Document:

Exhibit 4.21

 

DATED 31 MARCH 2000

 

 

GEOLOGISTICS LIMITED

 

 

and

 

 

BURDALE FINANCIAL LIMITED

 

 

FACILITY
AGREEMENT

 

 

 

 

CONTENTS

 

	
  1.

  	
   

  	
  INTERPRETATION

  	
   

  
	
  2.

  	
   

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
  3.

  	
   

  	
  THE
  FACILITY

  	
   

  
	
  4.

  	
   

  	
  RESTRICTIONS
  ON UTILISATIONS

  	
   

  
	
  5.

  	
   

  	
  UTILISATION
  OF FACILITY

  	
   

  
	
  6.

  	
   

  	
  REPAYMENT
  AND PREPAYMENT

  	
   

  
	
  7.

  	
   

  	
  INTEREST
  AND COMMISSION

  	
   

  
	
  8.

  	
   

  	
  RECEIVABLES,
  STOCK AND EQUIPMENT

  	
   

  
	
  9.

  	
   

  	
  COLLECTION
  OF RECEIVABLES

  	
   

  
	
  10.

  	
   

  	
  PAYMENTS
  AND TAXES

  	
   

  
	
  11.

  	
   

  	
  INCREASED
  COSTS

  	
   

  
	
  12.

  	
   

  	
  ILLEGALITY
  AND MONETARY UNION

  	
   

  
	
  13.

  	
   

  	
  GENERAL
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  14.

  	
   

  	
  GENERAL
  UNDERTAKINGS

  	
   

  
	
  15.

  	
   

  	
  EVENTS OF
  DEFAULT

  	
   

  
	
  16.

  	
   

  	
  COSTS,
  EXPENSES AND FEES

  	
   

  
	
  17.

  	
   

  	
  INDEMNITIES

  	
   

  
	
  18.

  	
   

  	
  EVIDENCE
  OF INDEBTEDNESS

  	
   

  
	
  19.

  	
   

  	
  NOTICES

  	
   

  
	
  20.

  	
   

  	
  WAIVER,
  REMEDIES CUMULATIVE

  	
   

  
	
  21.

  	
   

  	
  INVALIDITY

  	
   

  
	
  22.

  	
   

  	
  ASSIGNMENT
  AND PARTICIPATION

  	
   

  
	
  23.

  	
   

  	
  GOVERNING
  LAW AND JURISDICTION

  	
   

  
	
  24.

  	
   

  	
  DISCLOSURE
  OF INFORMATION

  	
   

  
	
  25.

  	
   

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  
	
  SCHEDULE 2

  	
   

  
	
  SCHEDULE 3

  	
   

  
	
  SCHEDULE 4

  	
   

  
	
  SIGNATORIES

  	
   

  

 

 

THIS AGREEMENT is dated 31 MARCH 2000

 

BETWEEN:

 

(1)           GEOLOGISTICS LIMITED (Registered
in England and Wales No. 00112456) (the “Company”); and

 

(2)           BURDALE FINANCIAL LIMITED (Registered in England and Wales No. 2656007)
(“Burdale”),

 

IT IS AGREED:

 

1.             INTERPRETATION

 

1.1          Definitions

 

In
this Agreement:

 

“Account Debtor”
means a debtor of the Company in respect of a Receivable.

 

“Account Banks”
means each bank at which a Charged Account is held and which has been given and
has acknowledged all notices required by the Debenture.

 

“Actual Day of Payment” in relation to a Purchased Receivable means the date on which full
payment in respect of that Purchased Receivable is made into the Blocked
Accounts by the relevant Account Debtor or the Company.

 

“Availability Limits” means the Receivables Limit and the L/C Limit and each other limit on
Utilisations specified in Clause 4.

 

“Availability Period” means the period from the opening of business in London on today’s
date until close of business in London on the date falling five Business Days
prior to the Final Repayment Date or such later date as Burdale may agree.

 

“Availability Reserves” means, as of any date of determination, such amounts as Burdale may
from time to time establish and revise in good faith reducing the amount for
the purchase of Receivables or the issuance, or procurement, of L/Cs which
would otherwise be available to the Company under the purchase formula(s)
provided for herein: (a) to reflect events, conditions, contingencies or risks
which, as reasonably determined by Burdale in good faith, do or may affect
either (i) the Collateral or any other property which is security for the
Obligations or its value, (ii) in any materially adverse respect, the assets,
business or condition (financial or other) of the Company or any Obligor or
(iii) the security interests and other rights of Burdale in the Collateral
(including the enforceability, perfection and priority thereof) or (b) to
reflect Burdale’s reasonable good faith belief that any collateral report or
financial information furnished by or on behalf of the Company or any Obligor
to Burdale is or may have been incomplete, inaccurate or misleading in any
material respect or (c) to reflect any state of facts which Burdale reasonably
determines in good faith constitutes an Event of Default or Default. Without
limiting the generality of the foregoing, an Availability Reserve shall

 

1

 

be
established by Burdale from time to time in such amounts as Burdale may
reasonably determine to reflect (a) that Dilution Rate as of any date with
respect to the Receivables for the immediately preceding twelve (12) month
period or for the immediately preceding three (3) month period (whichever
percentage is higher) exceeds five percent (5%), (b) any variances in the
ageings of accounts receivable provided to Burdale pursuant to Clause 8.1(b)(i)
of this Agreement, (c) any unapplied cash which has not yet been applied to the
Receivables, and (d) any pass through receivables or collections for shipping
charges and cost of goods owed to the Company by the receiving party of such
goods and owed by the Company to the shipping party of such goods.

 

“Blocked Account” means each of the Company’s accounts with Barclays Bank PLC, Broadgate
CBC, 155 Bishopsgate EC2M 3XA, sort code 20-19-90, and being:

 

(a)           account number 30904813; and

(b)           account number 60669237.

 

(as
the same may be redesignated, renumbered or renamed from time to time), or such
other account as previously approved by Burdale (together, the “Blocked Accounts”).

 

“Borrowers”
means each of GLNS, BVL, GLS and GLA.

 

“BVL” means
Bekins Van Lines, LLC, a Delaware limited liability company.

 

“Business Day”
means any day not being a Saturday, Sunday or Bank holiday when banks are open
for business in London.

 

“Canadian Excess Availability” is defined in the Canadian Loan Agreement.

 

“Canadian Facility” means the credit facility in the maximum amount of Fifteen Million
Dollars ($15,000,000) (which may be adjusted from time to time in accordance
with the terms of the Loan Agreement and the Canadian Loan Agreement) provided
by Congress Financial Corporation (Canada) to GL Canada pursuant to the
Canadian Loan Agreement

 

“Canadian Loan Agreement” means a Loan Agreement dated on or about today’s date between Congress
Financial Corporation (Canada) and GL Canada, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

 

“Cash Request”
means a request for Burdale to pay to the Company an amount of unpaid Purchase
Price and/or the proceeds of a Loan in substantially the form set out in
Schedule 2 Part II.

 

“Charged Accounts” means the Blocked Accounts and the Other Accounts.

 

“Collateral”
means any of the assets and undertaking of the Corporate Obligors charged to
Burdale pursuant to the Debenture.

 

“Congress”
means Congress Financial Corporation (Western), a corporation under the laws of
California in the United States of America.

 

2

 

“Corporate Obligor” means each Obligor which is not a natural person.

 

“Daily Rate”
means £500 per person per day.

 

“Debenture” means
the debenture executed or to be executed by the Company in favour of Burdale.

 

“Deed of Priorities” means the deed of priorities dated on or about the date of this
Agreement made between the Company, Barclays Bank PLC and Burdale.

 

“Default”
means any Event of Default and any event which with the giving of notice and/or
lapse of time and/or as a result of any Utilisation and/or determination of
materiality and/or fulfilment of any condition (or any combination of the
foregoing) may constitute an Event of Default.

 

“Default Rate”
means the rate determined by Burdale to be 2% above the Purchase Rate from time
to time.

 

“Dilution Rate”
means for any period, the ratio (expressed as a percentage) of (a) the
aggregate amount of reductions in the Receivables for such period other than as
a result of payments in cash to (b) the aggregate amount of total sales of the
Company for such period.

 

“Dollar” and “$” means dollars in the lawful currency of the United States.

 

“EBITDA” is
defined in the Loan Agreement.

 

“Eligible Receivables” means, at any time, any Receivables which are and continue to be
acceptable to Burdale at such time and which are not Ineligible Receivables.

 

“Eligible Unbilled Receivables” means, at any time, any Receivable:

 

(a)           which is an Ineligible Receivable solely by virtue of the criteria in
paragraph (h) of the definition of Ineligible Receivables; and

 

(b)           in relation to which the provision of goods and services to which such
Receivable relates has been completed or is in the process of completion in
accordance with the terms and provisions contained in any documents relating
thereto; and

 

(c)           which remains fully or partly unbilled no more than thirty (30) days
after the sale and delivery of the goods and/or the completion of the services
giving rise thereto.

 

“End Date” in
relation to an L/C means the earlier of the
expiry date of such L/C and the date on which the L/C is drawn in full.

 

“Encumbrance”
means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangements, lien, charge, security interest, easement or encumbrance or other
security agreement or preferential arrangement of any kind or

 

3

 

nature
whatsoever (including, without limitation, any agreement to sell or otherwise
dispose of any assets on terms whereby any such asset may be leased to or
reacquired or acquired by any Obligor or any title retention agreement having
substantially the same economic effect as any of the foregoing).

 

“Equipment”
means all the Company’s present and future equipment, machinery, computers and
computer hardware and software (whether owned or licensed), vehicles, tools,
furniture and fixtures and all attachments, accessories and property now or in
future relating to them or used in connection with them and replacements and
substitutions for them wherever located.

 

“Event of Default” means any of the events specified in Clause
15.1.

 

“Exchange Rate”
means the prevailing spot rate of exchange of such bank as Burdale may select
for the purpose, at or around 11.00 a.m. on the date on which any conversion of
currency is to be made under this Agreement.

 

“Facility”
means the Receivables Finance Facility.

 

“Facility Limit”
means the greater of £15,000,000 or $25,000,000 (calculated at the Exchange
Rate).

 

“Final Repayment Date” means the third anniversary of today’s date provided that if the term
of the Loan Agreement shall be renewed, continued or extended pursuant to
Section 12.1 of the Loan Agreement, the Final Repayment Date shall
automatically be extended to the same day.

 

“Financing Agreements” is defined in the Loan Agreement.

 

“Finance Documents” means this Agreement, the Security Documents, the Deed of Priorities
and/or all other agreements, documents and instruments at any time executed
and/or delivered by any Obligor or any Related Company in favour of Burdale
(each a “Finance Document”).

 

“Foreign Currency” means any currency other than Sterling which is freely available and
transferable.

 

“GAAP” means
accounting principles, standards and practices generally accepted in the United
Kingdom as in effect from time to time.

 

“GIFL” means
GeoLogistics International Finance Ltd., a limited liability company organised
under the laws of Ireland.

 

“GLA” means
GeoLogistics Americas, Inc., a Delaware corporation.

 

“GLC” means
GeoLogistics Corporation, a Delaware Corporation.

 

“GLC Guarantee”
means the guarantee and indemnity executed or to be executed by GLC in favour
of Burdale in relation to the obligations of the Company to Burdale.

 

4

 

“GL Bermuda”
means GeoLogistics Holdings (Bermuda) Limited, a company incorporated in
Bermuda.

 

“GL Canada”
shall mean GeoLogistics, Co., an unlimited liability company under the laws of
Nova Scotia, Canada.

 

“GLNS” means
Bekins Worldwide Solutions, Inc., a Delaware corporation.

 

“GLS” means
GeoLogistics Services, Inc., a Delaware corporation.

 

“Ineligible Receivables” means any Receivable:

 

(a)           which does not arise from the actual and bona fide sale and delivery of
goods by the Company or rendering of services by the Company in the ordinary
course of its business which transactions are completed in accordance with the
terms and provisions contained in any documents relating to such transactions;

 

(b)           which remains fully or partly unpaid after its Maturity Date or such
longer period as may be agreed by Burdale;

 

(c)           owing by a single Account Debtor if Receivables representing 50% or more
of the aggregate balance owing by such Account Debtor to the Company are not
Eligible Receivables by reason of the operation of paragraph (b) above;

 

(d)           with respect to which the Account Debtor is a director, officer,
employee, Subsidiary or affiliate of the Company;

 

(e)           with respect to which the Account Debtor has or has asserted a
counterclaim or has a right of set off, to the extent of such counterclaim or
set off;

 

(f)            with respect to which Burdale does not have a
valid, equitable assignment under the Finance Documents;

 

(g)           as to which performance has not been completed by the Company or as to
which all goods and services in connection with such Receivable have not been
delivered to or performed for the Account Debtor or which is not fully
assignable;

 

(h)           which has not been invoiced;

 

(i)            with respect to which the Account Debtor is
the subject of any bankruptcy or insolvency proceeding in any jurisdiction or
has made an assignment for the benefit of creditors or whose assets have been
conveyed to a receiver, administrator, trustee or other insolvency official;

 

(j)            with respect to which the Account Debtor’s
obligation to pay the Receivable is conditional upon the Account Debtor’s
approval or is otherwise subject to any
repurchase obligation or right of return, as with sales made on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval (except with respect to

 

5

 

Receivables
in connection with which Account Debtors are entitled to return goods on the
basis of the quality of those goods) or consignment basis;

 

(k)           with respect to which any of the representations and warranties
contained in Clause 8.3 proves to be incorrect in any respect;

 

(l)            owed by an Account Debtor incorporated or
resident outside the United Kingdom, unless such Receivable is subject to valid
and enforceable credit insurance payable to Burdale issued by an insurer on
terms and in an amount acceptable to Burdale as determined by it in good faith
and the aggregate invoice values owed by that relevant Account Debtor are
within the insured limit;

 

(m)          owed by an Account Debtor whose total indebtedness to the Company, as
determined by the Company in good faith, exceeds any credit limit set by
Burdale from time to time with respect to that Account Debtor and communicated
to the Company in writing prior to the date of determination to the extent such
Receivable breaches that credit limit provided that any reduction in the credit
limit as to a particular Account Debtor will not cause any Receivables owing by
that Account Debtor as of the date of such reduction not to qualify as Eligible
Receivables;

 

(n)           where there are facts, events or occurrences which would impair the
validity or enforceability of or otherwise the legal right to collect that
Receivable or would give the Account Debtor relating to that Receivable the
legal right to reduce the amount payable or delaying payment of that
Receivable; and

 

(o)           which are not Sterling Receivables.

 

“L/Cs” means
letters of credit, merchandise purchase or other guarantees which are from time
to time either (a) issued or opened by Burdale for the account of the Company
or (b) with respect to which Burdale has agreed to indemnify the issuer or
guaranteed to the issuer the performance by the Company of its obligations to
such issuer.

 

“L/C Exposure”
in relation to any L/C means an amount equal to 100% of the face amount of such
L/C and all other commitments and obligations made or incurred by Burdale with
respect to such L/C.

 

“L/C Limit”
means the Facility Limit provided that at any time the sum of the L/C exposure,
the Canadian Letter of Credit Accommodations (as defined in the Loan Agreement)
and the Letter of Credit Accommodations (as so defined) shall not exceed the
Sterling equivalent of $30,000,000 (calculated at the Exchange Rate) at such
time.

 

“L/C Request”
means a request for a Utilisation of the Receivables Finance Facility by way of
the issue of an L/C in substantially the form set out in Schedule 2 Part
III.

 

“LIBOR”
means:

 

(a)           the thirty day LIBOR sterling rate quoted on the first Business Day of
each month in the Financial Times, London edition as conclusively determined by
Burdale; or

 

6

 

(b)           (if
for any reason the Financial Times, London edition ceases or fails to quote
such a rate) Burdale’s cost of funds from
whatever source it may reasonably request.

 

“Loan
Agreement” means the loan and security agreement dated on or
about today’s date between Congress as Lender and GLNS, BVL, GLA and GLS as
Borrowers.

 

“Margin”
means 2.75%, PROVIDED THAT (a) effective from the beginning of the interest
period next following Burdale’s receipt of financial statements of GLC for any
fiscal quarter of GLC (commencing with the third fiscal quarter of GLC’s fiscal
year 2000 delivered in accordance with the Loan Agreement, subject to paragraph
(b) below, the Margin shall be increased or decreased, as the case may be, to
the Margin as set forth below based on the EBITDA of GLC for the consecutive
four fiscal quarter period ended such fiscal quarter calculated based on such
financial statements for such quarter as follows:

 

	
  Margin

  	
   

  	
  EBITDA
  of GLC

  
	
  3.00%

  	
   

  	
  Equal to or less than $10,000,000

  
	
  2.75%

  	
   

  	
  Greater than $10,000,000 but equal to or less than
  $30,000,000

  
	
  2.5%

  	
   

  	
  Greater than $30,000,000

  

 

and (b) the EBITDA
amounts set forth above shall be reduced by that portion of the EBITDA for the
four (4) fiscal quarter period ended any such fiscal quarter that is
attributable to any Subsidiary of GLC that has been sold or disposed of
pursuant to a sale or disposition permitted by this Agreement, the Loan
Agreement or the Canadian Loan Agreement.

 

“Material Adverse Effect” means an effect
that results in or causes, or has a reasonable likelihood of resulting in or
causing, a material adverse change in any of:

 

(a)           the business, performance, operations or
properties of the Company and the Related Companies (other than GL Bermuda)
taken either individually or as a whole; and/or

 

(b)           the ability of the Company or any Related Company (other than GL
Bermuda) to perform its respective obligations under any of the Finance
Documents; and/or

 

(c)           the rights and remedies
of Burdale under any Finance Document.

 

“Maturity
Date” means in respect any Receivable the Business Day which
is, or immediately succeeds the date which is 90 days after the date of the
invoice in respect of such Receivable, save in respect of Eligible Unbilled
Receivables.

 

“Mortgaged Property” means any Property which is from time to time
charged in favour of Burdale by way of a first legal mortgage.

 

7

 

“Obligations”
means any and all financial accommodations made to the Company pursuant to this
Agreement and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any Obligor or Related Company to Burdale
and/or its affiliates, including principal, interest, charges, fees, costs and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, whether arising under this Agreement or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of this Agreement, whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by
Burdale.

 

“Obligor”
means the Company and any other person who guarantees and/or grants security
for any of the Company’s indebtedness or other obligations to Burdale at any time, other than a
Related Company.

 

“Other
Accounts” means the bank accounts of the Corporate Obligors
specified as Other Accounts in the Debenture and/or such other bank accounts of
the Corporate Obligors with Account Banks as Burdale may permit.

 

“Other
Receivables” means all Receivables which are not Sterling
Receivables.

 

“Outstanding
Purchase Price” means the aggregate from time to time of the
Purchase Prices of Eligible Receivables and Eligible Unbilled Receivables paid
to the Company in respect of which Burdale has not received payment from the
relevant Account Debtor or the Company.

 

“Payment
Account” means such account in the name of Burdale, as may be
notified to the Company by Burdale from time to time.

 

“Permitted
Acquisition” means any transaction, or any series of related
transactions by which any Corporate Obligor directly or indirectly acquires a
Subsidiary or any going business or all or substantially all the assets of
another person and which meets each of the following criteria:

 

(a)           the
aggregate consideration to be paid by such Corporate Obligor in connection with
such transaction or transactions together with all other consideration paid by
all Corporate Obligors in connection with any other Permitted Acquisition, and
by GL Canada and any Borrower (as defined in the Loan Agreement) in connection
with any transaction or series of transactions by which GL Canada or such
Borrower, as the case may be, directly or indirectly has acquired a Subsidiary
or any going business or all or substantially all the assets of another person
during the term of this Agreement, does not exceed $5,000,000 (or its
equivalent in other currencies);

 

(b)           no
Event of Default exists or has occurred and is continuing immediately prior to and
after giving effect to such transaction or transactions; and

 

8

 

(c)           Total
Excess Availability is not less than Ten Million Dollars ($10,000,000) (or its
equivalent in other currencies) after giving effect to such transaction or
transactions.

 

Notwithstanding anything
to the contrary set forth herein, Burdale shall have no obligation to include
any Receivable acquired pursuant to a Permitted Acquisition as an Eligible
Receivable.

 

“Property”
means the Corporate Obligors’ freehold, leasehold and rented premises and land
from time to time, wherever situated and in any jurisdiction.

 

“Purchase
Commission” is defined in Clause 7.2.

 

“Purchase
Date” in relation to a Purchased Receivable means the date of
delivery of a Purchase Request by the Company with respect to such Purchased
Receivable.

 

“Purchase
Price” means the purchase price to be paid by Burdale for
Purchased Receivables being:

 

(a)           85%
of the face value of each Eligible Receivable; and

 

(b)           65%
of Eligible Unbilled Receivables.

 

to be purchased under the
Receivables Finance Facility less maximum discounts, credits and allowances of
any nature which may be taken by or granted to any Account Debtor or other
person in connection with such Eligible Receivable or Eligible Unbilled
Receivable as the case may be.

 

“Purchase
Rate” means the aggregate of LIBOR and the Margin.

 

“Purchase
Request” means a Request for a Utilisation of the Receivables
Finance Facility in substantially the form set out in Schedule 2 Part 1.

 

“Purchased
Receivable” means a Receivable purchased or agreed to be
purchased by Burdale from the Company in accordance with the terms of this
Agreement.

 

“Receivable”
means, at any time, the aggregate present and future obligations of any debtor
of the Company for the payment of money to the Company at such time together
with all connected rights, claims, deposits and payments.

 

“Receivables
Finance Facility” is defined in Clause 3.1.

 

“Receivables
Information” means the information regarding Receivables
provided to Burdale pursuant to Clause 8.

 

“Receiver”
is defined in the Debenture.

 

“Related
Companies” means:

 

9

 

(a)           GLC; and

 

(b)           GL
Bermuda,

 

(each
a “Related Company”).

 

“Request”
means a request substantially in the form set out in the relevant Part of
Schedule 2 for a Utilisation of the Facility.

 

“Security
Documents” means the Debenture, the GLC Guarantee and any
other guarantee or security documents executed in favour of Burdale from time
to time in relation to the obligations or indebtedness of the Company.

 

“Senior
Notes” is defined in the Loan Agreement.

 

“Sterling”
and “£” means the lawful currency for the
time being of the United Kingdom.

 

“Sterling
Receivables” means all Receivables denominated in Sterling
(each a “Sterling Receivable”).

 

“Subsidiary”
has the meaning given to that term by Section 736 of the Companies Act 1985 and
includes a “Subsidiary Undertaking” as defined in Section 258 of the Companies
Act 1985 (inserted by Section 21 of the Companies Act 1989).

 

“Taxes”
includes all present and future income and other taxes, levies, assessments,
deductions, charges and withholdings of whatever nature together with interest,
additions to tax, penalties and fines in relation to such items and “Tax” and “Taxation” will
be construed accordingly.

 

“Total
Excess Availability” means at any time, the aggregate of the
UK Excess Availability, the US Excess Availability and the Canadian Excess
Availability at such time.

 

“UK Daily
Excess Availability” means from time to time the amount at
such time by which A exceeds B where:

 

A =

 

(1)           85%
of the face value of the Eligible Receivables and 65% of the face value of the
Eligible Unbilled Receivables less maximum discounts, credits and allowances of
any nature which may be taken by or granted to any Account Debtor or any other
person in connection with such Eligible Receivables or Eligible Unbilled
Receivables as the case may be; LESS

 

(2)           the
amount of Availability Reserves established by Burdale; and

 

B =     The
aggregate amount of:

 

10

 

(3)           Outstanding
Purchase Price; and

 

(4)           all
L/C Exposures

 

“UK
Excess Availability” means from time to time the amount at
such time by which A exceeds B where:

 

A =

 

(1)           85%
of the face value of the Eligible Receivables and 65% of the face value of the
Eligible Unbilled Receivables less maximum discounts, credits and allowances of
any nature which may be taken by or granted to any Account Debtor or any other
person in connection with such Eligible Receivables or Eligible Unbilled
Receivables as the case may be; LESS

 

(2)           the
amount of Availability Reserves established by Burdale: and

 

(3)           the
sum of (i) the amount of all then outstanding and unpaid Obligations, (ii) (the
aggregate amount of all trade payables of the Company which are more than sixty
(60) days past due as of the last day of the immediately preceding calendar
month and (iii) the aggregate amount of the Company’s past due lease and notes
payable; and

 

B =     The
aggregate amount of:

 

(1)           Outstanding
Purchase Price; and

 

(2)           all
L/C Exposures.

 

“US
Borrowers” is defined in the Loan Agreement.

 

“US
Excess Availability” is defined in the Loan Agreement.

 

“US
Facility” means the credit facility in the maximum amount of
$50,000,000 (which may be adjusted in accordance with the terms of the Loan
Agreement and the Canadian Loan Agreement) provided by Congress to the US
Borrowers pursuant, to the Loan Agreement.

 

“Utilisation”
means a utilisation of a Facility under this Agreement (with the delivery of a
Purchase Request and the payment of Purchase Price by Burdale pursuant to a
Cash Request constituting separate Utilisations of the Receivables Finance
Facility).

 

“Utilisation
Date” in relation to a Utilisation means the date on which
such Utilisation is made (being in relation to any Utilisation of the
Receivables Finance Facility, both the Purchase Date and the date on which any
payment of Purchase Price is made to the Company pursuant to a Cash Request).

 

11

 

“VAT” means
Value Added Tax imposed in the United Kingdom and any equivalent tax applicable
in any European jurisdiction.

 

1.2          Construction

 

(a)           In this Agreement, unless the contrary intention appears, a reference
to:

 

(i)            an “affiliate” of
any person includes any Subsidiary, group member, shareholder, director or
employee of such person;

 

(ii)           “assets” includes
properties, revenues and rights of every description, both present and future;

 

(iii)          an “Authorisation” or a “consent” includes an approval, authorisation, consent,
exemption, filing licence, registration and resolution, in each case given or
made in writing;

 

(iv)          financial statements or accounts includes the notes to such statements
or accounts;

 

(v)           a “month” means a calendar month starting
on any day;

 

(vi)          a “regulation” includes any directive,
guideline, regulation, request or rule (whether or not having the force of law)
of any governmental agency, body, department or other regulatory or
self-regulatory authority;

 

(vii)         an enactment (be it express or implied) includes references to any
amendment, re-enactment, and/or legislation subordinate to that enactment
and/or any permission of whatever kind given under that enactment;

 

(viii)        a Finance Document or other document is a reference to that Finance
Document or other document as amended, novated, supplemented or replaced (in
whole or in part);

 

(ix)           a “person” includes any individual,
company, corporation, partnership, film, joint venture, association,
organisation, trust, state or state agency (in each case whether or not having
separate legal personality);

 

(x)            any party or person includes any person
deriving title from it and any successor, transferee and assignee;

 

(xi)           a time of day is a reference to London time; and

 

(xii)          Clauses and Schedules are to the clauses of and schedules to this
Agreement.

 

(b)           Unless the contrary intention appears, a term used in any other Finance
Document or in any notice relating to any Finance Document has the same meaning
in that Finance Document or notice as in this Agreement.

 

12

 

(c)           The headings in this Agreement do not affect its interpretation.

 

(d)           Save where the context requires otherwise, words in the singular shall
import the plural and vice-versa.

 

2.             CONDITIONS PRECEDENT

 

2.1          Documentary Conditions

 

The
obligations of Burdale to the Company under this Agreement are subject to the
condition precedent that Burdale shall have received all of the documents and
evidence specified in Schedule 1 in a form and substance satisfactory to it.

 

2.2          Further Conditions

 

The
obligations of Burdale in respect of any Utilisation are subject to the further
conditions precedent that both on the date of the relevant Request and the
proposed Utilisation Date:

 

(a)           the representations and warranties set out in Clauses 8 and 13 to be
repeated on such dates are true and correct in all material respects; and

 

(b)           no Default has occurred and remains outstanding or would result from the
making of such Utilisation.

 

3.             THE
FACILITY

 

3.1          Available Facility

 

Subject
to the terms of this Agreement and in reliance on the representations and
warranties set out in Clauses 8 and 13, Burdale agrees to make available to the
Company a Receivables Finance Facility pursuant to which Burdale will from time
to time during the Availability Period (i) purchase Receivables from the
Company and (ii) issue, or procure the issue of L/Cs for the account of the
Company (the “Receivables Finance Facility”).

 

3.2          Purpose

 

The
Company will use the Facility only for its general operating, working capital
and other proper corporate purposes and always in a manner which is not
inconsistent with the Finance Documents. Without affecting the obligations of
the Company in any way, Burdale is not obliged to monitor or verify the application
of the Facility.

 

13

 

4.             RESTRICTIONS ON UTILISATIONS

 

4.1          Letters of Credit

 

No
Request may be delivered for an L/C to be issued pursuant to the
Receivables Finance Facility unless and until the form of L/C has been approved
by Burdale, the relevant issuer and the proposed beneficiary of such L/C.

 

4.2          Overall Limit

 

The
aggregate amount of:

 

(a)           Outstanding Purchase Price; and

 

(b)           all L/C Exposures.

 

shall
not at any time exceed the Facility Limit.

 

4.3          Specific Limits

 

(a)           Unbilled Limit: The Outstanding Purchase Price in relation to
Eligible Unbilled

Receivables shall not at any time exceed £1,500,000.

 

(b)           L/C Utilisations:
The aggregate amount of all L/C Exposures shall not at any time

exceed the L/C Limit.

 

(c)           Availability:
Subject to paragraph (d) below, the aggregate amount of:

 

(i)            Outstanding Purchase Price; and

 

(ii)           all L/C Exposures,

 

shall not at any time exceed the sum of:

 

(1)           85%
of the face value of the Eligible Receivables and 65% of Eligible Unbilled
Receivables less maximum discounts, credits and allowances of any nature which
may be taken by or granted to any Account Debtor or any other person in
connection with the Eligible Receivables or Eligible Unbilled Receivables as
the case may be; LESS

 

(2)           the amount of Availability Reserves
established by Burdale,

 

at such time.

 

(d)           In the event that Section 2. l(b)(i)(C) of the Loan Agreement restricts
the aggregate amount of the Loans, Letter of Credit Accommodations and other
Obligations (each as defined in the Loan Agreement) outstanding at any time
under the Loan Agreement then the aggregate amount of:

 

14

 

(i)            
Outstanding Purchase Price; and

 

(ii)           all
L/C Exposures,

 

shall be restricted to
such amount which Burdale deems necessary to ensure compliance with Section 2.1(b)(i)(C)
of the Loan Agreement.

 

4.4          Prohibition

 

No Utilisation may be
made by the Company which would cause the provisions of this Clause 4 to be
breached.

 

4.5          Burdale’s rights not Affected

 

In the event that the
aggregate amount of Outstanding Purchase Price and L/C Exposures exceeds the
amounts available under the relevant Availability Limit(s) or the Facility
Limit, as applicable, such event shall not limit, waive or otherwise affect any
rights or Burdale in that circumstance or on any future occasions.

 

4.6          Company’s Loan Account(s)

 

Burdale will maintain one
or more loan accounts, receivable accounts and foreign exchange accounts on its
books in which will be recorded (a) all Utilisations of the Receivables Finance
Facility and other liabilities of the Company pursuant to the Finance Documents
and details of the Collateral, (b) all payments made by or on behalf of the
Company and (c) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, fees, charges, costs, expenses and
interest. All entries in such account(s) shall be made in accordance with
Burdale’s customary practices as in effect from time to time.

 

4.7          Statements

 

Burdale will render to
the Company each month a statement setting forth the balance in the Company’s
loan account, receivables accounts and foreign exchange accounts maintained by
Burdale for the Company pursuant to the provisions of this Agreement, including
principal, commission, interest, fees, costs and expenses. Each such statement
may be subject to subsequent adjustment by Burdale but shall, in the absence of
manifest error or omission, be considered correct and deemed accepted by the
Company and will be conclusively binding upon the Company as an account stated
except to the extent that Burdale receives a written notice from the Company of
any specific exception of the Company within 30 days after the date such
statement has been mailed by Burdale. Until such times as Burdale has rendered
to the Company a written statement as provided above, the balance in the
Company’s loan accounts, invoice discount accounts and foreign exchange
accounts will be prima facie evidence of the amounts due and owing to Burdale
by the Company.

 

15

 

5.             UTILISATION OF FACILITY

 

5.1         Availability of Receivables
Finance Facility

 

(a)           Subject to the terms of this Agreement, the Company shall offer to sell
its Receivables to Burdale by delivering to Burdale from time to time duly
completed Purchase Requests (together with all deeds and documents referred to
in such Purchase Request), delivery of which shall oblige the Company to sell
the Receivables stated in such Purchase Request upon the terms and subject to
the conditions of this Agreement.

 

(b)           A Purchase Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Schedule 2 Part I.

 

(c)           As soon as reasonably practicable following delivery of a Purchase
Request, Burdale shall determine the Purchase Price for the Receivables
specified in such Purchase Request and will, upon being requested by the
Company, advise the Company of such determination.

 

5.2          Utilisation of Receivables
Finance Facility

 

(a)           Subject to the terms of this Agreement, the
Company may from time to time request that Burdale pay sums to the Company of
up to the amount of any unpaid Purchase Price by delivering a duly completed
Cash Request to Burdale not later than 11.00 a.m. on the proposed Utilisation
Date for such payment.

 

(b)           A Cash Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Schedule 2 Part II
and, in particular, specifies:

 

(i)            the proposed Utilisation Date, being a
Business Day falling during the Availability Period;

 

(ii)           the amount of the sum to be paid by Burdale which must be less than or
equal to the aggregate of unpaid Purchase Price; and

 

(iii)          if not already notified
to Burdale, the details of the Other Account into which the payment is to be
made on the Utilisation Date.

 

(c)           Payments
made by Burdale pursuant to a Cash Request shall be deemed to be payments of any unpaid Purchase Price
to the full extent of such unpaid Purchase Price.

 

(d)           Burdale’s
obligation to pay the Purchase Price of any Receivable (or any unpaid portion
of it as the case may be) shall be terminated on the earlier of the Actual Day
of Payment and the Maturity Date of such Receivable.

 

16

 

5.3          L/C Utilisations

 

(a)           Subject to the terms of this Agreement, the Company may request the
issue of an L/C by delivering a duly completed L/C Request to Burdale not later
than 11.00 a.m. at least one Business Day before the proposed Utilisation Date
for that L/C.

 

(b)           An L/C Request will not be regarded as having been duly
completed unless it is substantially in the form attached in Schedule 2 Part
III and, in particular, specifies:

 

(i)            the proposed Utilisation Date, being a
Business Day failing during the Availability Period;

 

(ii)           the amount of the L/C required, the L/C Exposure of which must be equal
to or less than the undrawn/unutilised amount of the Receivables Finance
Facility and within the relevant Availability Limits as at the proposed
Utilisation Date;

 

(iii)          if not already notified to Burdale, the details of the
beneficiary, payee or addressee of such L/C.

 

5.4          General Provisions regarding L/Cs

 

(a)           Nothing
in this Agreement shall be deemed or construed to grant the Company any right
or authority to pledge the credit of Burdale in any manner. Burdale shall have
no liability of any kind with respect to any L/C provided by an issuer other
than Burdale unless Burdale has duly executed and delivered to such issuer the
application or a guarantee or indemnification in writing with respect to such
L/C. The Company shall be bound by an interpretation made in good faith by
Burdale, or any other issuer or correspondent under or in connection with any
L/C or any documents, drafts or acceptances in relation to any L/C,
notwithstanding that such interpretation may be inconsistent with any
instructions of the Company. Burdale shall have the sole and exclusive right
and authority to, and the Company shall not:

 

(i)            at
any time an Event of Default exists or has occurred and is continuing:

 

(1)           approve
or resolve any questions of non-compliance of documents;

 

(2)           give
any instructions as to acceptance or rejection of any documents

or goods; or

 

(3)           execute
any and all applications for steamship or airway guarantees,

indemnities or delivery orders and at all times;

 

(ii)           at
any time:

 

(1)           grant
any extensions of the maturity of, time of payment for, or time of presentation
of, any drafts, acceptances, or documents; and

 

17

 

(2)           agree to any amendments, renewals, extensions, modifications, changes
or cancellations of any of the terms or conditions of any of the applications,
L/Cs, or documents, drafts or acceptances in relation to any L/C or any letters of credit included in the
Collateral. Burdale may take such actions either in its own name or in the
Company’s name.

 

(b)           Any rights, remedies, duties or obligations granted or
undertaken by the Company to any issuer or correspondent in any application for
any L/C, or any other agreement in favour of any issuer or correspondence
relating to any L/C, shall be deemed to have been granted or undertaken by the
Company to Burdale. Any duties or obligations undertaken by Burdale to any
issuer or correspondence in any application for any L/C, or any other agreement
by Burdale in favour of any issuer or correspondence relating to any L/C, shall
be deemed to have been undertaken by the Company to Burdale and to apply in all
respects to the Company.

 

(c)           None
of Burdale, any L/C issuer (or any of their respective correspondents) or any advising,
negotiating or paying bank with respect
to any L/C shall be responsible in any way for:

 

(i)            the performance by any beneficiary
under any L/C of that beneficiary’s obligations to the Company; or

 

(ii)           the
form, sufficiency, correctness,
genuineness, authority of any person signing or the legal effect of any
documents called for under any L/C if such documents appear on their face to be
in order.

 

5.5          Deemed Payment

 

All
payments made by Burdale in accordance with the terms of any L/C or any guarantee
or indemnity given by Burdale to the issuer of any L/C (as the case may be)
shall be deemed to be a payment of Purchase Price to the Company in an amount
equal to such payment, drawn down on the date of such payment and subject to
the provisions of this Agreement with respect to Outstanding Purchase Price
(including, without limitation, as to commission and repayment).

 

6.             REPAYMENT AND PREPAYMENT

 

6.1          Receivables Finance Facility

 

(a)           If in relation to a Purchased Receivable Burdale determines on the Maturity
Date in respect of such Purchased Receivable that it has not received payment
in accordance with Clause 9.1 of the full amount of such Purchased Receivable,
the Company shall, on demand by Burdale pay to Burdale an amount equal to the
Outstanding Purchase Price of such Purchased Receivable for which payment has
not been received provided that
this provision shall not restrict (nor oblige) Burdale in any way in or from
pursuing and obtaining payment in respect of such Purchased Receivable from the
Account Debtors or otherwise (which payment shall be
made into the Blocked Accounts) and the Company undertakes that it will

 

18

 

do all such reasonable
acts or things necessary or desirable to help Burdale in pursuing and obtaining
such payment.

 

(b)           Burdale shall be entitled to deduct
from payments made by Account Debtors and/or the Company into the Blocked
Accounts in respect of Purchased Receivables the then Outstanding Purchase
Price in respect of such Purchased Receivables and the balance remaining after
such deduction shall be applied in accordance with Clause 6.2.

 

6.2          Other Utilisations

 

Subject as provided below
all amounts standing to the credit of the Blocked Accounts from time to time
following the deductions referred to in Clause 6.l(b) shall be applied as
follows:

 

(a)           first in payment of any fees, costs
and expenses due from the Company to Burdale under the Finance Documents;

 

(b)           second in payment of all Purchase
Commission (or in making provision for Purchase Commission which will fall due
for payment on the last Business Day of the current calendar month);

 

(c)           third in or towards satisfaction of
any other payment obligation of the Company under the Finance Documents; and

 

(d)           fourth to the Company by way of
payment into such Other Account as the Company may specify to Burdale in
writing from time to time.

 

Notwithstanding the
above, at all times following the occurrence of an Event of Default and whilst
the same is continuing, amounts standing to the credit of the Blocked Accounts
shall be applied to such of the liabilities of the Company under the Finance
Documents and in such order as Burdale may in its absolute discretion
determine.

 

6.3          Reutilisation

 

Subject to the terms of
this Agreement, all amounts of Outstanding Purchase Price recovered and paid to
Burdale, may, subject to the terms of this Agreement, be reutilised as
Utilisations of the Receivables Finance Facility.

 

6.4          Prepayment

 

If at any time the
outstanding Utilisations or any part of them cause any Availability Limit to be
exceeded then the Company will immediately pay into the Payment Account, as
cash collateral in respect of Outstanding Purchase Price and/or any contingent
obligation of Burdale in relation to any L/C
or other Utilisation, to the extent required to ensure compliance with
that Availability Limit and, until such time as that Availability Limit is no
longer breached, no further Utilisations may be requested (including, for the
avoidance of doubt, pursuant to a Cash Request) or will, at Burdale’s option,
be made or issued.

 

19

 

6.5          Reduction of Facility Limit

 

At
the request of the Company by giving not less than ten Business Day’s prior
written notice to Burdale, the Facility Limit may from time to time be reduced
provided that on or before the effective date for such reduction the Company
shall pay to Burdale:

 

(a)           such amount as may be necessary as cash collateral for
Outstanding Purchase Price and/or Burdale’s contingent obligations under any
issued L/C to ensure that the Company remains in compliance with the
Availability Limits; and

 

(b)           a
fee calculated by applying to the
amount of the reduction the applicable percentage set out in column (2) below:

 

	
  (1)

  Date of Reduction

  	
   

  	
  (2)

  Applicable

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or before the
  first anniversary of today’s date

  	
   

  	
  2

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the first
  but on or before the second anniversary of today’s date

  	
   

  	
  1

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After the second
  but on or before the third anniversary of today’s date

  	
   

  	
  0.5

  	
  %

  

 

Any
exercise by Burdale of its rights under Clause 15.2(b) and/or 15.3 and/or the
operation of Clause 12.1 shall be deemed for the purposes of paragraph (b)
above to be a reduction in the Facility Limit in an amount equal to the amount
of the Facility so cancelled.

 

6.6          Final Repayment

 

The
Company will, on the Final Repayment Date, pay to Burdale in full all
outstanding and unpaid liabilities under the Finance Documents (whether by way
of principal, interest, commission, fees, costs, expenses or otherwise) and
shall pay to Burdale such amount as is necessary to provide full cash
collateral for Outstanding Purchase Price and any contingent obligations which
Burdale may have in respect of any L/C or other outstanding Utilisation. Such
payment shall be denominated in Sterling and will be made by wire or other
automatic transfer to the Payment Account. If the amounts so paid are received
in the Payment Account later than 1.00 p.m. on the Final Repayment Date then
the Company will pay interest on such amounts to Burdale at the Default Rate
until payment has been made in full.

 

20

 

7.             INTEREST AND COMMISSION

 

7.1          Default Interest

 

(a)           Upon the occurrence of an Event of
Default and whilst the same is continuing unremedied or unwaived for 5 Business
Days after notification by Burdale to the Company, all amounts outstanding
under this Agreement shall bear interest (both before and after judgment) at
the Default Rate.

 

(b)           Interest at the Default Rate will be
compounded at the end of each period designated by Burdale and will be
determined by Burdale on the first Business Day of each such period.

 

7.2          Purchase Commission

 

The
Company shall pay to Burdale commission in respect of each Purchased Receivable
at a rate equivalent to the Purchase Rate applied to the Outstanding Purchase
Price for such Receivable from the date on which Burdale paid such Purchase
Price to the Company down to the Actual Date of Payment (the “Purchase Commission”) Burdale shall calculate the Purchase
Commission on a daily basis and it shall be paid by the Company monthly in
arrears on the first Business Day of each month.

 

8.             RECEIVABLES, STOCK AND EQUIPMENT

 

8.1          Reporting regarding
Receivables

 

The
Company will provide Burdale with the following documents with all amounts
expressed in Sterling and otherwise in a form satisfactory to Burdale:

 

(a)           on a daily basis with a schedule of
Receivables, collections received and credits issued and on a monthly basis
with a stock report substantially in the form set out in Schedule 3 Part II
together with such further information regarding Receivables as Burdale may
reasonably request;

 

(b)           as soon as practicable and in any
event within 15 days of the end of each month or more frequently as Burdale may
reasonably request;

 

(i)            ageings of creditors and Receivables with
details of all dated invoices; and

 

(ii)           an analysis of preferential creditors in substantially the form set out
in Schedule 3 Part III;

 

all in a format to be agreed with Burdale (acting reasonably).

 

(c)           promptly from time to time as Burdale
may reasonably request:

 

(i)            copies of shipping and delivery documents
relating to stock and Equipment;

 

21

 

(ii)           copies of the ageings of all Receivables paid to the Company, on a
monthly basis by invoice date;

 

(iii)          full details of all Account Debtors (including their addresses)
together with copies of customer statements and credit notes, remittance
advices, collection schedules and reports and copies of deposit slips and all
monthly bank statements of the Company and its Subsidiaries or statements for
such other period as Burdale may require;

 

(iv)          such other reports regarding the Collateral as Burdale may reasonably
request from time to time;

 

(d)           on a daily basis, details of any Receivables which have become or are
purported to be, by the relevant Account Debtor or otherwise, subject to any
prohibitions or restriction on charge or assignment; and

 

(e)           immediately upon becoming aware of the same, details of any creditor of
the Company whose ordinary terms of business include title retention provisions
which are not already specified in Schedule 3 Part 1.

 

8.2          Reporting regarding Account
Debtors

 

(a)           Notification: The
Company will notify Burdale promptly of:

 

(i)            any material delay in the Company’s
performance of any of its obligations to any Account Debtor or the assertion of
any claims, offsets, defences or counterclaims by any Account Debtor, or any
material disputes with Account Debtors, or any settlement, adjustment or
compromise of any such matter;

 

(ii)           all material adverse information known to the Company relating to the
financial condition of any Account Debtor; and

 

(iii)          any event or circumstance which, to the Company’s knowledge, would
cause Burdale to consider any then existing Receivables as no longer
constituting Eligible Receivables or Eligible Unbilled Receivables as the case
may be.

 

(b)           Disputes and Settlements with Account Debtors: No credit, discount, allowance or extension
or agreement for any of the foregoing will be granted to any Account Debtor
without Burdale’s consent, except in the ordinary course of the Company’s business
in accordance with proper practices and policies operated by the Company prior
to the date of this Agreement. At any time while an Event of Default is outstanding,
Burdale will, at its option, have the exclusive right to settle, adjust or compromise
any claim, offset, counterclaim or dispute with any Account Debtor and to grant
any credits, discounts or allowances in relation to such matters.

 

8.3          Representations and
Undertakings as to Receivables

 

With
respect to each Receivable, the Company represents and warrants to Burdale that
and undertakes to ensure that at all times:

 

22

 

(a)           the
amounts shown on any invoice delivered to Burdale and in any Receivables Information
delivered to Burdale are true and complete;

 

(b)           no
payments have been or will be made on such Receivable except payments collected
by the Company and immediately transmitted or delivered to Burdale or elsewhere
pursuant to the terms of this Agreement;

 

(c)           no
credit, discount, allowance or extension or agreement for any of the foregoing will
be granted to any Account Debtor except as reported to and agreed by Burdale
except for credits, discounts, allowances or extensions made or given in the
ordinary course of the Company’s business in accordance with its proper practices
and policies operated prior to today’s date as disclosed to Burdale in writing;

 

(d)           to
the best of the Company’s knowledge, there are no set-offs, deductions, defences,
counterclaims or disputes existing or asserted with respect to such Receivable
except as reported to and agreed by Burdale;

 

(e)           none
of the transactions giving rise to any Receivable breach any applicable law or regulation
and all documentation relating to such Receivable is legally enforceable in
accordance with its terms;

 

(f)            each
Receivable is genuine, is and will be in all respects what it purports to be,
and is not the subject of a court judgment;

 

(g)           each
Receivable represents undisputed, bona fide transaction(s) completed in accordance
with the terms and provisions contained in any documents delivered to Burdale
with respect to such Receivable;

 

(h)           the
amounts shown on the relevant Receivables Information, the Company’s books and
records and all invoices and statements which may be delivered to Burdale with
respect thereto are actually and absolutely owing to the Company and are not in
any way contingent;

 

(i)            to
the best of the Company’s knowledge, there are no facts, events or occurrences
which in any way impair the validity or enforceability of any such Receivable
or tend to reduce the amount payable in respect of such Receivable as shown on
the relevant Receivables Information, the Company’s books and records and all
invoices and statements delivered to Burdale with respect to such
Receivable;

 

(j)            to
the best of the Company’s knowledge, all Account Debtors have the capacity to
contract and are solvent;

 

(k)           the
services furnished and/or goods sold giving rise to each Receivable are not
subject to any Encumbrance (except for an Encumbrance which is permitted by
Clause 14(g)); and

 

23

 

(l)            to
the best of the Company’s knowledge, there are no proceedings or actions which
are threatened or pending against any Account Debtor which might reasonably be
expected to result in a material adverse change in such Account Debtor’s
financial condition.

 

8.4          Verification

 

Burdale will have the
right from time to time, in the name of any nominee, to verify the validity,
amount or any other matter relating to any Receivable or other Collateral, by
mail, telephone, facsimile or otherwise.

 

8.5          Rights after an Event of Default

 

(a)           Dealing with Collateral and Receivables: Burdale may, at any
time that a Default has occurred and is continuing and without prejudice to any
of its rights under Clause 15.2 or otherwise under this Agreement or any other
Finance Document:

 

(i)            extend
the time of payment of, compromise, settle or adjust for cash, credit, return
of merchandise or otherwise, and upon any terms or conditions, any and all
Receivables or other obligations included in the Collateral and thereby
discharge or release any Account Debtor or any other party or parties in any
way liable for payment of any Receivable without affecting any of the
Receivables, demand or enforce payment of any Receivables, but without any duty
to do so, and Burdale will not be liable for its failure to enforce the payment
of any Receivable nor for the negligence of its agents or attorneys with
respect to any Receivable; and

 

(ii)           take
whatever other action Burdale may deem necessary for the protection of its
interests in the Collateral.

 

(b)           Notice to debtors: At any time that a Default is
outstanding, Burdale or its nominees may, at Burdale’s discretion do any of the
following:

 

(i)            having
given prior notification to the Company, notify any or all Account Debtors that
the Receivables have been assigned to Burdale and that payments in respect of
Receivables are to be redirected to such account as is specified by Burdale;

 

(ii)           request
the Company to give the notification referred to in Clause 8.5(b)(i) above
and/or to ensure that all invoices and statements in respect of Receivables
issued to the Account Debtors state the information referred to in Clause
8.5(b)(i); and

 

(iii)          direct
any or all relevant Account Debtors to make all payments in respect of
Receivables direct to Burdale at such account as Burdale may specify.

 

8.6          Burdale’s Right to Cure

 

Burdale may, at its
option:

 

24

 

(a)           after
giving five days notice to the Company, cure any default by the Company under
any agreement with an Account Debtor in respect of a Receivable (other than
bona fide disputes in the ordinary course of the Company’s business where no
Event of Default has occurred and is continuing) or under any other agreement
with a third party as may be required by Burdale in good faith to facilitate
the collection of the Receivables or to enable Burdale to have access to any of
the Collateral or any Equipment;

 

(b)           after
giving five days notice to the Company, pay or make a bond in respect of or
appeal any judgment entered into against the Company which, upon execution,
attachment or the exercise of any similar remedy in respect of such judgment,
would result in an Encumbrance being imposed on the Collateral or would impair
Burdale’s ability to obtain possession of, realise or collect any of the Collateral;

 

(c)           discharge
taxes, Encumbrances or other encumbrances at any time levied on or existing
with respect to the Collateral; and

 

(d)           pay
any amount, incur any expense or perform any act including without limitation the
payment to any creditors in respect of plant and/or machinery, which, in Burdale’s
judgment, is necessary or appropriate to reserve, protect, insure or maintain
the Collateral and the rights of Burdale with respect to it.

 

Burdale may charge any
monies so expended or costs so incurred by it to the Company’s account, such
amounts to be repayable by the Company on demand. Burdale will be under no
obligation to effect any such cure or payment or incur any such cost and will
not, by doing so, be deemed to have assumed any obligation or liability of the
Company. Any payment made or other action taken by Burdale under this Clause
will be without prejudice to any right it may have to assert an Event of
Default under this Agreement and to proceed accordingly.

 

8.7          Access to Property

 

From time to time as
requested by Burdale on one Business Day’s notice (for the purpose of carrying
out an audit in accordance with Clause 14(j) and in the case of emergency as
determined by Burdale) (but subject to Clause 16.1(g) regarding daily charge
rates), at the cost and expense of the Company:

 

(a)           Burdale
or its nominees will have complete access to all of the Company’s Property during
normal business hours and having given prior notice to the Company, or at any time
and without notice to the Company if an Event of Default is outstanding, for
the purposes of inspecting, verifying and auditing the Collateral and all of
the Company’s books and records;

 

(b)           the
Company will promptly furnish to Burdale or its nominees such copies of or extracts
from such books and records as may be reasonably requested from the Company;
and

 

25

 

(c)           Burdale or its nominees may have access to, during normal business
hours, and use, such of the Company’s personnel, equipment, supplies and
Property as may be reasonably necessary for the purpose of inspecting,
verifying and auditing the Collateral and all of the Company’s books and
records and if an Event of Default has occurred and is continuing for the
collection of the Receivables and the realisation of the other Collateral.

 

8.8          Burdale’s Disclaimer

 

Burdale
will not be responsible for the safekeeping of, any loss or damage to, any
diminution in value of or any act or default of any carrier, warehouseman,
bailee or other person in relation to the stock, finished goods, Equipment or
Receivables.

 

9.             COLLECTION OF RECEIVABLES

 

9.1          Flow of funds

 

Subject
to Clause 9.2, the Company undertakes that during the period commencing on the
date of this Agreement and ending when all its liabilities under the Finance
Documents have been discharged in full and Burdale is under no further
obligation under any of the Finance Documents:

 

(a)           the Company will collect as agent and trustee for Burdale all
Receivables and immediately pay (or procure that payment is made) all amounts
due:

 

(i)            in respect of each Sterling Receivable, into
the Blocked Accounts; and

 

(ii)           in respect of each other Receivable, into an Other Account,

 

provided
however that until payment into the relevant Charged Account it will hold all
money so received upon trust for Burdale and will not commingle in any Charged
Account any monies which are not Receivables or which are not payable to
Burdale;

 

(b)           without prejudice to the Company’s obligations under Clause 14(l) and Clause
15.1(b), in the event that any Account Debtor makes a payment in respect of
Receivables into another Charged Account not in accordance with paragraph (a) above,
the Company will ensure that the amounts representing such payment are promptly
transferred into the relevant Charged Account and will immediately direct the
relevant Account Debtor to make all future payments into such relevant Charged
Account;

 

(c)           all the transfers and collections referred to in paragraphs (a) and (b)
above shall be carried out daily prior to the occurrence of any Default and
thereafter at such intervals as Burdale may, at its discretion, specify to the
Company; and

 

(d)           in the event that during any three month period the average of amounts
due in respect of Other Receivables (converted into Sterling at the Exchange
Rate if necessary) is equal or greater than 10% of all amounts due in respect
of

 

26

 

Receivables (converted
into Sterling at the Exchange Rate if necessary) during such period, the
Company will promptly at Burdale’s request:

 

(i)            provide
Burdale with security over further bank accounts (in relation to receipts in
the relevant currency) in London (the “New Accounts”)
on substantially the same terms as the security provided by the Company over
the Blocked Accounts in the Debenture; and

 

(ii)           immediately
direct all relevant Account Debtors to pay all amounts due in respect of the
Other Receivables into the relevant New Account.

 

9.2          Failure of Debenture

 

In the event that the
Debenture in respect of any Account Bank is not, at any time, effective or is
not in full force and effect, the Company will (unless otherwise directed by
Burdale and without prejudice to Burdale’s rights and remedies under the
Finance Documents), for so long as the Debenture is ineffective or not in full
force and effect and ending on the date when all the liabilities of the Company
under the Finance Documents have been repaid or discharged in full and Burdale
is under no further obligation under any of the Finance Documents, collect as
agent and trustee for Burdale all Receivables which would otherwise have been
payable into the Blocked Accounts and immediately pay (or procure the payment
of) all amounts due in respect of those Receivables into the Payment Account.

 

9.3          Reimbursement

 

The Company agrees to
reimburse Burdale on demand for any liability of Burdale to any Account Bank or
any other bank or person involved in the transfer of funds to or from the
Blocked Accounts arising out of Burdale’s payments to or indemnification of
that bank or person, and this obligation to reimburse shall survive the
termination or non-renewal of this Agreement.

 

9.4          Excess Amounts

 

Any amounts received by
Burdale from or for the account of the Company in excess of the amounts then
due and payable by the Company will be dealt with in accordance with the terms
of Clause 6 and the Debenture.

 

9.5          Time of application

 

For the purposes of
calculating any Purchase Commission, payments or other funds received by
Burdale will be applied (conditional upon final collection) in satisfaction or
reduction of the Company’s liabilities under the Finance Documents one (1)
Business Day following the date of receipt of funds by Burdale in the Payment
Account. For the purposes of calculating the Facility Limit such payments will
be applied (conditional upon final collection) in satisfaction or reduction of
the Company’s liabilities under the Finance Documents on the Business Day of
receipt by Burdale in the Payment Account, provided that such payments are received within sufficient time (in
accordance with Burdale’s usual and customary practices as in effect from time
to time) to credit the Company’s loan and

 

27

 

receivable and foreign
exchange account on such day, and if not, then on the next Business Day.

 

10.          PAYMENTS
AND TAXES

 

10.1        Payments

 

(a)           Subject
to Clause 9, all payments to be made by the Company to Burdale under the
Finance Documents will be made on or before their due date in Sterling in cleared
funds for value not later than 11.00 a.m. on the day in question to the Payment
Account.

 

(b)           If
any payment under the Finance Documents would otherwise be due on a day which
is not a Business Day, it will be due on the next succeeding Business Day or,
if that Business Day falls in the following month, on the preceding Business
Day.

 

(c)           If
after receipt by Burdale of any payment of, or proceeds of Collateral applied
to the payment of, any of the Company’s payment liabilities, Burdale is
required to surrender or return such payment or proceeds to any person for any
reason, then the payment liabilities intended to be satisfied by such payment
or proceeds shall be treated as not having been received by Burdale. The
Company shall be liable to pay to Burdale the amount of any payments or
proceeds so surrendered or returned. This Clause 10.1(c) shall remain effective
notwithstanding any action which may be taken by Burdale in reliance upon such
payment or proceeds and will survive the termination or non-renewal of this
Agreement.

 

10.2        Taxes

 

(a)           Subject
to Clause 10.2(c), all Taxes (other than Tax on the overall net income of Burdale)
due in respect of this Agreement or any amounts paid or payable under the
Finance Documents will be paid by the Company when due and in any event prior
to the date on which penalties attach to such Taxes, and the Company will
indemnify Burdale for any cost, loss or liability incurred by Burdale in
respect of all such Taxes.

 

(b)           Subject
to Clause 10.2(c), all payments by the Company of any nature under the Finance
Documents will be made without regard to any equities between the Company and
Burdale and in full and free and clear of, and without any deduction or
withholding (whether in respect of set-off, restriction, counterclaim, Taxes or
otherwise whatsoever) unless the deduction or withholding is required by law,
in which event the Company will:

 

(i)            ensure
that the deduction or withholding does not exceed the minimum amount legally
required;

 

(ii)           pay
to Burdale (or procure the payment to Burdale of) an additional amount being the
amount required to procure that the aggregate net amount received by Burdale
will equal the full amount which would have been received by it

 

28

 

had no deduction or
withholding been made (including, for the avoidance of doubt, any withholding
or deduction on any additional amount paid);

 

(iii)          pay
to the relevant taxation or other authorities within the period for payment
permitted by the applicable law such amount as is required to be paid in
consequence of the deduction or withholding (including, but without prejudice
to the generality of the foregoing, the full amount of any deduction or
withholding from any additional amount paid pursuant to paragraph (ii) above)
and supply Burdale with written evidence that it has made the appropriate
payment; and

 

(iv)          indemnify
Burdale against any costs, loss or liability incurred by it by reason of any
failure of the Company to make any deduction or withholding or by reason of any
increased payment not being made on the due date for payment.

 

(c)           If
the Company has made an additional payment under Clause 10.2(b) in respect of
any Tax and such Tax was not properly or legally been charged or levied then Burdale
will, upon the Company’s request and at the Company’s expense, provide such
documents to the Company as it may reasonably request to enable it to contest
the imposition of such Tax provided always that the provision of such documents
and the contesting of the relevant Tax liability shall have no reasonable likelihood
of resulting in any liability for Burdale.

 

(d)           If
the Company has made an additional payment under Clause 10.2(b) in respect of
any Tax and Burdale subsequently receives a credit, relief or allowance in respect
of that payment then Burdale will, once a year during the term of this Agreement
or immediately after the term of this Agreement (if applicable), apply the
total amount of such credits, reliefs or allowances to the reduction of the Company’s
liabilities under the Finance Document in such manner as it thinks fit (provided
that (A) such payment to the Company does not result in any additional liability
for Burdale, (B) the Company has made all the additional payments due from it
under Clause 10.2(b) and (C) the Company has supplied evidence of such payments
to Burdale) and thereafter account to the Company for any balance. Burdale will
use reasonable endeavours to obtain a tax credit as referred to above provided
that it will not be required to seek any such credit if that will result in additional
costs or legal or regulatory burdens on it which are deemed by Burdale, in good
faith, to be material. Burdale shall have an absolute discretion as to whether
to claim any tax credit and if it does claim, the extent, order and manner in
which it does so, Burdale shall not be obliged to disclose any information regarding
its tax affairs or computations to any other party.

 

11.          INCREASED COSTS

 

11.1        Increased Costs

 

If the result of any
change in or introduction of or change in the interpretation or application of
any law, regulation, treaty or official directive or official request (whether
or not having the force of law but, if not, being of a type with which Burdale
is

 

29

 

accustomed
to comply) or compliance by Burdale with the
same including, without limitation, those relating to Taxation (but not Tax on
overall net income of Burdale), or any other form of banking or monetary
controls is to:

 

(a)           increase the cost to Burdale of entering into this Agreement or making
or maintaining the Facility or maintaining any of its commitments under the
Finance Documents;

 

(b)           increase the cost to Burdale of funding or having outstanding any other
amount paid out by it under the Finance Documents;

 

(c)           reduce any amount payable to Burdale under the Finance Documents or the
effective return on its capital; or

 

(d)           result in Burdale making any payment or foregoing any interest or other
return on or calculated by reference to any amount received or receivable by it
from the Company under the Finance Documents.

 

then
and in each such case:

 

(i)            Burdale will notify the Company in writing
and provide to the Company reasonable details of such event promptly upon its
becoming aware of the same; and

 

(ii)           upon demand from time to time by Burdale, the Company will pay to
Burdale such amount as is necessary to compensate Burdale for such increased
cost (or the proportion of such increased cost as is, in the reasonable opinion
of Burdale, attributable to its entering into this Agreement or making or
maintaining the Facility or maintaining any commitment under the Finance
Documents), reduction, payment or foregone interest or other return.

 

11.2        Certificate Conclusive

 

The
certificate of Burdale specifying the amount of compensation payable under
Clause 11.1 will, in the absence of manifest error, be conclusive Burdale will
provide calculations in reasonable detail showing the calculation of any such
amount, provided that Burdale will not be obliged to reveal any information
which is confidential to Burdale.

 

12.          ILLEGALITY AND MONETARY
UNION

 

12.1        Illegality

 

In
the event that any change in or introduction of or change in the interpretation
or application of any law, regulation, treaty, or official directive or
official request (whether or not having the force of law but, if not, being of
a type with which Burdale is accustomed to comply) makes it unlawful (or
contrary to such directive or request) in any jurisdiction applicable to Burdale
for Burdale to make available or maintain the

 

30

 

Facility
or to give effect to its obligations under the Finance Documents, Burdale may
give seven Business Days written notice to that effect to the Company whereupon
the Facility will be cancelled and all the provisions of this Agreement will
apply as if the cancellations or terminations had been a reduction of the
Facility Limit to zero pursuant to Clause 6.5.

 

12.2        Effect of monetary union

 

If
the country of any national currency in which any amount is expressed to be
payable under this Agreement participates in Economic and Monetary Union in
accordance with article 109J of the treaty on European Union, then:

 

(a)           any amount expressed to be payable under this Agreement in that national
currency shall be made in that national currency or in euro as Burdale may, by
not less than three Business Days’ notice to the Company to that effect,
require;

 

(b)           any amount so required to be paid in euro shall be converted from that
national currency at the rate stipulated pursuant to Article 109L(4) of the
Treaty on European Union and payment of the amount in euro derived from such
conversion shall discharge the obligation of the relevant party to pay such
national currency amount in accordance with, and subject to, the Regulation(s)
made pursuant to Article 109L(4);

 

(c)           after consultation with the Company, Burdale shall be entitled to make
such amendments to this Agreement as it may reasonably determine to be
necessary to take account of monetary union and any consequent changes in
market practices (whether as to the settlement or rounding of obligations, the
calculation of interest or otherwise howsoever).

 

Any
amendment so made to this Agreement by Burdale shall be promptly notified to
the Company and shall be binding on the Company.

 

13.          GENERAL REPRESENTATIONS AND WARRANTIES

 

13.1        Acknowledgement and
Warranties

 

The
Company represents and warrants to Burdale that:

 

(a)           Corporate Existence, Power and Authority; Subsidiaries: Each Corporate Obligor and each Related
Company is a corporation duly organised and in good standing under the laws of
its state of incorporation and is duly qualified as a foreign corporation and
in good standing in all jurisdictions where the nature and extent of the
business transacted by it or the ownership of assets makes such qualification
necessary, except for those jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the other Finance Documents and the transactions
contemplated hereunder and thereunder are all within each Corporate Obligor’s
and each Related Company’s corporate powers, have been duly authorised and are
not in contravention of law or the terms of such person’s constituent or other

 

31

 

organisational
documentation or any indenture, agreement or undertaking to which such person
is a party or by which such person or its property are bound. This Agreement
and the other Finance Documents constitute legal, valid and binding obligations
of each Corporate Obligor and each Related Company (as the case may be)
enforceable in accordance with their respective terms. The Company has no
Subsidiaries except the other Corporate Obligors.

 

(b)           Financial Statements; No Material Adverse Change:  All
financial statements relating to any Corporate Obligor which have been or may
hereafter be delivered by such Corporate Obligor to Burdale have been or will
have been prepared in accordance with GAAP and fairly present the financial
condition and the results of operations of such Corporate Obligor as at the
dates and for the periods set forth therein. Except as disclosed in any interim
financial statements furnished by any Corporate Obligor or on behalf of any
Corporate Obligor to Burdale prior to the date of this Agreement, there has
been no material adverse change in the assets, liabilities, properties and
condition, financial or otherwise, of such Corporate Obligor, since the date of
the most recent audited financial statements furnished by such Corporate Obligor
or on behalf of such Corporate Obligor to Burdale prior to the date of this
Agreement.

 

(c)           Priority of Security; Title to Properties:  The
Encumbrances and security interests granted to Burdale under the Finance
Documents constitute valid and perfected first priority mortgages and charges
and security interests in and upon the Collateral subject only to the permitted
pursuant to Clause 14(g). Each Corporate Obligor and each Related Company has
good and marketable title to all of its properties and assets subject to no
mortgages, pledges, security interests, encumbrances or charges of any kind,
except (i) those granted to Burdale (ii) Encumbrances granted by GL Bermuda in
favour of the Company and (iii) such others as are specifically permitted under
Clause 14(g).

 

(d)           Tax Returns:  The Company has filed, or caused to be filed,
in a timely manner all Tax returns, reports and declarations which are required
to be filed by it (without requests for extension except as previously
disclosed in writing to Burdale). All information in such Tax returns, reports
and declarations is complete and accurate in all material respects. The Company
has paid or caused to be paid all Taxes due and payable or claimed due and
payable in any assessment received by it, except Taxes the validity of which
are being contested in good faith by appropriate proceedings diligently pursued
and available to the Company and with respect to which adequate reserves have
been set aside on its books. Adequate provision has been made for the payment
of all accrued and unpaid domestic, foreign and other Taxes whether or not yet
due and payable and whether or not disputed.

 

(e)           Litigation:  Except as set forth on the Information
Certificate of the Company, there is no present investigation by any governmental
agency pending, or to the best of the Company’s knowledge threatened, against
or affecting the Company, its assets or business and there is no action, suit,
proceeding or claim by any person pending, or to the best of the Company’s
knowledge threatened, against the Company or its assets or goodwill, or against
or affecting any transactions contemplated by this Agreement, which has a
material possibility (as reasonably

 

32

 

determined by Burdale) of
being adversely determined against the Company, and if adversely determined
would result in any Material Adverse Effect.

 

(f)            Compliance with Other Agreements and Applicable Laws: No
Corporate Obligor is in default under, or in violation of any of the terms of
any agreement, contract, instrument, lease or other commitment to which it is a
party or by which it or any of its assets are bound and each Corporate Obligor
is in compliance with all applicable provisions of laws, rules, regulations,
licenses, permits, approvals and orders of any English, foreign, or local
governmental authority where such default or noncompliance would result in a
Material Adverse Effect.

 

(g)           Bank Accounts: All of the deposit accounts, investment
accounts or other accounts in the name of or used by the Company maintained at
any bank or other financial institution are set forth on Schedule 9 to the
Debenture, subject to the right of a Company to establish new accounts in
accordance with Clause 14(1) below.

 

(h)           Year 2000 Compliance: Any reprogramming required to permit
the proper functioning, in and following the year 2000, of (i) the computer
systems of the Company and (ii) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the systems
of the Company interface) and the testing of all such systems and equipment, as
so reprogrammed, has been completed in all material respects. The computer and
management information systems of the Company are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Company to conduct its business without a material
adverse effect on its assets, business or condition (financial or other).

 

(i)            Accuracy and Completeness of Information: All information
furnished by or on behalf of any Corporate Obligor in writing to Burdale in
connection with this Agreement or any of the other Finance Documents or any
transaction contemplated hereby or thereby, including, without limitation, all
information on the Information Certificate of such Corporate Obligor is true
and correct in all material respects on the date as of which such information
is dated or certified and does not omit any material fact necessary in order to
make such information not misleading. No event or circumstance has occurred
which has had or could reasonably be expected to have a material adverse affect
on the business, assets or condition (financial or otherwise) of any Corporate
Obligor, which has not been fully and accurately disclosed to Burdale in
writing.

 

13.2        Survival of Warranties; Cumulative

 

All representations and
warranties contained in this Agreement or any of the other Finance Documents
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Burdale on each date a Request is submitted and on
each Utilisation Date and shall be conclusively presumed to have been relied on
by Burdale regardless of any investigation made or information possessed by
Burdale. The representations and warranties set forth herein shall be
cumulative and in addition to any

 

33

 

other
representations or warranties which the Company shall now or hereafter give, or
cause to be given, to Burdale pursuant to any Finance Document.

 

14.          GENERAL UNDERTAKINGS

 

The
Company undertakes to Burdale that:

 

(a)           Maintenance of Existence: The Company shall at all times preserve, renew and keep in full force
and effect its corporate existence and rights and franchises with respect
thereto and maintain in full force and effect all permits, licenses, trademarks,
trade names, approvals, authorisations, leases and contracts necessary to carry
on the business as presently or proposed to, be conducted provided,
however, that the Company may (i) cause any other Corporate Obligor to dissolve
or otherwise surrender any of the foregoing and (ii) abandon any permit,
license, trademark, trade name, approval or authorisation it no longer deems
material to its business. The Company shall give Burdale thirty (30) days’ prior notice of any proposed change of name
or structure, which notice shall set forth the proposed new name or structure
and Company shall deliver to Burdale a copy of the amendment to the applicable
constituent document of the Company providing for such change appropriately
certified as soon as it is available.

 

(b)           Compliance with Laws, Regulations, Etc.: The Company shall, at all times, comply in
all material respects with all laws, rules, regulations, directives, licenses, permits,
consents, authorisations, approvals and orders applicable to it and duly observe
all requirements of any national or local governmental authority, and all statutes
and any guidance, circular or regulations issued thereunder, subordinate legislation,
common law, equity, rules, orders, permits and stipulations relating to environmental
pollution and employee health and safety, where such non-compliance would
result in a Material Adverse Effect.

 

(c)           Payment of Taxes and Claims: The Company shall duly pay and discharge all Taxes, assessments,
contributions and governmental charges upon or against it or its properties or
assets, except for Taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to the Company
and with respect to which adequate reserves have been set aside on its books.
The Company shall be liable for any Tax or penalties imposed on Burdale as a
result of the financing arrangements provided for herein and the Company agrees
to indemnify and hold Burdale harmless with respect to the foregoing, and to
repay to Burdale on demand the amount thereof, and until paid by the Company
such amount shall be added and deemed part of the Outstanding Purchase Amount.
The foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.

 

(d)           Insurance: The
Company shall, at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral against loss or damage and
all other insurance of the kinds and in the amounts customarily insured against
or carried by corporations of established reputation engaged in the same or
similar businesses and similarly situated. The Company shall furnish
certificates, policies or endorsements to Burdale as Burdale shall require as
proof of such insurance,

 

34

 

and, if the Company fails
to do so, Burdale is authorised, but not required, to obtain such insurance at
the expense of the Company. All policies shall provide for at least thirty (30)
days prior written notice to Burdale of any cancellation. The Company shall
cause Burdale to be named as a loss payee and an additional insured (but
without any liability for any premiums) under such insurance policies and the
Company shall obtain non-contributory lender’s loss payable endorsements to all
casualty insurance policies in form and substance satisfactory to Burdale. At
its option, Burdale may apply any insurance proceeds received by Burdale at any
time to the cost of repairs or replacement of Collateral and/or to payment of
the Obligations, whether or not then due, in any order and in such manner as
Burdale may determine or hold such proceeds as cash collateral for the
Obligations.

 

(e)           Financial Statements and
Other Information:

 

(i)            The
Company shall keep proper books and records in which true and complete entries
shall be made of all dealings or transactions of or in relation to the
Collateral and the business of the Company and its Subsidiaries in accordance
with GAAP and the Company shall furnish or cause to be furnished to Burdale:
(1) within thirty (30) days after the end of each fiscal month, monthly
unaudited consolidated and consolidating financial statements of the Company
and its Subsidiaries (including in each case balance sheets, statements of
profit and loss, statements of cash flow and statements of shareholders’
funds), all in reasonable detail, fairly presenting the financial position and
the results of the operations of the Company and its Subsidiaries as of the end
of and through such month, (2) within sixty (60) days after the end of each
fiscal quarter, quarterly unaudited consolidated and consolidating financial
statements of the Company and its Subsidiaries (including in each case balance
sheets, statements of profit and loss, statements of cash flow and statements
of shareholders’ funds, stock figures and valuations for that quarter, a
breakdown of the value and identity of preferential creditors for that quarter
and details of all input and output VAT at the end of each VAT quarter), all in
reasonable detail, fairly presenting the financial position and the results of
the operations of the Company and its Subsidiaries as of the end of and through
such fiscal quarter, and (3) within one hundred twenty (120) days after the end
of each fiscal year, audited consolidated and consolidating financial
statements of the Company and its Subsidiaries (including in each case balance
sheets, statements of profit and loss, statements of cash flow and statements
of shareholders’ funds), and the accompanying notes thereto, all in reasonable
detail, fairly presenting the financial position and the results of the
operations of the Company and its Subsidiaries as of the end of and for such
fiscal year, together with the opinion of the Company’s auditors, which shall
be a nationally recognised independent accounting firm or, if not, another
independent accounting firm selected by the Company and reasonably acceptable
to Burdale, that such financial statements have been prepared in accordance
with GAAP, and present a true and fair view of the results of operations and
financial condition of the Company and its Subsidiaries as of the end of and
for the fiscal year then ended.

 

35

 

(ii)           The
Company shall promptly notify Burdale in writing of the details of (i) any
loss, damage, investigation, action, suit, proceeding or claim relating to the
Collateral or any other property which is security for the Obligations or which
would result in any material adverse change in any Company’s business,
properties, assets, or condition, financial or otherwise and (ii) the
occurrence of any Default.

 

(iii)          The
Company shall promptly after the sending or filing thereof furnish or cause to
be furnished to Burdale copies of all financial reports which GLC sends to its
stockholders generally and copies of all reports and registration statements
which any GLC or any other Borrower (as defined in the Loan Agreement) with the
U.S. Securities and Exchange Commission, any U.S. national securities exchange
or the National Association of Securities Dealers, Inc.

 

(iv)          The
Company shall furnish or cause to be furnished to Burdale such budgets, forecasts,
projections and other information in respect of the Collateral and the business
of the Company, as Burdale may, from time to time, reasonably request. Burdale
is hereby authorised to deliver a copy of any financial statement or any other
information relating to the business of any Obligor and any Related Company to
any court or other government agency or to any participant or assignee or
prospective participant or assignee. The Company hereby irrevocably authorises
and directs all accountants or auditors to deliver to Burdale, at Company’s
expense, copies of the financial statements of any Corporate Obligor or Related
Company and any reports or management letters prepared by such accountants or
auditors on behalf of any Corporate Obligor or Related Company and to disclose
to Burdale such information as they may have regarding the business of any
Corporate Obligor or Related Company. Any information provided to Burdale
pursuant to this Clause 14(e)(iv) shall be subject to the provisions of Clause
24.2. Any documents, schedules, invoices or other papers delivered to Burdale
may be destroyed or otherwise disposed of by Burdale one (1) year after the
same are delivered to Burdale, except as otherwise designated by the Company to
Burdale in writing.

 

(f)            Sale of Assets, Consolidation, Merger, Dissolution,
Etc.: The Company shall not,
directly or indirectly:

 

(i)            merge,
amalgamate or consolidate with any other person or permit any other person to
merge, amalgamate or consolidate with it;

 

(ii)           sell,
assign, lease, transfer, abandon or otherwise dispose of any stock or
indebtedness to any other person or any of its assets to any other person
(except for (1) sales of stock in the ordinary course of business. (2) the
disposition of worn-out or obsolete Equipment or Equipment no longer used in
the business of the Company so long as (A) any proceeds are paid into the
Blocked Accounts and (B) such sales do not involve Equipment having an
aggregate fair market value in excess of the Sterling equivalent of One Million
Dollars ($1,000,000) for all such Equipment disposed of in any fiscal

 

36

 

year of the Company and
(3) in connection with the sale of all or substantially all the assets of the
Company or a Subsidiary of the Company or the sale of all the share capital of the
Company or a Subsidiary of the Company, sales of such assets or share capital
having an aggregate fair market value not to exceed the Sterling equivalent of
Twenty Five Million Dollars ($25,000,000) less the fair market value of any
assets or share capital previously sold by the Company or such Subsidiary in
connection with the sale of all or substantially all the assets of the Company
or such Subsidiary or the sale of all the share capital of such Subsidiary
during the term of this Agreement, provided that
(A) no Default exists or has occurred and is continuing immediately prior to
and after giving effect to such sale and (B) the Company shall pay to Burdale
the greater of (1) fifty percent (50%) of the amount by which the aggregate
amount (net of Taxes, assumed liabilities and transaction costs) received by
the Company from all such sales exceeds the Sterling Equivalent of Five Million
Dollars ($5,000,000) and one-hundred percent (100%) of the amount by which the
aggregate amount (net of Taxes, assumed liabilities and transaction costs)
received by the Company from all such sales exceeds the Sterling Equivalent of
Ten Million Dollars ($10,000,000) or (2) the portion of the amount of then
Outstanding Purchase Price advanced against any Receivables sold in connection
with any such sales (it being agreed that any such payments to Burdale shall
not reduce the Facility Limit unless made pursuant to Clause 6.5 and shall not
be included in calculating the lending limits hereunder);

 

(iii)          form
any Subsidiaries, unless the aggregate amount of all contributions made by the
Company to such Subsidiaries is less than the Sterling equivalent of Three
Million Dollars ($3,000,000) in the aggregate during the term of this Agreement
and provided that (1) no Event of Default
or Default, exists or has occurred and is continuing immediately prior to and
after giving effect to the formation of each such Subsidiary, (2) if any such
Subsidiary is formed on or prior to April 15, 2000, Total Excess Availability
exceeds Fifteen Million Dollars ($15,000,000) immediately prior to and after
giving effect to such formation or if any such Subsidiary is formed after April
15, 2000, Total Excess Availability exceeds Ten Million Dollars ($10,000,000)
immediately prior to and after giving effect to such formation, (3) any such
Subsidiary formed engages in a line of business compatible but not
competitively adverse with the Company’s line of business and (4) the Company
shall not contribute to any such Subsidiary any Collateral with a fair market
value exceeding in the aggregate more than Ten Thousand Dollars ($10,000)
during the term of this Agreement or any proprietary information except that a
license to use such proprietary information on a non-exclusive basis shall not
be deemed to be a contribution of proprietary information for purposes of this
Clause 14(f)(iii);

 

(iv)          acquire
the share capital of any person in which such person would become a Subsidiary
of the Company except for Permitted Acquisitions;

 

37

 

(v)           wind up, liquidate or dissolve except following the transfer of all or
substantially all of its assets in a transaction permitted by Clause 14(f)(iii)(3)
and 14(f)(iii)(4) of this Clause 14(f); or

 

(vi)          agree to do any of the foregoing.

 

(g)           Encumbrances: No
Corporate Obligor shall create, incur, assume or suffer to exist any security
interest, mortgage, pledge, lien, charge or other Encumbrance of any nature
whatsoever on any of its assets or properties, including, without limitation,
the Collateral, except:

 

(i)            the Encumbrances and security interests of
Burdale;

 

(ii)           easements, licenses, covenants and other restrictions affecting the use
of real property which do not interfere in any material respect with the use of
such real property or ordinary conduct of the business of such Obligor as
presently conducted thereon or materially impair the value of the real property
which may be subject thereto;

 

(iii)          purchase money security interests in Equipment (including finance
leases) not so long as such security interests do not apply to any property of
such Obligor other than the Equipment so acquired, and the indebtedness secured
thereby does not exceed the cost of the Equipment so acquired, as the case may
be; and

 

(iv)          the security interests and Encumbrances granted by the Company in favour
of Barclays Bank PLC as at the date of this Agreement or replacements therefor
that do not extend to any other property or increase the amounts secured.

 

(h)           Indebtedness: No
Corporate Obligor shall incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any obligation for borrowed money
or indebtedness, except:

 

(i)            the Obligations;

 

(ii)           trade obligations and normal accruals in the ordinary course of business
not yet due and payable, or with respect to which such Corporate Obligor is
contesting in good faith the amount or validity thereof by appropriate
proceedings diligently pursued and available to such Corporate Obligor, and
with respect to which adequate reserves have been set aside on its books;

 

(iii)          purchase money indebtedness (including finance leases) to the extent not
incurred or secured by Encumbrances (including finance leases) in violation of
any other provision of this Agreement;

 

(iv)          indebtedness set forth on the Information Certificate of such Corporate
Obligor, provided that, (1) such Corporate
Obligor may only make regularly scheduled payments of principal and interest in
respect of such

 

38

 

indebtedness in
accordance with the terms of the agreement or instrument evidencing or giving
rise to such indebtedness as in effect on the date hereof, (2) such Corporate
Obligor shall not, directly or indirectly, (A) amend, modify, alter or change
the terms of such indebtedness or any agreement, document or instrument related
thereto as in effect on the date hereof, or (B) except as otherwise permitted
under this Agreement, redeem, retire, defease, purchase or otherwise acquire
such indebtedness, or set aside or otherwise deposit or invest any sums for
such purpose, and (3) such Corporate Obligor shall furnish to Burdale all
notices or demands in connection with such indebtedness either received by such
Corporate Obligor or on its behalf, promptly after the receipt thereof, or sent
by such Corporate Obligor or on its behalf, concurrently with the sending
thereof, as the case may be;

 

(v)           indebtedness
owing to a Borrower, GL Canada, GLC or GIFL, provided that no Default exists or
has occurred and is continuing immediately prior to and after giving effect to
the incurrence, creation or assumption of such indebtedness; and

 

(vi)          other
indebtedness together with other indebtedness of all other Borrowers not
otherwise permitted under paragraphs (h)(i) to (h)(v) above at any one time not
exceeding the Sterling equivalent of Two Million Dollars ($2,000,000)
outstanding in the aggregate.

 

(i)            Loans, Investments, Guarantees, Etc.: No Corporate Obligor
shall, directly or indirectly, make any loans or advance money or property to
any person, or invest in (by capital contribution, dividend or otherwise) or
purchase or repurchase the stock or indebtedness or all or a substantial part
of the assets or properly of any person, or guarantee, assume, endorse, or
otherwise become responsible for (directly or indirectly) the indebtedness,
performance, obligations or dividends of any person or agree to do any of the
foregoing, except:

 

(i)            the
endorsement of instruments for collection or deposit in the ordinary course of
business;

 

(ii)           investments
in: (1) short-term direct obligations of the United Kingdom and (2) negotiable
certificates of deposit issued by any bank satisfactory to Burdale, payable to
the order of the relevant Corporate Obligor or to bearer and delivered to
Burdale, provided that as to any of the
foregoing, unless waived in writing by Burdale, the relevant Corporate Obligor
shall take such actions as are deemed necessary by Burdale to perfect the
security interest of Burdale in such investments;

 

(iii)          the
guarantees set forth in the Information Certificate of each Corporate Obligor;

 

(iv)          Permitted
Acquisitions and any transaction permitted by Clause 14(a) and 14(f);

 

39

 

(v)           loans
or advances to, or investments in, or purchases or repurchases of the shares,
assets or indebtedness of a Borrower or GL Canada or guarantees or the
assumption of letter of credit obligations for the benefit of a Borrower or GL
Canada; provided that, (1) no Default exists or has occurred and is continuing
immediately prior to and after giving effect to any such loan, advance,
investment, purchase, repurchase, guarantee or assumption of letter of credit
obligation and (2) such loans, advances, investments, purchases or repurchases
do not violate the capitalisation requirements of the relevant Corporate
Obligor under applicable laws;

 

(vi)          loans
or advances to GIFL or GLC; provided that, (i) no Default exists or has
occurred and is continuing immediately prior to and after giving effect to such
loans or advances, (ii) such loans or advances do not violate the
capitalisation requirements of the relevant Corporate Obligor under applicable
laws, and (iii) all the proceeds of such loans or advances are immediately
loaned or advanced by GIFL or GLC, as the case may be, to GL Canada or a
Borrower;

 

(vii)         loans
or advances to the GLC (1) for the purpose of paying interest due under the
Senior Notes, (2) for the purpose of paying management fees to the Sponsors (as
defined in the Loan Agreement) or any of their affiliates in an aggregate
amount not to exceed the Sterling equivalent of Seven Hundred Thousand Dollars
($700,000) less amounts paid by any Borrower or GL Canada for such purpose in
any fiscal year of the Company, or loans or advances to GLC for the purposes
set forth in Schedule 9.10 of the Loan Agreement in an aggregate amount not to
exceed the Sterling equivalent of $23,000,000 less amounts paid by the
Borrowers or GL Canada for such purposes in any fiscal year of the Company provided that, (1) no Default exists or has occurred and is
continuing immediately prior to and after giving effect to such loans,
advances, guarantees or the assumption of letter of credit obligations, (2)
such loans, advances, guarantees or the assumption of letter of credit
obligations do not violate the capitalisation requirements of the relevant
Corporate Obligor under applicable laws;

 

(viii)        loans
or advances to, or guarantees or the assumption of letter of credit obligations
for the benefit of GLC or a Subsidiary of GLC (other than a Borrower, GL
Canada) provided that  (1) no
Default exists or has occurred and is not continuing immediately prior to and
after giving effect to such loans, advances, guarantees, (2) such loans,
advances, guarantees or the assumption of letter of credit obligations do not
violate the capitalisation requirements of the relevant Corporate Obligor under
applicable laws, (3) if such loans, advances, guarantees or assumption of
letter of credit obligations are made on or prior to April 15, 2000, Total
Excess Availability exceeds Fifteen Million Dollars ($15,000,000) immediately
prior to and after giving effect to such loans, advances, guarantees or the
assumption of letter of credit obligations or if such loans, advances,
guarantees or the assumption of letter of credit obligations are made after
April 15, 2000, Total Excess Availability exceeds Ten Million Dollars
($10,000,000) immediately prior to and after giving effect to such loans,
advances, guarantees or the assumption

 

40

 

of
letter of credit obligations and (iv) such loans or advances are evidenced by a
promissory note or notes, the rights to which have been collaterally pledged to
Burdale; and

 

(ix)           other outstanding loans or advances by the Corporate Obligors not to
exceed in aggregate the Sterling equivalent of One Million Dollars ($1,000,000)
at any time.

 

(j)            Dividends and Redemptions: The Company shall not directly or indirectly, declare or pay any dividends
on account of any shares of any class of share capital, as the case may be, of
the Company now or hereafter outstanding, or set aside or otherwise deposit or
invest any sums for such purpose, or redeem, retire, defease, purchase or
otherwise acquire any shares of any class of share capital or, as the case may
be, (or set aside or otherwise deposit or invest any sums for such purpose) for
any consideration other than ordinary share capital or apply or set apart any
sum, or make any other distribution (by reduction of capital or otherwise) in
respect of any such shares, as the case may be, or agree to do any of the
foregoing.

 

(k)           Transactions with Affiliates: No Corporate Obligor shall enter into any transaction for the
purchase, sale or exchange of property or the rendering of any service to or by
any affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of such Corporate Obligor’s business and upon fair and reasonable
terms no less favourable to such Corporate Obligor than such Corporate Obligor
would obtain in a comparable arm’s length transaction with an unaffiliated
person. For this purpose, affiliate shall not include any Borrower, any
Corporate Obligor, GL Canada, GLC, GL Bermuda or GIFL

 

(l)            Additional Bank Accounts: No Corporate Obligor shall, directly or indirectly, open, establish or
maintain any deposit account, investment account or any other account with any
bank or other financial institution, other than the Charged Accounts as set
forth in Schedule 9 to the Debenture, except: (i) as to any new or additional
Blocked Accounts and other such new or additional accounts which contain any
Collateral or proceeds thereof, with the prior written consent of Burdale and
subject to such conditions thereto as Burdale may establish or as required by
this Agreement and (ii) as to any accounts used by such Company to make
payments of payroll, Taxes or other obligations to third parties, after prior
written notice to Burdale.

 

(m)          Further Assurances:
At the request of Burdale at any time and from time to time, the each Corporate
Obligor shall, at its expense, duly execute and deliver, or cause to be duly
executed and delivered, such further agreements, documents and instruments, and
do or cause to be done such further acts as may be necessary or proper to
evidence, perfect, maintain and enforce the security interests and the priority
thereof in the Collateral and to otherwise effectuate the provisions or
purposes of this Agreement or any of the other Finance Documents. Burdale may
at any time and from time to time request a certificate from an officer of any
Corporate Obligor representing on behalf of such Corporate Obligor that all
conditions precedent to the making of a Utilisation and providing of any L/C

 

41

 

contained herein are
satisfied. In the event of such request by Burdale, Burdale may, at its option,
cease to allow any further Utilisation or provide any further L/C’s until
Burdale has received such certificate and, in addition, Burdale has determined
that such conditions are satisfied.

 

15.          EVENTS OF DEFAULT

 

15.1        Default

 

Each of the events
specified below constitutes an Event of Default:

 

(a)           any
Obligor or GLC fails to pay when due any of the Obligations (other than
interest or fees due hereunder);

 

(b)           the
Company fails to pay any interest or fees within three (3) days after such interest
or fees become due hereunder, provided that
such three (3) day period shall not apply in the event that Company
intentionally diverts payments on Receivables or other proceeds of Collateral
from the Blocked Accounts;

 

(c)           any
Obligor or GLC fails to perform any of the terms, covenants, conditions or provisions
contained in this Agreement or any of the other Finance Documents and such
failure shall continue for ten (10) Business Days, provided that,  such
ten (10) Business Day period shall not apply in the case of (1) any failure to
perform a term, covenant, condition or provision which results in the
occurrence of an Event of Default addressed in any other provision or paragraph
of this Clause 15.1, (2) any failure to perform any such term, covenant,
condition or provision that has been the subject of two (2) previous failures
within the prior twelve (12) month period or (3) an intentional breach by any
Obligor or GLC of such term, covenant, condition or provision;

 

(d)           any
representation, warranty or statement of fact made by the Company to Burdale in
this Agreement, the other Finance Documents or any other agreement, schedule, confirmatory
assignment or otherwise shall when made or deemed made be false or misleading
in any material respect;

 

(e)           any
Obligor or any Related Company revokes or terminates any of the terms, covenants,
conditions or provisions of any guarantee, endorsement or other agreement of
such party in favour of Burdale;

 

(f)            any
judgment for the payment of money is rendered against any Obligor in excess of
the Sterling equivalent of Two Million Five Hundred Thousand Dollars ($2,500,000)
in any one case or in excess of the Sterling equivalent of Five Million Dollars
($5,000,000) in the aggregate and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be effectively
stayed, or any material judgment other than for the payment of money, or
injunction, attachment, sequestration, distress, garnishment or execution is rendered
against the Company or any of its assets;

 

(g)           any
Obligor dissolves or suspends or discontinues doing business;

 

42

 

(h)           Any
liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator or the like is appointed in
respect of any Obligor or any material part of its assets.

 

(i)            The
directors of any Corporate Obligor request the appointment of a liquidator,
trustee in bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or the like.

 

(j)            Any
other steps are taken to enforce any Encumbrance over any material part of the
assets of any Obligor.

 

(k)           Any
Obligor is, or is deemed for the purposes of any law to be, unable to pay its
debts as they fall due or to be insolvent, or admits inability to pay its debts
as they fall due.

 

(l)            Any
Obligor suspends making payments on all or any class of its debts or announces
an intention to do so, or a moratorium is declared in respect of any of its
indebtedness.

 

(m)          Any
Obligor, by reason of financial difficulties, begins negotiations with all or
any class of its creditors with a view to the readjustment or rescheduling of
any of its indebtedness.

 

(n)           Any
step (including petition, proposal or convening a meeting) is taken with a view
to a composition, assignment or arrangement with any creditors of any Obligor.

 

(o)           A
meeting of any Corporate Obligor or is convened for the purpose of considering
any resolution for (or to petition for) its winding-up or for its
administration or any such resolution is passed.

 

(p)           Any
person presents a petition for the winding-up or for the administration or for
the bankruptcy of any Obligor unless (other than in the case of a petition for
administration) the relevant Obligor can demonstrate to the satisfaction of
Burdale (acting reasonably) that the relevant petition is frivolous, vexatious
or an abuse of process of the court or that it relates to a claim to which the
relevant Obligor has a good defence which it is diligently pursuing.

 

(q)           An
order for the winding-up or administration or bankruptcy of any Obligor is
made.

 

(r)            Any
other step (including petition, proposal or convening a meeting) is taken with
a view to administration, custodianship, liquidation, winding-up, dissolution
or bankruptcy of any Obligor or any other insolvency or analogous proceedings
involving any such person unless, in the case of a petition (other than in the
case of a petition for administration) the relevant Obligor can demonstrate to
the satisfaction of Burdale (acting reasonably) that the relevant petition is
frivolous, vexatious or an abuse of process of the court or that it relates to
a claim to which the relevant Obligor has a good defence which it is diligently
pursuing.

 

43

 

(s)           There
occurs, in relation to any Obligor, any event anywhere which, in the opinion of
Burdale, appears to correspond with any of those mentioned in paragraphs (h) to
(r) (inclusive) above.

 

(t)            any
default by any Obligor or any Related Company under any agreement, document or
instrument relating to any indebtedness for borrowed money owing to any person
other than Burdale, or any capitalised lease obligations, contingent
indebtedness in connection with any guarantee, letter of credit, indemnity or
similar type of instrument in favour of any person other than Burdale, in any
case in an amount in excess of the Sterling equivalent of Two Million Five
Hundred Thousand Dollars ($2,500,000), which default continues for more than
the applicable cure period, if any, with respect thereto;

 

(u)           GLC
ceases to hold, directly or indirectly, all of the share capital of the
Company;

 

(v)           the
indictment or threatened indictment of any Corporate Obligor or any Related
Company under any criminal statute, or the commencement or threatened
commencement of criminal or civil proceedings against any Corporate Obligor or
any Related Company, pursuant to which statute or proceedings the penalties or
remedies sought or available include forfeiture of any of the material property
of such Corporate Obligor or Related Company (as the case may be);

 

(w)          any
default by any Borrower or GL Canada or an “Event of Default” shall occur under
the terms of the Loan Agreement or the Canadian Loan Agreement or any other
agreement, document, note and/or instrument executed or delivered in connection
therewith;

 

(x)            there
shall be a material adverse change in the business, assets or condition
(financial or otherwise) of any Corporate Obligor or any Related Company after
the date hereof; or

 

(y)           there
shall be an Event of Default under any of the other Finance Documents and/or
Financing Agreements.

 

15.2        Action on Default

 

Upon the occurrence of
any Event of Default and whilst the same is continuing, and without prejudice
to any of Burdale’s rights under this Agreement, Burdale may, by notice to the
Company:

 

(a)           declare
that an Event of Default has occurred; and/or

 

(b)           declare
that the Facility shall be cancelled, whereupon the Facility shall be so cancelled
and all fees (including without limitation pursuant to Clause 6.5(b)) payable
in relation to the Facility shall become immediately due and payable; and/or

 

(c)           declare
that the Company shall forthwith pay or procure the payment to Burdale of a
sufficient sum to cover the amount of all Outstanding Purchase Price and/or

 

44

 

any
contingent obligations of Burdale under any outstanding L/Cs, whereupon the
same shall become immediately due and payable and, once paid, shall be held by
Burdale in an interest bearing account for application against such Outstanding
Purchase Price or contingent obligation (as the case may be), provided that any
sum remaining after settling such payments shall be applied first in settlement
of any other amounts then due and payable to Burdale under the Finance
Documents and, subject to that, any balance shall be promptly repaid to the
Company or other person entitled to the balance.

 

15.3        Appointment of Insolvency Officer

 

If
any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager,
receiver, administrative receiver, administrator or any other insolvency
officer (or its equivalent in any jurisdiction) is appointed in respect of any
Obligor or any Related Company or any part of its assets (whether on the
application or with the consent of Burdale or otherwise) then Burdale may (with
or without it first having exercised any of its other rights under the Finance
Documents), by notice to the Company, declare that the fee specified in Clause
6.5(b) be immediately due and payable or, at Burdale’s option, payable upon
demand as if the Facility Limit at such time had been reduced to zero,
whereupon such fee shall become immediately due and payable or payable on
demand (as the case may be).

 

16.          COSTS, EXPENSES AND FEES

 

16.1        Costs and Expenses

 

The
Company shall pay to Burdale on demand all reasonable costs, expenses, filing
fees and Taxes paid or payable in connection with the preparation, negotiation,
execution, delivery, recording, administration, collection, liquidation,
enforcement and defence of the Obligations, Burdale’s rights in the Collateral,
this Agreement, the other Financing Agreements and all other documents related
hereto or thereto, including any amendments, supplements or consents which may
hereafter be contemplated (whether or not executed) or entered into in respect
hereof and thereof, including, but not limited to:

 

(a)           all costs and expenses of filing, registering or recording (including
filing Taxes and fees, documentary Taxes, intangibles Taxes and mortgage
recording Taxes and presentation fees, if applicable);

 

(b)           all costs and expenses and fees for title insurance and other insurance
premiums, environmental audits, surveys, assessments, engineering reports and
inspections, appraisal fees and search fees;

 

(c)           costs and expenses of remitting loan proceeds, collecting cheques and
other items of payment, and establishing and maintaining the Charged Accounts,
together with Burdale’s customary charges and fees with respect thereto;

 

(d)           charges, fees or expenses charged by any bank or issuer in connection
with the L/C’s;

 

45

 

(e)           costs and expenses of preserving and protecting the Collateral;

 

(f)            costs and expenses paid or incurred in
connection with obtaining payment of the Obligations, enforcing the security
interests and Encumbrances of Burdale, selling or otherwise realising the
Collateral, and otherwise enforcing the provisions of this Agreement and the
other Finance Documents or defending any claims made or threatened against
Burdale arising out of the transactions contemplated hereby and thereby
(including, without limitation, preparations for and consultations concerning
any such matters);

 

(g)           all out-of-pocket expenses and costs incurred by Burdale’s examiners in
the conduct of their periodic field examinations of the Collateral and any
Company’s operations, plus a charge at the rate of the Daily Rate, per day for
Burdale’s examiners in the field and office; and

 

(h)           the fees and disbursements (plus VAT) of legal advisors to Burdale in
connection with any of the foregoing.

 

16.2        Fees

 

(a)           Facility Fee: The
Company will pay to Burdale today a facility fee equal to 0.75% on the amount
of the Facility Limit.

 

(b)           Commitment Fee: The
Company will pay to Burdale a commitment fee computed at the rate of 0.375% per
annum on the daily undrawn/unutilised balance of the Facility Limit. Accrued
Commitment Fee shall be payable monthly in arrears from today’s date and also
on the date on which the Facility is terminated. Commitment fee shall accrue
from day to day and be calculated on the basis of a 365 day year and for the
actual number of days elapsed.

 

(c)           Monitoring fee: The
Company will pay to Burdale a monitoring fee of $2,000 monthly in advance with
the first payment to be made on today’s date.

 

(d)           L/C Fee: The Company
will pay to Burdale a fee equal to 1.25% per annum on the face amount of each
L/C issued at the Company’s request in respect of the period between the date
of issue of the L/C and the End Date of such L/C. The fee shall be calculated
on the basis of a 365 day year and shall be paid monthly in arrears and on the
End Date of such L/C.

 

17.          INDEMNITIES

 

17.1        Currency Indemnity

 

If
any amount payable by the Company under or in connection with any of the
Finance Documents is received by Burdale in a currency other than that agreed
to be payable under the Finance Documents, whether as a result of any judgment
or order or other enforcement, the liquidation or bankruptcy of the Company or
otherwise howsoever and the amount produced by converting the currency so received
into the agreed currency is less than the relevant amount of the agreed
currency, then the Company will indemnify

 

46

 

Burdale
for the deficiency and any loss sustained as a result. Such conversion will be
made at the Exchange Rate, on such date and in such market as is determined by
Burdale as being most favourable for such conversion. The Company will in
addition pay the costs of such conversion.

 

17.2        Other Indemnities

 

The
Company will indemnify Burdale on demand against any loss or liability which
Burdale incurs as a result of:

 

(a)           the occurrence of any Event of Default;

 

(b)           any payment of principal or other amount being received from any source
otherwise than on its due date
under this Agreement;

 

(c)           any Utilisation not being effected after the Company has delivered a
Request in respect of such Utilisation other than as a result of Burdale’s
negligence or default;

 

(d)           any prepayment or provision of cash collateral by the Company not being
made in accordance with the terms of this Agreement.

 

In
each case the Company’s liability includes (without limitation) any loss of
margin or anticipated profits or other loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under any
Finance Document and on account of any security given by Burdale in relation to
those funds and in relation to any amount repaid or prepaid in relation to any
Finance Document.

 

17.3        Stamp duty

 

Immediately
upon demand, the Company shall pay and indemnify Burdale against any liability
it incurs for any stamp, registration or similar tax or duty (and any
applicable penalties) which is or becomes payable because of the entry into,
performance or enforcement of any Finance Document.

 

17.4        General Provisions Regarding
Indemnities

 

Each
of the indemnities contained in Clauses 17.1 to 17.3 inclusive (the “Indemnities”) will remain in full force and effect until
such time as all amounts to which such Indemnities are expressed to relate have
been paid in full. The Indemnities are additional to and not instead of any
security or other guarantee or indemnity at any time existing in favour of any
person.

 

18.          EVIDENCE OF INDEBTEDNESS

 

In
any proceedings relating to any Finance Document a statement as to any amount
due to Burdale under this Agreement which is certified as being correct by an
officer of Burdale will in the absence of manifest error be conclusive evidence
that such amount is in fact due and payable.

 

47

 

19.          NOTICES

 

19.1        Delivery and Receipt

 

All
notices pertaining to this Agreement shall be given in writing or facsimile and
shall be deemed to be given as follows;

 

(a)           if in writing, when delivered; and

 

(b)           if by facsimile, when received,

 

save
that any notice delivered or received on a non-working day or after business
hours shall be deemed to be given on the next working day at the place of
delivery or receipt.

 

19.2        Addresses

 

(a)           The Company’s address and facsimile number for notices are:

 

Royal Court

81 Tweedy Road

Bromley

Kent

BR1 1TW

 

Facsimile no:                         0208 626 6855

For the attention of:             David Lund

 

or
such as the Company may notify to Burdale by not less than 10 days’ notice.

 

(b)           Burdale’s address and facsimile number for notices are:

 

53 Queen Anne Street

London W1M 0HP

 

Facsimile no:                         0171 935 5445

For the attention of:             Company Secretary

 

or
such as Burdale may notify to the Company by not less than 10 days’ notice.

 

20.          WAIVER, REMEDIES CUMULATIVE

 

The
rights of Burdale under the Finance Documents:

 

(a)           may be exercised as often as necessary;

 

(b)           are cumulative and not exclusive of its rights under the general law;
and

 

(c)           may be waived only in writing and specifically.

 

48

 

Delay in exercising or non-exercise of any right shall not be deemed to
be a waiver of that right.

 

21.                             INVALIDITY

 

If any of the provisions of any Finance Document become invalid,
illegal or unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions will not in any way be affected
or impaired.

 

22.                               ASSIGNMENT AND PARTICIPATION

 

22.1                        Assignment

 

The Finance Documents shall be binding upon and inure to the benefit of
and be enforceable by Burdale, the Company and their respective successors and
assigns, except that the Company may not assign its rights under any Finance
Document. Burdale may, after notice to the Company, assign its rights and
delegate any or all of its obligations under the Finance Documents.

 

22.2                        Transfer by Burdale

 

Burdale may at any time assign, transfer or offer participations in all
or a proportion of all its rights and obligations under the Finance Documents
to any other bank or financial institution.

 

23.                               GOVERNING LAW AND JURISDICTION

 

23.1                        Governing Law

 

This Agreement will be governed by and construed in accordance with
English law.

 

23.2                        Jurisdiction

 

For the benefit of Burdale, the Company irrevocably agrees that the
courts of England will have non-exclusive jurisdiction to settle any disputes
which may arise out of or in connection with this Agreement and that
accordingly any suit, action or proceeding arising out of or in connection with
this Agreement may be brought in such courts.

 

23.3                        Process Agent

 

For the benefit of Burdale, the Company irrevocably accepts its
appointment as GLC’s agent for the service
of process pursuant to the GLC Guarantee.

 

49

 

24.                               DISCLOSURE OF INFORMATION

 

24.1                        Publicity

 

Burdale may advertise or publicise in such publications and to such
persons as Burdale may in its discretion think fit such particulars of this
transaction as Burdale may in its absolute discretion deem appropriate.

 

24.2                        Confidential Information

 

Burdale agrees to hold, in accordance with its customary procedures for
handling confidential information and safe and sound lending practices, any
confidential information that it may receive from any Obligor or Related
Company pursuant to this Agreement in confidence, except for disclosure:

 

(a)          to legal counsel, accountants, auditors and other professional advisors
to any Obligor or any Related Company or Burdale;

 

(b)         to regulatory officials having jurisdiction over Burdale;

 

(c)          as required by applicable law or legal process (provided that in the event
Burdale is so required to disclose any such confidential information, that
Burdale shall endeavour promptly to notify the Obligor or Related Company (as
the case may be), so that the Obligor or Related Company (as the case may be)
may seek a protective order or other appropriate remedy) or in connection with
any legal proceeding to which Burdale or such Obligor or Related Company (as
the case may be) are adverse parties;

 

(d)         to another financial institution or its counsel in connection with an
assignment or disposition or proposed assignment or disposition to that
financial institution of all or part of Burdale’s interests hereunder or a
participation interest herein, provided that such disclosure is made subject to
an appropriate confidentiality agreement on terms substantially similar to this
Clause; and

 

(e)          to prospective purchasers of any Collateral (other than competitors of
any Obligor or Related Company or their Subsidiaries unless all Obligations are
then due and payable) in connection with any disposition thereof, provided that
such disclosure is made subject to an appropriate confidentiality agreement on
terms substantially similar to this Clause.

 

For purposes of the foregoing, “confidential information” shall mean
all information respecting any Obligor or any Related Company, other than (a)
information previously filed with any governmental agency and available to the
public, (b) information previously published in any public medium from a source
other than, directly or indirectly, Burdale, and (c) information previously
disclosed by GLC or any of its Subsidiaries to any person not associated with
GLC without a written confidentiality agreement.

 

Nothing in this Clause 24 shall be construed to create or give rise to
any fiduciary duty on the part of Burdale to any Obligor or any Related Company
or their Subsidiaries.

 

50

 

25.                               COUNTERPARTS

 

This Agreement may be executed in any number of counterparts and all of
such counterparts taken together will be deemed to constitute one and the same
instrument.

 

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

 

51

 

SIGNATORIES

 

	
  The
  Company:

  
	
   

  
	
  GEOLOGISTICS
  LIMITED

  
	
   

  
	
  By:

  	
  /s/ George Papageorghiou

  	
   

  
	
   

  
	
  Burdale:

  
	
   

  
	
  BURDALE
  FINANCIAL LIMITED

  
	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
						

 

62Exhibit 4.22

 

	
   

  	
  

  

 

28 March 2001

 

BY FACSIMILE AND POST

 

GeoLogistics Limited

Royal Court

81 Tweedy Road

Bromley

Kent BR1 1TW

 

Facsimile
no.      020 8626
6855

 

Dear Sirs

 

We refer to:

 

(A)          the facility agreement dated 31 March 2000 between
GeoLogistics Limited (the “Company”) and
ourselves (as supplemented and amended from time to  time, the “Facility Agreement”);

 

(B)           the Guarantee and Indemnity dated 31 March 2000 between
GeoLogistics Corporation (the “Guarantor”), a Delaware
corporation, and ourselves (the “Guarantee”);
and

 

(C)           the third amendment to loan and security agreement (the “US Amendment Agreement”) executed or to be executed between
Congress as Lender and Bekins Worldwide Solutions, Inc and others as Borrowers
(amongst other things) making certain amendments to the Loan Agreement.

 

Save as otherwise defined
in this letter, terms defined in the Facility Agreement have the same meaning
when used in this letter.

 

We write to confirm the
agreement reached between us that, subject to the terms of this letter, on and
from the Effective Date (as defined below) the following shall be deemed not to
be Events of Default under the Facility Agreement:

 

(a)                                  the failure to establish financial covenants by 31 December 2000,
as required under Section 9.17 of the Loan Agreement; and

 

(b)                                 the failure of the Guarantor to maintain Adjusted Net Worth
(as defined in the Loan Agreement) in the amounts set forth in Section 10.1(n)
of the Loan Agreement for the period from 31 December 2000 to 30 April 2001.

 

The Effective Date shall
be the date which is the later of (i) the date on which we have received a copy
of this letter countersigned on behalf of the Company and the Guarantor and
(ii) the date on which the Amendment (as defined in the US Amendment Agreement)
becomes effective in accordance with Section 3 of the US Amendment
Agreement.

 

	
   

  	
  53 Queen Anne Street, London WIC 9HP

  
	
   

  	
  t. 020 7935 1115 f. 020 7486 3513 w. www.burdale.co.uk

  
	
   

  	
  Offices also in Manchester and Birmingham

  
	
   

  	
  Reg. No.2656007 Incorporated in England and Wales

  
	
   

  	
   

  
	
   

  	
  affiliated to CONGRESS
  FINANCIAL CORPORATION, A FIRST UNION company

  

 

 

In
consideration of our issuing this letter at your request, the Company shall pay
to us a fee of US$32,000 which is immediately due and payable and, to the
extent not already paid, shall be debited by Burdale to the Company’s loan
account (as described in Clause 4.6 of the Facility Agreement) on the date on
which we receive a copy of this letter countersigned by the Company in the Sterling
equivalent of such amount calculated at the Exchange Rate on such date.

 

Save
as set out above, nothing in this letter shall be deemed to be an amendment to
the terms of any Finance Document or a waiver or consent by Burdale to any
breach or potential breach (present or future) of any provision of the Finance
Documents or any waiver of a Default or Event of Default (howsoever described).

 

This
letter is a Finance Document and shall be governed by English law.

 

	
  Yours
  faithfully

  
	
   

  
	
  /s/ [ILLEGIBLE]

  	
   

  
	
  For and on behalf of

  
	
  BURDALE FINANCIAL LIMITED

  

 

 

	
  Accepted and agreed:

  
	
   

  
	
  GEOLOGISTICS LIMITED

  
	
   

  
	
  By:

  	
  /s/ George
  Papageorghiou

  	
   

  

 

We hereby agree (with
such agreement taking effect as a deed) that the guarantee and indemnity given
by us remain in full force and effect and extend to guarantee the obligations
of the Company to you under the Finance Documents notwithstanding the waiver
contained in this letter.

 

	
  Executed as a deed by

  
	
  GEOLOGISTICS CORPORATION

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

2

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