agreement then such Obligor shall deliver a resignation letter
substantially in the form set out in Part 2 of Schedule 5. The resignation shall only be
effective when the Agent acknowledges receipt of a duly completed satisfactory resignation
letter.
	 
	25.	 	ROLE OF THE AGENT
	 
	25.1	 	Appointment of the Agent

	 	(a)	 	Each other Finance Party appoints the Agent to act as its agent under
and in connection with the Finance Documents.

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	 	(b)	 	Each other Finance Party authorises the Agent to exercise the rights,
powers, authorities and discretions specifically given to the Agent under or
in connection with the Finance Documents together with any other incidental
rights, powers, authorities and discretions.

	25.2	 	Duties of the Agent

	 	(a)	 	The Agent shall promptly forward to a Party the original or a copy of
any document which is delivered to the Agent for that Party by any other
Party.
	 
	 	(b)	 	Except where a Finance Document specifically provides otherwise, the
Agent is not obliged to review or check the adequacy, accuracy or completeness
of any document it forwards to another Party.
	 
	 	(c)	 	If the Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance described is
a Default, it shall promptly notify the Finance Parties.
	 
	 	(d)	 	If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party (other than the Agent
or the Arranger) under this Agreement it shall promptly notify the other
Finance Parties.
	 
	 	(e)	 	The Agent’s duties under the Finance Documents are solely mechanical
and administrative in nature.

	25.3	 	No fiduciary duties

	 	(a)	 	Nothing in this Agreement constitutes the Agent as a trustee or
fiduciary of any other person.
	 
	 	(b)	 	The Agent shall not be bound to account to any Lender for any sum or
the profit element of any sum received by it for its own account.

	25.4	 	Business with the Obligors/Borrowers
	 
	 	 	The Agent may accept deposits from, lend money to and generally engage in any kind of
banking or other business with the Obligors or any of its Affiliates.
	 
	25.5	 	Rights and discretions of the Agent

	 	(a)	 	The Agent may rely on:

	 	(i)	 	any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
	 
	 	(ii)	 	any statement made by a director, authorised signatory or
employee of any person regarding any matters which may reasonably be
assumed to be within his knowledge or within his power to verify.

	 	(b)	 	The Agent may assume (unless it has received notice to the contrary
in its capacity as agent for the Lenders) that:

	 	(i)	 	no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 22.1 (Non-payment));

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	 	(ii)	 	any right, power, authority or discretion vested in any Party
or the Majority Lenders has not been exercised; and
	 
	 	(iii)	 	any notice or request made by the Company (other than a
Utilisation Request or Selection Notice) is made on behalf of and with
the consent and knowledge of all the Obligors.

	 	(c)	 	The Agent may engage, pay for and rely on the advice or services of
any lawyers, accountants, surveyors or other experts.
	 
	 	(d)	 	The Agent may act in relation to the Finance Documents through its
personnel and agents.
	 
	 	(e)	 	The Agent may disclose to any other Party any information it
reasonably believes it has received as agent under this Agreement.
	 
	 	(f)	 	Notwithstanding any other provision of any Finance Document to the
contrary, the Agent is not obliged to do or omit to do anything if it would or
might in its reasonable opinion constitute a breach of any law or regulation
or a breach of a fiduciary duty or duty of confidentiality.

	25.6	 	Majority Lenders’ instructions

	 	(a)	 	Unless a contrary indication appears in a Finance Document, the Agent
shall (i) exercise any right, power, authority or discretion vested in it as
Agent in accordance with any instructions given to it by the Majority Lenders
(or, if so instructed by the Majority Lenders, refrain from exercising any
right, power, authority or discretion vested in it as Agent) and (ii) not be
liable for any act (or omission) if it acts (or refrains from taking any
action) in accordance with an instruction of the Majority Lenders.
	 
	 	(b)	 	Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the Finance
Parties.
	 
	 	(c)	 	In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from taking action) as
it considers to be in the best interest of the Lenders.
	 
	 	(d)	 	The Agent is not authorised to act on behalf of a Lender (without
first obtaining that Lender’s consent) in any legal or arbitration proceedings
relating to any Finance Document.

	25.7	 	Responsibility for documentation
	 
	 	 	The Agent:

	 	(a)	 	is not responsible for the adequacy, accuracy and/or completeness of
any information (whether oral or written) supplied by the Agent, or an Obligor
or any other person given in or in connection with any Finance Document; or

53

 

	 	(b)	 	is not responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any other agreement,
arrangement or document entered into, made or executed in anticipation of or
in connection with any Finance Document.

	25.8	 	Exclusion of liability

	 	(a)	 	Without limiting paragraph (b) below for any action taken by it under
or in connection with any Finance Document, unless directly caused by its
gross negligence or wilful misconduct.
	 
	 	(b)	 	No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent in respect of any claim it might have
against the Agent or in respect of any act or omission of any kind by that
officer, employee or agent in relation to any Finance Document and any
officer, employee or agent of the Agent may rely on this Clause.
	 
	 	(c)	 	The Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under the
Finance Documents to be paid by the Agent if the Agent has taken all necessary
steps as soon as reasonably practicable to comply with the regulations or
operating procedures of any recognised clearing or settlement system used by
the Agent for that purpose.
	 
	 	(d)	 	Nothing in this Agreement shall oblige the Agent to carry out any
“know your customer” or other checks in relation to any person on behalf of
any Lender and each Lender confirms to the Agent that it is solely responsible
for any such checks it is required to carry out and that it may not rely on
any statement in relation to such checks made by the Agent.

	25.9	 	Lenders’ indemnity to the Agent
	 
	 	 	Each Lender shall (in proportion to its share of the Total Commitments or, if the Total
Commitments are then zero, to its share of the Total Commitments immediately prior to their
reduction to zero) indemnify the Agent, within three Business Days of demand, against any
cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent’s gross
negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the
Agent has been reimbursed by an Obligor pursuant to a Finance Document).
	 
	25.10	 	Agent as Security Trustee

	 	(a)	 	The protections extended to the Agent pursuant to the foregoing
provisions of this Clause 25 shall apply to it equally (and with necessary
adaptations) in its capacity as Security Trustee pursuant to the Security
Documents.

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	 	(b)	 	The Agent in its capacity as Security Trustee or otherwise shall not
be responsible for any failure, omission or defect in perfecting the security
constituted or created pursuant to any Finance Document including, without
limitation, any failure to:

	 	(i)	 	register the same in accordance with the provision of any of the
documents of title of the relevant Obligor to any of the assets thereby
charged; and
	 
	 	(ii)	 	effect or procure registration of or otherwise protect the
security created by any Security Document under any registration laws in
any jurisdiction.

	 	(c)	 	The Agent in its capacity as Security Trustee or otherwise may accept
without enquiry such title as any Borrower may have to any of the assets
charged pursuant to any of the Security Documents.
	 
	 	(d)	 	The Agent in its capacity as trustee or otherwise shall not be under
any obligation to hold any title deed, Finance Document or any other documents
in connection with the property charged by any Finance Document or any other
security in its own possession or take any steps to protect or preserve the
same.

	25.11	 	Resignation of the Agent

	 	(a)	 	The Agent may resign and appoint one of its Affiliates as successor
by giving notice to the other Finance Parties and the Company.
	 
	 	(b)	 	Alternatively the Agent may resign by giving notice to the other
Finance Parties and the Company, in which case the Majority Lenders (after
consultation with the Company) may appoint a successor Agent.
	 
	 	(c)	 	If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within 30 days after notice of resignation
was given, the Agent (after consultation with the Company) may appoint a
successor Agent.
	 
	 	(d)	 	The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance as the
successor Agent may reasonably request for the purposes of performing its
functions as Agent under the Finance Documents.
	 
	 	(e)	 	The Agent’s resignation notice shall only take effect upon the
appointment of a successor.
	 
	 	(f)	 	Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance Documents but
shall remain entitled to the benefit of this Clause 25. Its successor and
each of the other Parties shall have the same rights and obligations amongst
themselves as they would have had if such successor had been an original
Party.
	 
	 	(g)	 	After consultation with the Company, the Majority Lenders may, by
notice to the Agent, require it to resign in accordance with paragraph (b)
above. In this event, the Agent shall resign in accordance with paragraph (b)
above.

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	25.12	 	Confidentiality

	 	(a)	 	In acting as agent for the Finance Parties, the Agent shall be
regarded as acting through its agency division which shall be treated as a
separate entity from any other of its divisions or departments.
	 
	 	(b)	 	If information is received by another division or department of the
Agent, it may be treated as confidential to that division or department and
the Agent shall not be deemed to have notice of it.

	25.13	 	Relationship with the Lenders

	 	(a)	 	The Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office unless it has
received not less than five Business Days prior notice from that Lender to the
contrary in accordance with the terms of this Agreement.
	 
	 	(b)	 	Each Lender shall supply the Agent with any information required by
the Agent in order to calculate the Mandatory Cost applicable to that Lender.

	25.14	 	Credit appraisal by the Lenders
	 
	 	 	Without affecting the responsibility of any Obligor for information supplied by it or
on its behalf in connection with any Finance Document, each Lender confirms to the Agent
that it has been, and will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with any Finance
Document including but not limited to:

	 	(a)	 	the financial condition, status and nature of each Obligor;
	 
	 	(b)	 	the legality, validity, effectiveness, adequacy or enforceability of
any Finance Document and any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection with any
Finance Document;
	 
	 	(c)	 	whether that Lender has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or in
connection with any Finance Document, the transactions contemplated by the
Finance Documents or any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection with any
Finance Document; and
	 
	 	(d)	 	the adequacy, accuracy and/or completeness of information provided by
the Agent, any Party or by any other person under or in connection with any
Finance Document, the transactions contemplated by the Finance Documents or
any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document.

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	26.	 	CONDUCT OF BUSINESS BY THE FINANCE PARTIES
	 
	 	 	No provision of this Agreement will:

	 	(a)	 	interfere with the right of any Finance Party to arrange its affairs
(tax or otherwise) in whatever manner it thinks fit;
	 
	 	(b)	 	oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of any
claim; or
	 
	 	(c)	 	oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.

	27.	 	SHARING AMONG THE FINANCE PARTIES
	 
	27.1	 	Payments to Finance Parties
	 
	 	 	If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from
an Obligor other than in accordance with Clause 28 (Payment mechanics) and applies that
amount to a payment due under the Finance Documents then:

	 	(a)	 	the Recovering Finance Party shall, within three Business Days,
notify details of the receipt or recovery, to the Agent;
	 
	 	(b)	 	the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Finance Party would have been paid had the
receipt or recovery been received or made by the Agent and distributed in
accordance with Clause 28 (Payment mechanics), without taking account of any
Tax which would be imposed on the Agent in relation to the receipt, recovery
or distribution; and
	 
	 	(c)	 	the Recovering Finance Party shall, within three Business Days of
demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal
to such receipt or recovery less any amount which the Agent determines may be
retained by the Recovering Finance Party as its share of any payment to be
made, in accordance with Clause 7.3 (Order of Application).

	27.2	 	Redistribution of payments

	 	(a)	 	The Agent shall treat the Sharing Payment as if it had been paid by
the relevant Obligor and distribute it between the Finance Parties (other than
the Recovering Finance Party) in accordance with Clause 7.3 (Order of
Application).

	27.3	 	Recovering Finance Party’s rights

	 	(a)	 	On a distribution by the Agent under Clause 27.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the rights of
the Finance Parties which have shared in the redistribution.
	 
	 	(b)	 	If and to the extent that the Recovering Finance Party is not able to
rely on its rights under paragraph (a) above, the relevant Obligor shall be
liable to
the Recovering Finance Party for a debt equal to the Sharing Payment which is
immediately due and payable.

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	27.4	 	Reversal of redistribution
	 
	 	 	If any part of the Sharing Payment received or recovered by a Recovering Finance Party
becomes repayable and is repaid by that Recovering Finance Party, then:

	 	(a)	 	each Finance Party which has received a share of the relevant Sharing
Payment pursuant to Clause 27.2 (Redistribution of payments) shall, upon
request of the Agent, pay to the Agent for account of that Recovering Finance
Party an amount equal to the appropriate part of its share of the Sharing
Payment (together with an amount as is necessary to reimburse that Recovering
Finance Party for its proportion of any interest on the Sharing Payment which
that Recovering Finance Party is required to pay); and
	 
	 	(b)	 	that Recovering Finance Party’s rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor will be liable
to the reimbursing Finance Party for the amount so reimbursed.

	27.5	 	Exceptions

	 	(a)	 	This Clause 27 shall not apply to the extent that the Recovering
Finance Party would not, after making any payment pursuant to this Clause,
have a valid and enforceable claim against the relevant Obligor.
	 
	 	(b)	 	A Recovering Finance Party is not obliged to share with any other
Lender any amount which the Recovering Finance Party has received or recovered
as a result of taking legal or arbitration proceedings, if:

	 	(i)	 	it notified that other Finance Party of the legal or arbitration
proceedings; and
	 
	 	(ii)	 	the other Finance Party had an opportunity to participate in
those legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take separate
legal or arbitration proceedings.

	28.	 	PAYMENT MECHANICS
	 
	28.1	 	Payments to the Agent

	 	(a)	 	On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or Lender shall make the same
available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds specified by
the Agent as being customary at the time for settlement of transactions in the
relevant currency in the place of payment.
	 
	 	(b)	 	Payment shall be made to such account with such bank as the Agent
specifies.

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	28.2	 	Distributions by the Agent
	 
	 	 	Each payment received by the Agent under the Finance Documents for another Party shall,
subject to Clause 28.3 (Distributions to an Obligor) and Clause 28.4 (Clawback) be made
available by the Agent as soon as practicable after receipt to the Party entitled to receive
payment in accordance with this Agreement (in the case of a Lender, for the account of its
Facility Office), to such account as that Party may notify to the Agent by not less than
five Business Days’ notice.
	 
	28.3	 	Distributions to an Obligor
	 
	 	 	The Agent may (with the consent of the Obligor or in accordance with Clause 29
(Set-off)) apply any amount received by it for that Obligor in or towards payment (on the
date and in the currency and funds of receipt) of any amount due from that Obligor under the
Finance Documents or in or towards purchase of any amount of any currency to be so applied.
	 
	28.4	 	Clawback

	 	28.4.1	 	Where a sum is to be paid to the Agent under the Finance Documents for
another Party, the Agent is not obliged to pay that sum to that other Party (or to
enter into or perform any related exchange contract) until it has been able to
establish to its satisfaction that it has actually received that sum.
	 
	 	28.4.2	 	If the Agent pays an amount to another Party and it proves to be the case
that the Agent had not actually received that amount, then the Party to whom that
amount (or the proceeds of any related exchange contract) was paid by the Agent shall
on demand refund the same to the Agent together with interest on that amount from the
date of payment to the date of receipt by the Agent, calculated by the Agent to reflect
its cost of funds.

	28.5	 	No set-off by Obligors
	 
	 	 	All payments to be made by an Obligor under the Finance Documents shall be calculated
and be made without (and free and clear of any deduction for) set-off or counterclaim.
	 
	28.6	 	Business Days

	 	(a)	 	Any payment which is due to be made on a day that is not a Business
Day shall be made on the next Business Day in the same calendar month (if
there is one) or the preceding Business Day (if there is not).
	 
	 	(b)	 	During any extension of the due date for payment of any principal or
Unpaid Sum under this Agreement interest is payable on the principal or Unpaid
Sum at the rate payable on the original due date.

	28.7	 	Currency of account

	 	28.7.1	 	Subject to paragraphs (b) and (c) below, Sterling is the currency of account
and payment for any sum due from an Obligor under any Finance Document.
	 
	 	28.7.2	 	Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
	 
	 	28.7.3	 	Any amount expressed to be payable in a currency other than Sterling shall
be paid in that other currency.

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	29.	 	SET-OFF
	 
	 	 	A Finance Party may set off any matured obligation due from an Obligor under the
Finance Documents (to the extent beneficially owned by that Finance Party) against any
matured obligation owed by that Finance Party to that Obligor, regardless of the place of
payment, booking branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off.
	 
	30.	 	COMALA SYSTEM
	 
	30.1	 	General

	 	(a)	 	The Company may access the System via the website at
www.burdale.co.uk or www.burdale.com (the “Website”) in
accordance with these terms. The System is the primary method by which the
Company is to provide the Agent with the information specified below and the
Company may make Purchase Requests and Cash Requests via the System.
	 
	 	(b)	 	The Company will notify all relevant employees of these terms and will
procure that the Company’s employees who use the System comply fully with them.
The expression Website Request means any Cash Request (which is referred to on
the System as an Advance Request) or Purchase Request made via the System in
accordance with these terms.
	 
	 	(c)	 	If required by the Agent the Company agrees to provide an updated
instruction mandate covering all relevant employees specified in a client user
form from time to time to replace the telephone, facsimile and email indemnity or
client user form provided to the Agent as a condition precedent to the first
Utilisation of a Facility (a “TFE Indemnity” or “Client User Form” respectively
and each an “Instruction Mandate”).

	30.2	 	Use of System

	 	(a)	 	The Client User Form must set out full details of the Company’s
employees who are authorised to access the System and the appropriate level of
access (including, without limitation, identifying those employees who are
authorised to make Website Requests). The Company will have provided the Agent
with an authorised account form as a condition precedent to the first Utilisation
of a Facility (an “Authorised Account Form”). The Authorised Account Form must
also set out the details of the bank accounts in the Company’s name into which
the proceeds of any Loan or Purchase Price pursuant to a Website Request may be
paid. All provisions of these terms in relation to bank accounts are subject to
the other terms of the Facility Agreement and the Debenture.
	 
	 	(b)	 	The Company may not make any additions, modifications or deletions of
any account specified in an Authorised Account Form or in the Debenture other
than in accordance with the terms of the Debenture. All compliant additions,
modifications or deletions must be notified to the Agent by the completion of a
new Authorised Account Form and, if applicable, the Company must provide an
“Other Account” notice to the relevant account

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	 	 	 	bank in accordance with the Debenture. Any additions to the list of authorised
employees must be notified to the Agent either by the completion of a new
Client User Form or in writing signed by two directors who are specified as
authorised signatories of the Company in its Instruction Mandate.
	 
	 	(c)	 	The Agent will provide such of the Company’s employees as the Company
may authorise pursuant to a Client User Form with their own individual username
and password, which will give them access to the System. The Company shall
ensure that each of the Company’s employees keeps the username and password which
the Agent provides to them confidential — they must not disclose them to anybody
or allow any third party (including each other) to access the Website using their
username and password. The Company’s employees may not use anyone else’s username
or password. The Agent will only permit access to the System by the use of an
allocated username and password.
	 
	 	(d)	 	The Company shall be responsible for all transactions conducted and all
Website Requests made using any usernames and passwords provided to the Company’s
employees (or any of them) until one Business Day after the Business Day on which
the Company or one of the Company’s employees notify the Agent that a username
and password should be de-activated (whether as a result of an employee leaving
the Company’s employment, the loss of a username or password or otherwise), which
the Company can do by sending an e-mail to support@burdale.co.uk or telephoning
the Agent at any time between 9 am and 5.30 pm on a Business Day on +44 20 7935
1115. In each case, any communication must be by a person authorised to act on
behalf of the Company in accordance with its Instruction Mandate. In the event
that a replacement password is required for any authorised employee then the
Agent shall allocate such a replacement within 2 Business Days of the relevant
request.
	 
	 	(e)	 	The Company shall notify the Agent immediately if the Company becomes
aware of any security breach in relation to the use of the System including,
without limitation, in relation to the use of, access to, or loss of, any
username or password.
	 
	 	(f)	 	The Agent is entitled to assume that every person who identifies
him/herself by entering a username and password provided to one of the Company’s
employees is the employee to whom the unique username and password have been
assigned and all transactions where such a username and password has been entered
correctly will be regarded as valid and all Website Requests will be regarded as
having been fully authorised and approved by the Company. The Company shall be
bound by every Website Request made by any person entering a username and
password provided to one of the Company’s employees and the Agent is entitled
(but not bound) to take such steps in connection with any Website Request as the
Agent may in its sole discretion deem appropriate.

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	 	(g)	 	The Company shall indemnify the Finance Parties on demand against any
cost, loss or expense which the Finance Parties may incur as a result of the
Agent complying with any Website Request.
	 
	 	(h)	 	The Agent hereby notifies the Company that internet communications are
not secure unless the data being sent is encrypted. The Agent does not accept any
responsibility for the unauthorised access to the System by a third party and/or
the corruption of data being sent by individuals to the Agent.

	30.3	 	Information Delivery

	 	(a)	 	For such time as the System and the Website are in operation, the
information specified in Schedule 3 (Reporting and Financial Undertakings) shall
be provided via the System. If at any time the System or the Website are
unavailable or suspended, all of the information set out in Schedule 3 (Reporting
and Financial Undertakings) shall be provided in physical form.

	30.4	 	Website Requests

	 	(a)	 	Each request for a cash advance through the System shall be deemed to be
a Cash Request and each Borrower making such a Website Request shall be deemed to
have given the confirmation in the final paragraph of the form of Cash Request
set out in the Facility Agreement.
	 
	 	(b)	 	Notwithstanding the terms of the Facility Agreement, each Borrower shall
lodge a Purchase Request (including a full listing of all invoices outstanding at
the end of the previous month) via the System or in physical form by no later
than the fifth Business Day of each month and at such other times as the Agent
may from time to time specify.

	30.5	 	No Liability

	 	(a)	 	The Agent will use its reasonable endeavours to ensure that the System
and the Website are available at all times, and to ensure that the files
available for the Company to download from the Website are virus free, but do not
guarantee this. The Agent is also dependent on others for the provision of the
service offered to the Company through the System and, therefore, make no
guarantees regarding the provision or continuity of that service. It is a
condition of allowing the Company and the Company’s employees to access the
Website and the System that any liability on the Agent’s part is excluded in
respect of, or arising directly or indirectly out of (i) the Website not being
available at any time or (ii) any virus or similar codes or programmes or (iii)
any loss of data occasioned by the use of the System.
	 
	 	(b)	 	Nothing in these terms shall apply to limit or restrict the Agent’s
liability in respect of fraud or for death or personal injury arising from the
Agent’s negligence.
	 
	 	(c)	 	Although the Agent has taken all reasonable care to ensure that the
information provided on the this Website is accurate, to the fullest extent
permitted by law it gives no warranties of any kind, express or implied, with
regard to the accuracy, timeliness or completeness of any such information.

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	 	(d)	 	The Agent will take reasonable care to ensure that the content of the
System is secure but it shall not be liable to the Company for any loss the
Company may suffer as a result of the breach of any of the security of the System
or the Website other than as a direct result of the gross negligence or fraud of
the Agent.

	30.6	 	Data Protection

	 	(a)	 	The Agent hereby informs the Company that the Agent has specific duties
to comply with the Data Protection regime which is in force. This means that the
Agent, and any companies processing data on the Agent’s behalf, will only hold
and use information about the Company and the Company’s employees to allow the
Agent to provide the Company with the services under these terms and the Facility
Agreement and for our own internal, administrative processes (including those of
Bank of Ireland) or as required by law or any applicable regulator.
	 
	 	(b)	 	Information the Agent holds may be transmitted through and held on
servers located overseas. In addition, an Affiliate of the Agent in the USA has
access to the information stored on the System which may result in the transfer
of information to the US for processing and storage. The Agent undertakes to put
in place appropriate technical and organisational security measures to safeguard
client information against unauthorised or unlawful processing and against
accidental loss or damage and to comply generally with the security obligations
under the seventh principle of the Data Protection Act 1998 where the Agent is
holding the Company’s information.
	 
	 	(c)	 	The Company will ensure that the Company has obtained any necessary
consent of any employee listed on a Client User Form to use their data as set out
above, including in relation to transfer of their data to the US or other
overseas jurisdictions. The Company will ensure that any such employees are made
aware of all the purposes for which the Agent may use their data as set out
above.

	30.7	 	Copyright

	 	(a)	 	The entire content of the Website is subject to copyright with all
rights reserved. The Company may not download (all or in part), copy, transmit or
modify the Website without the Agent’s prior permission. However, the Company may
print out, save and/or export part or all of the content of the Website for the
Company’s own personal/internal use.
	 
	 	(b)	 	When the Company uploads information onto the System the Company shall
use best endeavours (including without limitation, making proper use of current
versions from time to time of appropriate virus checking software) to minimise
the risk of contamination of the System by any computer virus.
	 
	 	(c)	 	Neither the Company nor any of the Company’s employees will acquire any
rights in the Website or the System.

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	30.8	 	Suspension/Termination

	 	(a)	 	The Agent reserves the right to modify, suspend or discontinue,
temporarily or permanently, the System and/or the Website or any part of it
and/or the ability to make Website Requests, with or without notice, at any time.
The Company agrees that the Agent shall not be liable to the Company and the
Company will indemnify the Agent against a claim by any third party for any such
modification, suspension or discontinuance of the System or the Website
(including the ability to make Website Requests).
	 
	 	(b)	 	For such time as the System is unavailable, suspended or discontinued by
the Agent or in any other way, the Company shall provide all information and
deliver all Utilisation Requests to the Agent in accordance with the terms of the
Facility Agreement as if these terms did not apply.

	31.	 	NOTICES
	 
	31.1	 	Communications
	 
	 	 	Any communication, consent or other approval to be made or given under or in
connection with the Finance Documents shall be made in writing, may be made by fax or letter
and shall be deemed to have been received as follows:

	 	(a)	 	if by way of fax, when received in legible form; or
	 
	 	(b)	 	if by way of letter, when it has been left at the relevant address or
two Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address.

	31.2	 	Address
	 
	 	 	Any notice to be given to the Company or any Obligor shall be given to the Company at
the address or fax number of the Company set out on the execution pages. Each Obligor
irrevocably appoints the Company as its agent for the purpose of receiving any such notice.
Any notice to be given to the Agent or a Lender shall be given to it at the address or fax
number set out on the execution pages. Any party may change these details by notice to the
other parties.
	 
	32.	 	MISCELLANEOUS PROVISIONS
	 
	32.1	 	Certificates and Determinations
	 
	 	 	Any certification or determination by the Agent of a rate or amount under any Finance
Document is, in the absence of manifest error, conclusive evidence of the matters to which
it relates.
	 
	32.2	 	Disclosure of Information

	 	(a)	 	Each Lender may disclose to any person with whom it proposes to enter
into (or has entered into) any assignment, transfer, participation or other
arrangement (whether by way of delegation or otherwise) with respect to this
Agreement such information concerning the Obligors and the Facilities as it
thinks fit, and may advertise or publicise the transaction evidenced by this
Agreement to such extent and in such manner as it sees fit.

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	 	(b)	 	Each Lender may disclose to any of its Affiliates such information
concerning the Obligors as it may think fit.

	32.3	 	Partial Invalidity
	 
	 	 	If, at any time, any provision of the Finance 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.
	 
	32.4	 	Delegation
	 
	 	 	Each Lender may at any time and from time to time delegate to any of its Affiliates or
to any other person the performance of such of the Lenders rights, obligations and functions
under the Finance Documents as such Lender may see fit.
	 
	32.5	 	Amendments

	 	(a)	 	Subject to Clause 32.6 (Exceptions) any term of the Finance Documents
may be amended or waived only with the consent of the Majority Lenders and the
Obligors and any such amendment or waiver will be binding on all Parties.
	 
	 	(b)	 	The Agent may effect, on behalf of any Finance Party, any amendment
or waiver permitted by this Clause.

	32.6	 	Exceptions

	 	(a)	 	An amendment or waiver that has the effect of changing or which
relates to:

	 	(i)	 	the definition of “Majority Lenders” in Clause 1 (Definitions);
	 
	 	(ii)	 	an extension to the date of payment of any amount under the
Finance Documents;
	 
	 	(iii)	 	a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
	 
	 	(iv)	 	an increase in or an extension of any Commitment;
	 
	 	(v)	 	a change to the Borrowers or Guarantors other than in accordance
with Clause 24 (Changes to the Obligors); or
	 
	 	(vi)	 	Clause 22 (Finance Parties’ rights and obligations), Clause 23
(Changes to the Lenders) or this Clause 32,

	 	 	 	shall not be made without the prior consent of all the Lenders.
	 
	 	(b)	 	An amendment or waiver which relates to the rights or
obligations of the Agent may not be effected without the consent of the Agent.

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	33.	 	REMEDIES AND WAIVERS
	 
	 	 	No failure to exercise, nor any delay in exercising, on the part of the Agent or any
Lender, any right or remedy under the Finance Documents shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or other exercise
or the exercise of any other right or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies provided by law.
	 
	34.	 	COUNTERPARTS
	 
	 	 	Each Finance Document may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of the Finance
Document.
	 
	35.	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by English law.
	 
	36.	 	ENFORCEMENT
	 
	36.1	 	Jurisdiction of English courts

	 	(a)	 	The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including a
dispute regarding the existence, validity or termination of this Agreement) (a
“Dispute”).
	 
	 	(b)	 	The parties agree that the courts of England are the most appropriate
and convenient courts to settle Disputes and accordingly no Party will argue
to the contrary.
	 
	 	(c)	 	This Clause 36.1 is for the benefit of the Agent and the Lenders
only. As a result, the Agent and the Lenders shall not be prevented from
taking proceedings relating to a Dispute in any other courts with
jurisdiction. To the extent allowed by law, they may take concurrent
proceedings in any number of jurisdictions.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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SCHEDULE 1

The Original Obligors

Part I

The Original Borrowers

	 	 	 
	Name of Original Borrower
	 	Registration number (or equivalent, if any)
	 
	 	 
	SALTON HOLDINGS LIMITED
	 	00114036
	 
	 	 
	SALTON EUROPE LIMITED
	 	00073700

Part II

The Original Guarantors

	 	 	 
	Name of Original Guarantor
	 	Registration number (or equivalent, if any)
	 
	 	 
	SALTON HOLDINGS LIMITED
	 	000114036
	 
	 	 
	SALTON EUROPE LIMITED
	 	00073700
	 
	 	 
	PIFCO LIMITED
	 	01713199
	 
	 	 
	HEADSTART LIMITED
	 	01753485
	 
	 	 
	OPTEC ELEMENTS LIMITED
	 	02920706
	 
	 	 
	MOUNTAIN BREEZE LIMITED
	 	00539169
	 
	 	 
	BEST PRODUCTS LIMITED
	 	00316436
	 
	 	 
	RUSSELL HOBBS TOWER LIMITED
	 	00765557
	 
	 	 
	HI-TECH INDUSTRIES LIMITED
	 	01749436
	 
	 	 
	D.H. HADEN LIMITED
	 	00617666
	 
	 	 
	CARMEN LIMITED
	 	00834782
	 
	 	 
	PIFCO DISTRIBUTION LIMITED
	 	00194751
	 
	 	 
	HI-TECH BATTERIES LIMITED
	 	02199387
	 
	 	 
	ESALTONEUROPE LIMITED
	 	01936735

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SCHEDULE 2

PART I

Conditions precedent for initial utilisation

	(A)	 	Corporate Documents
	 
	1.	 	A certified copy of the Constitutional Documents of each Original Obligor.
	 
	2.	 	A certified copy of a resolution of the board of directors of each Original Obligor
approving the execution of the Finance Documents and the taking of any action required or
permitted pursuant thereto.
	 
	3.	 	Written resolutions of those Obligors required to amend their Constitutional Documents
in order to remove any restrictions on the transfer of shares.
	 
	4.	 	A certified copy of a resolution of the board of directors of Salton Inc., in form and
substance satisfactory to the Agent.
	 
	5.	 	A specimen of the signature of each person authorised to give notices on behalf of
each Original Obligor.
	 
	6.	 	A certificate of each Original Obligor (signed by a director) confirming that the
execution and performance of this Agreement does not cause any borrowing, guaranteeing or
similar limit binding on any Original Obligor to be exceeded.
	 
	7.	 	Satisfactory company and/or other searches against each Original Obligor.
	 
	8.	 	Copies of passports, utility invoices or other acceptable evidence of identification
in relation to each director and shareholder of each Borrower, together with such further
information and documentation as the Agent may require, in order to comply with anti-money
laundering legislation.
	 
	9.	 	Legal opinions from the following:

	 	(a)	 	Sonnenschein Nath & Rosenthal LLP in relation to matters of US Law, including
but not limited to, an opinion that states that the execution of this Agreement and the
terms hereof and of any other Finance Documents shall not cause a breach of any of the
provisions of the US Debt Documents; and
	 
	 	(b)	 	Richards Butler, Hong Kong in relation to matters of Hong Kong law, including
but not limited to, opinions to trading terms and amendments to trading terms and that
licences are valid, binding and enforceable.

	10.	 	Group Structure Chart

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	(B)	 	Security And Other Documents
	 
	11.	 	The Finance Documents, duly executed by the parties thereto together with such
further documents as the Agent may require in connection with the completion, registration,
perfection or enforceability thereof or of any security intended to be created thereby.
	 
	12.	 	Any Fee Letters.
	 
	13.	 	Certified copies of (i) all notices of assignment and other notices required to be
given pursuant to the Debenture and (ii) all acknowledgements required to be given with
respect thereto, duly executed by the recipient.
	 
	14.	 	A report or other evidence as to the insurances maintained by each Obligor and their
conformity to the terms of the Finance Documents (including a letter in form and substance
satisfactory to the Agent that the broker for each policy has confirmed that within 20
Business Days the Agent will be noted as mortgagee and loss payee on the following policies
RKK270407 held with Royal and Sun Alliance, NK/14465575 held with Allianz Cornhill Engineering
and 2002/5/000002493 held with CNA Maritime Insurance Company Limited).
	 
	15.	 	All title documents to the Mortgaged Property, together with a report on title
acceptable to the Agent.
	 
	16.	 	An Environmental Report.
	 
	17.	 	A Property Valuation.
	 
	18.	 	An IP Valuation.
	 
	19.	 	Such certificates of registration, application forms and other documents (together
with appropriate fees) as may be necessary to complete and register the security created
pursuant to the Finance Documents.
	 
	20.	 	Such consents, waivers or other acknowledgments as the Agent may require from any
person (including landlords, financial institutions, warehouse owners and others dealing with
any Obligor) who may from time to time have or claim any Security Interest over any asset of
any Obligor.
	 
	21.	 	Share certificates of SEL and its Subsidiaries (together with executed, blank
transfer forms) in respect of all shares and other securities charged to the Security Trustee
pursuant to the Debenture.
	 
	22.	 	Evidence that the Blocked Accounts have been opened, together with copies of the
completed mandates.
	 
	23.	 	Duly executed Amendment Agreement between Salton Inc. and SEL dated on or about the
date hereof.
	 
	24.	 	Hong Kong Waiver and Amendment Letter.

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	25.	 	A report prepared by the Company and addressed to the Agent dated on or about the
Date of this Agreement that sets out the details of all Goods in transit at the date of first
Utilisation and that attaches a copy of each bill of lading available for such shipment.
	 
	26.	 	Details of the amounts standing to the credit of each Charged Account as at the date
on which such details are delivered.
	 
	27.	 	Deeds of release in relation to:

	 	(i)	 	HSBC Invoice Finance; and
	 
	 	(ii)	 	HSBC Bank plc.

	 	 	Together in each case with duly executed forms 403(a).
	 
	28.	 	A telephone, facsimile and e-mail indemnity executed by each Borrower.
	 
	29.	 	A duly completed Purchase Request from each Borrower.
	 
	(C)	 	Availability Limit Information
	 
	30.	 	Such information as the Agent may require in order to determine, as at the date of
this Agreement, (i) the amount of the Eligible Receivables, (ii) the Net Stock Value and (iii)
the Availability Limits pursuant to Clause 6 (Restrictions applicable to individual
Facilities) and (ii) the Reserves.
	 
	31.	 	Such information as the Agent may require in order to identify or determine (i) those
Suppliers of Stock to the Obligors which supply on title retention terms, (ii) those customers
of the Obligors which acquire stock on sale or return terms, (iii) which Stock is supplied by
any Obligor otherwise than as principal (whether as a consignee or otherwise) and (iv) the
nature of the payment terms which apply as between the Obligors and their customers.
	 
	32.	 	Evidence that the total amount available for Utilisation (immediately following the
first Utilisation) will be not less than £7,500,000.

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Part II

Additional Conditions Precedent for Lending in Relation to Stock in European Jurisdictions

	1.	 	A legal opinion from local counsel in the jurisdiction of incorporation of the
European Sales Entity in which such Stock is located in form and substance satisfactory to the
Agent.
	 
	2.	 	Any amendment agreement deemed necessary by the Agent in order to ensure that the
relevant terms of trade of such European Sales Entity are satisfactory to the Agent for the
purposes of this Agreement.
	 
	3.	 	Evidence satisfactory to the Agent that all credit terms relating to the relevant
European Sales Entity are on a basis satisfactory to the Agent.
	 
	4.	 	Copies of any relevant licence for the operation of the business of the relevant
European Sales Entity together with any amendment or assignment or other security as the Agent
shall consider necessary for the purposes of this Agreement.
	 
	5.	 	The relevant European Sales Entity shall deliver a duly executed agreement to sell the
relevant Stock to SEL (or such other entity as the Agent may specify) together with any other
necessary document required to complete or perfect such sale (unless the Agent has received
evidence that such is not necessary).
	 
	6.	 	For each relevant European Sales Entity duly executed acknowledgements from any
warehouse in that jurisdiction confirming that it shall only act upon the Agent’s instruction
to release any Stock.

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SCHEDULE 3

Part I

Reporting And Financial Undertakings

	(A)	 	REPORTING UNDERTAKINGS
	 
	1.	 	Immediate Reporting Requirements
	 
	 	 	Each Obligor will furnish to the Agent full details of each of the following matters as soon
as such Obligor becomes aware thereof:

	 	(a)	 	(i) any material delay in such Obligor’s performance of its obligations to an
account debtor, (ii) any assertion by any account debtor of any right of set-off,
defence, counterclaim or similar right with respect to any Receivable, (iii) any
information coming to its attention which may be materially adverse to the financial
condition of any account debtor and (iv) any information coming to its attention which
might lead the Agent to consider any Receivables as no longer constituting Eligible
Receivables;
	 
	 	(b)	 	any return of only one particular item of Stock by an account debtor where
that one item of Stock is faulty or defective and has a value in excess of £50,000 in
one fiscal month.
	 
	 	(c)	 	any supplier who imposes retention of title clauses, other than any mentioned
in a list provided for the purposes of Clause 19.12 (Retention of Title);
	 
	 	(d)	 	details of any litigation, arbitration or administrative proceedings which are
current, threatened or pending against any Obligor, and which might, if adversely
determined, have a Material Adverse Effect.
	 
	 	(e)	 	any Quarantine Report as soon as it has been prepared.

	2.	 	Daily Reporting Requirements

	 	(a)	 	On the date of any Utilisation each Obligor will furnish to the Agent schedules
of Receivables, collections and credits and Receivables which are (or are alleged by
the account debtor to be) subject to any restriction on assignment or charge and in
addition each Obligor shall use its reasonable efforts to furnish to the Agent on a
daily basis such schedules of Receivables, collections and credits
	 
	 	(b)	 	Each Obligor will furnish to the Agent on a daily basis a report detailing
outstanding BACS payments where the total is in excess of £100,000.

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	3.	 	Weekly Reporting Requirements
	 
	 	 	Each Obligor shall furnish to the Agent:

	 	(a)	 	on a weekly basis:

	 	(i)	 	a Purchase Request and details of any restriction on assignment
or charge in respect of Receivables;
	 
	 	(ii)	 	a report detailing all Goods in transit and such report shall
identify those Goods supported by bills of lading within the control of
the Company or its UK agent;
	 
	 	(iii)	 	a report of the Personal Care Inventory; and

	 	(b)	 	from 1 October of each year until 31 March of the next succeeding year, on a
weekly basis the Company’s reserve and rebate accruals in a format acceptable to the
Agent in its discretion.
	 
	 	(c)	 	Monthly Reporting Requirements

	 	 	Each Obligor will furnish to the Agent (in a format acceptable to the Agent):

	 	(a)	 	within 15 days of the end of each fiscal month or at such other times and with
respect to such other periods as the Agent may require, a stock report in the form from
time to time required by the Agent;
	 
	 	(b)	 	within 15 days of the end of each fiscal month or at such other times and with
respect to such other periods as the Agent may require, full details (in such form as
the Agent may from time to time require) of (i) all ageings of payables and Receivables
with dated invoices, (ii) all Stock by category, location and supplier and (iii) a
sales ledger control account and a reconciliation of the Blocked Accounts;
	 
	 	(c)	 	as soon as the same become available, but in any event within 30 days after
the end of each fiscal month (and in each case in a format acceptable to the Agent)
full individual and consolidated accounts for that period for itself and each Obligor,
including Stock figures and valuations for that fiscal month, a breakdown of the value
and identity of preferential creditors for that fiscal month and details of all input
and output VAT;
	 
	 	(d)	 	together with the accounts referred to in (c) above, a certificate from a
Director of the Company confirming that the Company was in compliance with the
financial undertakings in paragraph (B) of this Schedule as at the date to which such
accounts were made up.
	 
	 	(e)	 	upon its reasonable endeavours obtain confirmation from Salton Hong Kong
Limited that any sums paid to Salton Hong Kong Limited have been paid to end suppliers
for amounts owing by Salton Europe Limited.

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	 	(d)	 	Annual Reporting Requirements

	 	 	The Company shall supply to the Agent:

	 	(a)	 	as soon as the same become available, but in any event within 120 days after
the end of each of its financial years:

	 	(i)	 	its audited financial statements (consolidated where
appropriate) for that financial year (other than in the case of the financial
year ending 2005 where such accounts must be delivered prior to the end of
April 2006); and
	 
	 	(ii)	 	the audited financial statements of each Obligor for that financial
year;

	 	(b)	 	together with the accounts referred to in (a) above, a certificate from its
auditors confirming that the Company was in compliance with the financial undertakings
in paragraph (B) of this Schedule as at the date to which such accounts were made up;
	 
	 	(c)	 	on each of the dates falling at 12 monthly intervals after the date of this
Agreement

	 	a.	 	a Property Valuation;
	 
	 	b.	 	an IP Valuation.

provided that so long as no Default has occurred, updates only of the previous
Property Valuation or IP Valuation shall be undertaken. In respect of a Property
Valuation, this shall include a visit to each site by a valuer and market research
but shall not include any physical measurements of the relevant site unless there
have been material physical changes to the property or the site itself since the
last valuation or update which are likely to have a negative impact on the value
shown in the previous valuation or update.

	 	(e)	 	On Request and Other Reporting Requirements

Each Obligor will furnish to the Agent (in a format acceptable to the Agent) upon the
Agent’s request and in any event semi-annually to that effect:

	 	(a)	 	an appraisal of its Stock addressed to the Agent and in a form and prepared by
an appraiser acceptable to the Agent; and
	 
	 	(b)	 	such further information regarding the financial condition, business, assets
and operations of any Obligor as the Agent may reasonably request.
	 
	 	(f)	 	Reporting Requirements on Issue

Each Obligor will furnish to the Agent all documents dispatched by the Company to its
shareholders (or any class of them) or its creditors generally at the same time as they are
dispatched.

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	 	(g)	 	Provisions with respect to Stock, Receivables and Other Assets

	 	(a)	 	If any Stock is returned to an Obligor by an account debtor or is the
subject of a counterclaim the related Receivable will cease to be an Eligible
Receivable.
	 
	 	(b)	 	Each Obligor undertakes to maintain complete, accurate and up to date
debtor records (including transport documents evidencing that goods have been
despatched and payment is due), and to allow to the Agent access to those
records on request.
	 
	 	(c)	 	Each Obligor acknowledges that the Agent may take such steps as it
may deem appropriate to verify the ownership, condition or any other matter
relating to, any asset of such Obligor (whether by direct enquiry with account
debtors or otherwise howsoever).
	 
	 	(d)	 	Each Obligor will (on one Business Day’s notice or, if an Event of
Default is continuing immediately upon request) afford to the Agent or its
nominee complete access to such Obligor’s premises during normal business
hours for the purpose of inspecting, verifying and auditing the books, records
and assets of such Obligor. Each Obligor will, on request, provide to the
Agent or its nominee copies or extracts from such book or records as it may
require.

	4.	 	Provisions with respect To Receivables
	 
	 	 	With respect to the collection of Receivables, each Obligor undertakes with the Agent as
follows:

	 	(a)	 	it will collect and hold the proceeds of such Receivables as agent
and trustee for the Agent and immediately pay all amounts so received into a
Blocked Account (but pending such payment will not commingle such amounts with
any other funds);
	 
	 	(b)	 	in complying with its obligations under (a) above, it will act as
agent for the Agent on an undisclosed basis (except to the extent to which the
Data Protection Act 1998 or any other legislation compels such Obligor to
disclose the Agent’s interest to the debtor concerned);
	 
	 	(c)	 	if any account debtor makes a payment into any account which is not a
Blocked Account, it will immediately (i) transfer the relevant amounts to a
Blocked Account and (ii) direct the relevant account debtor to make future
payments to a Blocked Account;
	 
	 	(d)	 	the payments and collections described in (a) and (b) above shall be
carried out on a daily basis or (following a Default) at such other intervals
as the Agent may require;
	 
	 	(e)	 	to the extent to which the Agent does not obtain title to any
Purchased Receivable, it will hold such Receivable on trust for the Agent and
deal with it in accordance with the other provisions of this paragraph 8;

75

 

	 	(f)	 	it will not grant any credit, discount or similar allowance in
respect of any Receivable except in the ordinary course of business in
accordance with its normal policies or with the Agent’s consent; and
	 
	 	(g)	 	it will indemnify the Agent on demand against any liability incurred
to any bank or person involved in the operation of a Blocked Account.

	5.	 	Provisions with respect To Stock
	 
	 	 	With respect to its Stock, each Obligor undertakes with the Agent as follows:

	 	(a)	 	it will at all times maintain perpetual stock records in the manner
set out in the Appraisal, which shall accurately itemise and describe (i) the
kind, type, quality and quantity of such Stock, (ii) the cost of such Stock
and (iii) the daily additions to/withdrawals from such Stock;
	 
	 	(b)	 	it will conduct a physical count of such Stock ensuring each item is
counted at least once a year and (if an Event of Default is continuing) at
such other times as the Agent may require, and deliver to the Agent a report
acceptable to it with respect to such count;
	 
	 	(c)	 	it will (except for sales of Stock in the ordinary course of business
and movements of Stock previously approved by the Agent in writing) not remove
any Stock from property controlled by it or from a public warehouse unless
such removal is to and from property controlled by it;
	 
	 	(d)	 	it will produce, use, store and maintain its Stock with reasonable
care and in accordance with all insurance requirements necessary to ensure
continuance of insurance cover and to the best of its knowledge regulatory
requirements;
	 
	 	(e)	 	other than pursuant to the Argos Terms or the Amazon Terms, it will
not, without the Agent’s prior written consent, sell any Stock exceeding
£100,000 on sale or return or similar terms;
	 
	 	(f)	 	it will keep the Stock in good and marketable condition and not
(without the prior written consent of the Agent) accept any consignment stock.

	6.	 	Provisions with respect to Financial Statements and Audit

Each set of financial statements delivered by the Company pursuant the provisions
of this schedule shall be certified by a director of the relevant company as fairly
representing its financial condition as at the date as at which those financial
statements were drawn up. The Company shall procure that all audited financial
statements so delivered are (i) prepared by auditors who are ranked amongst the top
10 firms of auditors as assessed by the Institute for Chartered Accountants (ii)
prepared in accordance with GAAP and using accounting principles and policies which
are consistently applied.

76

 

	7.	 	Definitions

“Eligible Receivables” means, at any time, any Receivables at such time which are evidenced by an
invoice rendered by a Borrower to account debtors save for any Receivable which (in the opinion of
the Agent):

	 	(a)	 	does not arise from the actual and bona fide sale and delivery of
goods or rendering of services in the ordinary course of the business of the
relevant Borrower;
	 
	 	(b)	 	remains fully or partly unpaid after its Maturity Date or such longer
period as may be agreed by the Agent;
	 
	 	(c)	 	is owing by a single account debtor if Receivables representing 50%
or more of the aggregate balance owing by such account debtor to the Borrowers are
not Eligible Receivables by reason of the operation of paragraph (b) above;
	 
	 	(d)	 	is owed by a director, officer, employee or Affiliate of any Obligor;
	 
	 	(e)	 	is the subject of an (alleged) counterclaim or set off to the extent
of such (alleged) counterclaim or set off.
	 
	 	(f)	 	arises from or relates to a contract in respect of which (i)
performance has not been completed by the relevant Borrower, (ii) no invoice has
been rendered or (iii) the relevant Borrower is not entitled to effect an
assignment;
	 
	 	(g)	 	involves an account debtor which is the subject of any winding up,
administration or similar procedure indicative of insolvency;
	 
	 	(h)	 	other than in respect of Receivables arising pursuant to the Argos
Terms or the Amazon Terms, involves an account debtor whose obligation to pay the
Receivable is in any respect conditional or subject to any right of return,
rejection or similar right;
	 
	 	(i)	 	is owed by an account debtor incorporated or resident outside the
United Kingdom and is not credit insured under arrangements which are acceptable
to the Agent in its complete discretion;
	 
	 	(j)	 	is owed by an account debtor whose total indebtedness to the Obligors
exceeds any credit limit set by the Agent from time to time provided however that
the Borrowers may from time to time provide evidence from a reputable credit
insurer in relation to such account debtor showing that such credit insurance
would be available above the credit limit set by the Agent; and
	 
	 	(k)	 	is affected by proceedings or actions which are threatened or pending
against the relevant account debtors and which may result in any material adverse
change in any such account debtor’s financial condition.

77

 

	 	 	“Eligible Stock” means all Stock save for any Stock which, at any time and in the opinion of
the Agent:

	 	(a)	 	is obsolete, not in good condition or not currently usable or
saleable in each case using the methods applied in the Appraisal for any
analysis;
	 
	 	(b)	 	is slow-moving to the extent that such slow-moving Stock has a net
value in excess of £2,000,000;
	 
	 	(c)	 	is held at third party premises without acceptable access
arrangements for the Agent;
	 
	 	(d)	 	constitutes materials over which the Security Trustee does not have a
valid first ranking fixed or floating charge under the Security Documents;
	 
	 	(e)	 	constitutes consumables used in a Borrower’s business or constitutes
packaging or shipping materials;
	 
	 	(f)	 	constitutes damaged or defective materials;
	 
	 	(g)	 	is held by a Borrower as consignee for a third party;
	 
	 	(h)	 	is not the property of the relevant Borrower by virtue of retention
of title or Romalpa provisions in favour of any person;
	 
	 	(i)	 	is spare parts or scrap;
	 
	 	(j)	 	is in transit outside property which is owned and controlled by any
Obligor which is a warehouse approved by the Agent except in cases where they
are (i) in transit between such properties or warehouse and the aggregate
value of such Stock does not at any time exceed the sum of £100,000 or (ii) in
transit to a an Obligor and the Agent has direct access to all originals of
the bills of lading or other documents of title with respect to such Stock and
has received all such other documents as the Agent requires to perfect its
security and to obtain possession from any third party;
	 
	 	(k)	 	in the reasonable opinion of the Agent ought to cease to be Eligible
Stock as a consequence of any legal or regulatory change; or
	 
	 	(k)	 	is located in a European Jurisdiction and where the
conditions of Schedule 2 Part II (Additional Conditions Precedent for Lending
in Relation to Stock in European Jurisdictions) have not been satisfied in
relation to that Stock and that location.

	(B)	 	FINANCIAL UNDERTAKINGS

	 	1.1	 	The Company shall procure that:
	 
	 	 	 	The Fixed Charge Coverage Ratio in respect of any fiscal monthly period from the
Effective Date of the Second Amendment and Restatement Agreement shall not be less
than 1:1 and the first such test shall be on [31 December 2007] (such test shall be
at the end of each fiscal month and based on the immediately preceding twelve
months).

78

 

	 	 	 	For the purposes of this Clause the following definitions shall apply:
	 
	 	 	 	“Add Backs” means:

	 	(a)	 	exceptional items of £826,000 for June 2006, £150,000 for July 2006 and
£40,000 for September 2006;
	 
	 	(b)	 	default interest of £35,000 for June 2006, £34,000 for July 2006, £32,000 for
August 2006 and £34,000 for September 2006;
	 
	 	(c)	 	the Amendment Fee;
	 
	 	(d)	 	default interest and incidental fees in the nature of arrangement fees
charged by the Agent on behalf of the Lenders under this Agreement (including in
association with amendments or waivers under this Agreement);
	 
	 	(e)	 	professional or advisory fees charged by third parties engaged by the Agent
(whether on behalf of the Lenders or in its capacity as Agent) in relation to the
operation of the Facilities payable by the Company under the terms of this Agreement;
	 
	 	(f)	 	any expenses incurred after 1 October 2006 properly described as exceptional
in accordance with GAAP; and
	 
	 	(g)	 	expenses ancillary to the completion of the Second Amendment and Restatement
Agreement agreed between the Agent and the Company.

	 	 	“Capex” means any expenditure or obligation arising out of the purchase of equipment or
other assets of the Group which shall be treated as fixed or intangible in accordance with
UK GAAP;
	 
	 	 	“EBITDA” means for any period the total consolidated Group profit for that period:

	 	(a)	 	before talking into account all extraordinary profits and all
exceptional profits;
	 
	 	(b)	 	before deducting corporation tax;
	 
	 	(c)	 	before taking into account interest accrued and other finance charges
during that period, whether or not paid, deferred or capitalised;
	 
	 	(d)	 	before any amount attributable to amortisation of intangible assets
and depreciation of tangible assets; and
	 
	 	(e)	 	excluding any costs incurred in connection with the Finance
Documents.

	 	 	“Fixed Charge Coverage Ratio” means:

EBITDA
+ Fixed Charge - Capex + Add Backs

 

Fixed Charge + Interest

79

 

	 	 	 	“Fixed Charge” to include:

	 	(a)	 	Lease payments;
	 
	 	(b)	 	scheduled term loan repayments;
	 
	 	(c)	 	dividends;
	 
	 	(d)	 	(excluding Interest) any other scheduled or fixed repayments not already
taken into account in EBITDA.

	 	 	 	“Interest” means any cost for any indebtedness incurred by any member of the Group.

	1.2	 	If the Parties cannot agree whether an item should be added back to the definition of Fixed
Charge as an exceptional item, then the Agent may refer the matter for final determination to
an expert appointed by the President for the time being of The Institute of Chartered
Accountants in England & Wales in accordance with the President’s Appointment Scheme. The
Company shall indemnify the Agent for all costs of the referral to such expert.

80

 

PART I

ADDITIONAL REPORTING AND FINANCIAL UNDERTAKINGS FOR AN

ADDITIONAL OBLIGOR

REPORTING UNDERTAKINGS

	1.	 	Daily Reporting Requirements
	 
	 	 	On the date of any Utilisation and in any event at least once a week to the extent of any
Additional Obligor is a European Subsidiary, the Company or SEL will furnish to the Agent
on a daily basis copies of all e-mails or other correspondence from the relevant European
Subsidiary or requests for the release of any Stock to that European Subsidiary.
	 
	2.	 	Monthly Reporting Requirements
	 
	 	 	If a European Subsidiary becomes an Additional Borrower the relevant Obligor shall use all
reasonable endeavours to furnish to the Agent at the end of each fiscal month a report
that details the levels of creditors owed by Salton Hong Kong Limited for goods supplied
to the relevant European Subsidiary.

81

 

SCHEDULE 4 

PART 1

Forms of Request

Part I — Form of Purchase Request

[On letterhead of relevant Borrower]

	 	 	 
	Date:

	 	l
	 
	 	 
	To:

	 	Burdale Financial Limited
	 

	 	(as Agent)
	 

	 	53 Queen Anne Street
	 

	 	LONDON W1G 9HP
	 
	 	 
	Attention:

	 	Finance Director

Dear Sirs,

Facility Agreement dated [               ] December 2005 and made between Salton Holdings Limited, Salton
Europe Limited, the Original Borrowers, the Original Guarantors and Burdale Financial Limited as
agent and security trustee (the “Agent” and “Security Trustee”) (the “Facility Agreement”).

We refer to the Facility Agreement, terms defined in which have the same meaning when used in this
Purchase Request.

	1.	 	[We hereby offer to sell to the Agent all our present and future Receivables (during the
continuance of the Facility Agreement) subject to the terms of the Facility Agreement
(including in relation to the calculation of the Purchase Price). This offer shall be
regarded as a single composite offer which may be accepted or rejected in its entirety but not
in part only. Your acceptance of this offer shall be demonstrated in the manner set out in
Clause 7.1 (Sale of Receivables) of the Facility Agreement]. [NB — PARAGRAPH TO BE INSERTED
IN FIRST PURCHASE REQUEST ONLY].
	 
	2.	 	We wish to confirm our sale to the Lender, pursuant to the terms of our first Purchase
Request, of the Receivables numbered l amounting to £l details of which are set
out in the attached Schedule, initialled on each page for the purposes of identification.

82

 

	3.	 	We hold the invoices strictly to your order and agree to supply it, or a copy (certified by
an officer of the relevant Borrower or otherwise as the Agent may from time to time approve)
together with certified copies of relevant shipping documents in respect of such Receivables,
and a copy of our irrevocable instructions to the account debtor to pay the full invoice
amount of the relevant Receivable (without deduction, withholding or set off) on the Maturity
Date to a Blocked Account, forthwith upon your request.
	 
	4.	 	We further confirm that the relevant Receivables referred to in this letter are readily
identifiable from our books.

We confirm that no Default has occurred and is continuing or would result from the Lender
purchasing the Receivables offered, no Availability Limit will be breached as a result of the
Lender purchasing the Receivables offered and all the representations and warranties in Clause 19
(Representations and Warranties) of the Facility Agreement which are to be made or repeated as at
the date of this Purchase Request are true and correct.

Yours faithfully

for and on behalf of

[Borrower]

SCHEDULE

 

					
	Invoice No
	 	Account Debtor
	 	Invoice Date

83

 

PART II — Form of Cash Request

[On letterhead of relevant Borrower]

	 	 	 
	Date:

	 	l
	 
	 	 
	To:

	 	Burdale Financial Limited
	 

	 	(as Agent)
	 

	 	53 Queen Anne Street
	 

	 	LONDON W1G 9HP
	 
	 	 
	Attention:

	 	Finance Director

Dear Sirs,

Facility Agreement dated [               ] December 2005 and made between Salton Holdings Limited, Salton
Europe Limited, the Original Borrowers, the Original Guarantors and Burdale Financial Limited as
agent and security trustee (the “Agent” and “Security Trustee”) (the “Facility Agreement”).

We refer to the Facility Agreement. Terms defined in the Facility Agreement have the same meaning
when used in this Cash Request.

Pursuant to the terms of the Facility Agreement, we wish you to pay to us the sum of £l
([WRITE AMOUNT IN WORDS ALSO]) as follows:

	 	 	 	 	 	 	 
	(a)

	 	Utilisation Date:
	 	l	 	 
	 
	 	 	 	 	 	 
	(b)	 	Payment Instructions:	 	Please credit the following account:
	 
	 	 	 	 	 	 
	 

	 	 	 	Account Name:
	 	l
	 

	 	 	 	Bank:
	 	l Bank plc
	 

	 	 	 	Branch:
	 	l Branch
	 

	 	 	 	Account No:
	 	l
	 

	 	 	 	Sort Code:
	 	ll-ll-ll

We confirm that no Default has occurred and remains outstanding or would result from the requested
Utilisation being made, no Availability Limit would be breached by the making of the requested
Utilisation and that all the representations and warranties in Clause 19 of the Facility Agreement
(Representations and Warranties) which are to be made or repeated as at the date of this Cash
Request are true and correct.

Yours faithfully

for and on behalf of

[Borrower]

84

 

PART III — Form of L/C Request

[On letterhead of relevant Borrower]

	 	 	 
	Date:

	 	l
	 
	 	 
	To:

	 	Burdale Financial Limited
	 

	 	(as Agent)
	 

	 	53 Queen Anne Street
	 

	 	LONDON W1G 9HP
	 
	 	 
	Attention:

	 	Finance Director

Dear Sirs,

Facility Agreement dated [               ] December 2005 and made between Salton Holdings Limited, Salton
Europe Limited, the Original Borrowers, the Original Guarantors and Burdale Financial Limited as
agent and security trustee (the “Agent” and “Security Trustee”) (the “Facility Agreement”).

We refer to the Facility Agreement. Terms defined in the Facility Agreement have the same meaning
when used in this L/C Request.

We wish to have [state type of L/C] opened for our account under the Facility Agreement as follows:

	 	 	 	 	 
	(a)

	 	Issue Date:
	 	l
	 
	 	 	 	 
	(b)

	 	Expiry Date:
	 	l
	 
	 	 	 	 
	(c)

	 	Requested Amount:
	 	l
	 
	 	 	 	 
	(d)

	 	Beneficiary:
	 	l
	 
	 	 	 	 
	(e)

	 	Beneficiary’s bank account:
	 	l
	 
	 	 	 	 
	(f)

	 	Concerning:
	 	[Reference the agreement under which
the liability arises, describe its
nature and quantify it]

We confirm that no Default has occurred and is continuing or would result from the requested
Utilisation, no Availability Limit will be breached as a result of the requested Utilisation and
all the representations and warranties in Clause 19 (Representations and Warranties) of the
Facility

Agreement which are to be made or repeated as at the date of this L/C Request are true and correct.

Yours faithfully

for and on behalf of

[Borrower]

85

 

PART IV — Form of Forex Request

[On letterhead of relevant Facility Company]

	 	 	 
	Date:

	 	l
	 
	 	 
	To:

	 	Burdale Financial Limited
	 

	 	(as Agent)
	 

	 	53 Queen Anne Street
	 

	 	LONDON W1G 9HP
	 
	 	 
	Attention:

	 	Finance Director

Dear Sirs,

Facility Agreement dated [               ] December 2005 and made between Salton Holdings Limited, Salton
Europe Limited, the Original Borrowers, the Original Guarantors and Burdale Financial Limited as
agent and security trustee (the “Agent” and “Security Trustee”) (the “Facility Agreement”).

We refer to the Facility Agreement. Terms defined in the Facility Agreement have the same meaning
when used in this Forex Request.

We wish you to make available a Utilisation pursuant to the Revolving Credit Facility by executing
a contract for the [sale/purchase] of Foreign Currency:

	 	 	 	 	 
	(a)

	 	Spot/forward (Date):
	 	l
	 
	 	 	 	 
	(b)

	 	Foreign Currency:
	 	l
	 
	 	 	 	 
	(c)

	 	Amount:
	 	l

We confirm that no Default has occurred and is continuing or would result from the requested
Utilisation, no Availability Limit will be breached as a result of the requested Utilisation and
that all the representations and warranties in Clause 19 (Representations and Warranties) of the
Facility Agreement which are to be made or repeated as at the date of this Forex Request are true
and correct.

Yours faithfully

for and on behalf of

[Borrower]

86

 

PART V — Form of Term Loan Request

[On letterhead of Company/l]

	 	 	 
	Date:

	 	l
	 
	 	 
	To:

	 	Burdale Financial Limited
	 

	 	(as Agent)
	 

	 	53 Queen Anne Street
	 

	 	LONDON W1G 9HP
	 
	 	 
	Attention:

	 	Finance Director

Dear Sirs,

Facility Agreement dated [               ] December 2005 and made between Salton Holdings Limited, Salton
Europe Limited, the Original Borrowers, the Original Guarantors and Burdale Financial Limited as
agent and security trustee (the “Agent” and “Security Trustee”) (the “Facility Agreement”).

We refer to the Facility Agreement. Terms defined in the Facility Agreement have the same meaning
when used in this Request.

We wish to draw the [IP Loan] [and the] [Property Loan] as follows:

	 	 	 	 	 	 	 
	(a)
	 	Amount:	 	IP Loan	 	£l ([AMOUNT IN WORDS])
	 
	 	 	 	Property Loan	 	£l ([AMOUNT IN WORDS])
	 
	 	 	 	 	 	 
	(b)
	 	Utilisation Date:	 	IP Loan	 	l
	 
	 	 	 	Property Loan	 	l
	 
	 	 	 	 	 	 
	(c)	 	Payment Instructions:	 	[In each case, please][Please] credit the following account:
	 
	 	 	 	 	 	 
	 
	 	 	 	Account Name:	 	l
	 
	 	 	 	Bank:	 	l Bank plc
	 
	 	 	 	Branch:	 	l Branch
	 
	 	 	 	Account No:	 	l
	 
	 	 	 	Sort Code:	 	ll-ll-ll

We confirm that no Default has occurred and remains outstanding or would result from the requested
Utilisation being made, no Availability Limit will be breached by the making of the requested
Utilisation and that all the representations and warranties in Clause 19
(Representations and Warranties) of the Facility Agreement which are to be made or repeated as at
the date of this Term Loan Request are true and correct.

Yours faithfully

for and on behalf of

[the Company/l]

87

 

SCHEDULE 5

Part 1

Form of Accession Letter

	 	 	 
	To:

	 	Burdale Financial Limited as Agent
	 
	 	 
	From:

	 	[Subsidiary]
	 
	 	 
	and

	 	[Company] (acting on behalf of itself and the other Obligors listed below).

Dated:

Dear Sirs

[Company]
[List of other Obligors] (together the “Obligors”) — [               ] Facility Agreement

dated [               ] (the “Agreement”)

	1.	 	We refer to the Agreement. This is an Accession Letter. Terms defined in the
Agreement have the same meaning in this Accession Letter unless given a different meaning in
this Accession Letter.
	 
	2.	 	[Subsidiary] agrees to become an Additional [Borrower]/[Guarantor] and to be bound by
the terms of the Agreement as an Additional [Borrower]/[Guarantor] pursuant to Clause [24.2
(Additional Borrowers)]/[Clause 24.3 (Additional Guarantors)] of the Agreement as if it had
been an Original Borrower and/or an Original Guarantor (as the case may be). [Subsidiary] is
a company duly incorporated under the laws of [name of relevant jurisdiction].
	 
	3.	 	[Subsidiary’s] administrative details are as follows:
	 
	 	 	Address:
	 
	 	 	Fax No:
	 
	 	 	Attention:
	 
	4.	 	[Subsidiary] acknowledges the effect of Clause 7.3(d) (Order of Application), clause
(Application from Blocked Accounts) and Clause 10.3(b) (Revision of Order of Application) of
the Agreement.
	 
	5.	 	The Company confirms that no Default has occurred or will occur as a result of the
execution of this Accession Letter.
	 
	6.	 	The Company executes this Accession Letter on its own behalf and on behalf of all the
other Obligors.
	 
	7.	 	This Accession Letter is governed by English law.

	 	 	 	 	 
	EXECUTED as a DEED by [COMPANY]

	 	 	)	 
	On behalf of itself and the other Obligors
	 	 	 	 
	referred to above.

	 	 	)	 
	 
	 	 	 	 
	EXECUTED as a DEED by [SUBSIDIARY]

	 	 	)	 
	 

	 	 	)	 

88

 

SCHEDULE 5

Part 2

Form of Resignation Letter

	 	 	 
	To:

	 	Burdale Financial Limited as Agent
	 
	 	 
	From:

	 	[Subsidiary]
	 
	 	 
	and

	 	[Company] (acting on behalf of itself and the other Obligors listed below).

Dated:

Dear Sirs

[Company] [List of other Obligors] (together the “Obligors”) — [               ] Facility Agreement

dated [               ] (the “Agreement”)

	1.	 	We refer to the Agreement. This is a resignation letter. Terms defined in the
Agreement have the same meaning in this resignation letter unless given a different meaning in
this resignation letter.
	 
	2.	 	[Subsidiary] agrees to resign as a [Borrower]/[Guarantor] (the “Resigning Obligor”).
	 
	3.	 	[Subsidiary’s] administrative details are as follows:
	 
	 	 	Address:
	 
	 	 	Fax No:
	 
	 	 	Attention:
	 
	4.	 	The Company confirms that no Default has occurred or will occur as a result of the
execution of this resignation letter.
	 
	5.	 	Each Obligor other than the Resigning Obligor hereby confirms that its obligations
under the Finance Documents, including its guarantee as set out in Clause 18 (Guarantee and
Indemnity) are not discharged or otherwise affected by the resignation of the Resigning
Obligor.
	 
	6.	 	This resignation letter is a Finance Document.
	 
	7.	 	This resignation letter is governed by and shall be construed in accordance with
English law.

EXECUTED as a DEED by [RESIGNING OBLIGOR] )

EXECUTED as a DEED by [EACH OBLIGOR OTHER THAN THE RESIGNING OBLOIGOR] )

Acknowledged by

Burdale Financial Limited as Agent

89

 

EXECUTION PAGES

	 	 	 	 	 	 	 	 	 
	THE COMPANY
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	THE ORIGINAL BORROWERS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SALTON EUROPE LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 

 

 

	 	 	 	 	 	 	 	 	 
	THE ORIGINAL GUARANTORS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	SALTON HOLDINGS LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	SALTON EUROPE LIMITED

	 	 	)	 	 	 	.	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	.	 
	Attention: The Company Secretary

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	PIFCO LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	HEADSTART LIMITED

	 	 	)	 	 	 	.	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	 	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	OPTEC ELEMENTS LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	MOUNTAIN BREEZE LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	BEST PRODUCTS LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	RUSSELL HOBBS TOWER LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	HI-TECH INDUSTRIES LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	D.H. HADEN LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	CARMEN LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	PIFCO DISTRIBUTION LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	HI-TECH BATTERIES LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	ESALTONEUROPE LIMITED

	 	 	)	 	 	 	 	 
	Address: Failsworth, Manchester M35 0HS

	 	 	)	 	 	 	.	 
	Fax No: 0161 682 1708

	 	 	)	 	 	 	 	 
	Attention: The Company Secretary

	 	 	)	 	 	 	.	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	THE AGENT
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	BURDALE FINANCIAL LIMITED

	 	 	)	 	 	 	 	 
	Address: 53 Queen Anne Street, 

London W1G 9HP

	 	 	)	 	 	 	 	 
	Fax No: 020 7935 5445

	 	 	)	 	 	 	 	 
	Attention: Mr N Clark, Finance Director

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	THE SECURITY TRUSTEE
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	BURDALE FINANCIAL LIMITED

	 	 	)	 	 	 	 	 
	Address: 53 Queen Anne Street, 

London W1G 9HP

	 	 	)	 	 	 	 	 
	Fax No: 020 7935 5445

	 	 	)	 	 	 	 	 
	Attention: Mr N Clark, Finance Director

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	THE ORIGINAL LENDERS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	BURDALE FINANCIAL LIMITED

	 	 	)	 	 	 	.	 
	Address: 53 Queen Anne Street, 

London W1G 9HP

	 	 	)	 	 	 	 	 
	Fax No: 020 7935 5445

	 	 	)	 	 	 	.	 
	Attention: Mr N Clark, Finance Director

	 	 	)	 	 	 	 	 
	Commitment : £ [                ]
	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	THE ORIGINAL LENDERS
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of

	 	 	)	 	 	 	 	 
	WACHOVIA BANK, NATIONAL ASSOCIATION

	 	 	)	 	 	 	 	 
	Address:1133 Avenue of the Americas,
New York,

	 	 	)	 	 	 	 	 
	New York 10036

	 	 	)	 	 	 	 	 
	Fax No: +212 545 4283
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attention: Portfolio Manager
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Commitment: £[               ]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]